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PENNSYLVANIA BAR ASSOCIATON

This report discusses the alarming rise of student loan debt and its impact on law school graduates seeking public service employment. It provides recommendations for loan forgiveness and repayment assistance programs.

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PENNSYLVANIA BAR ASSOCIATON

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  1. PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

  2. PBA Task Force on Student Loan Forgiveness and Repayment • Samuel Tyrone Cooper, III, Co-Chair • Maureen P. Kelly, Co-Chair • Louis S. Rulli, Co-Chair

  3. Alfred J. Azen Joseph A. Campagna Catherine C. Carr James W. Creenan Pamela G. Day David Jackson DeVries Sheila E. Dow-Ford Hon. Stewart Greenleaf Hon. Kathy Manderino Samuel W. Milkes Laval S. Miller Wilson Elizabeth C. Price Robert V. Racunas Dveera Segal Susan Sherman Sandra Brydon Smith Thomas M. Thompson James A. Wells Andrew J. Gonzalez Angel Revelant PBA Task Force on Student Loan Forgiveness and Repayment Membership

  4. INTRODUCTION • One of the most difficult challenges to the profession is the alarming rise of student loan debt and its adverse impact upon the ability of law school graduates to engage in public service employment. • The New York Times reports that high law school tuition debts and low pay are draining public interest law.

  5. BACKGROUND In 1990, PBA House of Delegates approved the recommendation of the first Task Force on Legal Services to the Needy to endorse the enactment of an educational loan repayment assistance program that would encourage public service legal employment by partially underwriting a portion of monthly educational loan obligations.

  6. BACKGROUND • In the last 15 years, the problem of student loan debt has substantially worsened. • In 2001, then ABA President Robert E. Hirshon announced that staggering student loan debt faced by young lawyers would be one of the ABA’s top priorities. • In 2003, under the leadership of PBA Presidents Tim Carson and Tom Golden, the PBA created the current Task Force on Student Loan Forgiveness and Repayment Assistance.

  7. ABA Commission on Loan Repayment Study • In 2001, the average American law school graduate owed $80,000 in student loans. • Survey of 1,622 graduating law students revealed 94% financed law school and 50% owed more than $75,000.

  8. ABA Commission on Loan RepaymentFinal Report Conclusions • Law school tuitions have skyrocketed • Vast majority of law students finance their legal education • Law students are borrowing increasing larger sums • Public service salaries have not kept pace with rising student debt burdens or private sector salaries

  9. Final Report Conclusions (Continued) • Many law school graduates who take public service legal jobs must leave after 2-3 years due to financial strains • Legal profession pays a severe price when law students opt out of pursuing a public interest career • Loan repayment assistance programs help law school graduates take and remain in public service legal jobs • The number of LRAPs is limited.

  10. Pennsylvania’s Experience The PBA Task Force made a concerted effort to study the impact of this crisis upon Pennsylvania by: • Surveying law students, legal aid attorneys, and young lawyers • Collecting data from career planning and placement offices at Pennsylvania law schools • Reviewed information from local bar associations and foundations • Assembled profiles of many public service lawyers and law students directly affected by the problem.

  11. Pennsylvania Survey Results • Not surprisingly, the Task Force determined that national findings on the problem of law school debt applied with equal force to Pennsylvania • The problem continues to worsen

  12. Pennsylvania Survey Results • Law school debt presents a major hurdle for both the Pennsylvania Legal Aid Network and law school graduates considering a career in civil legal aid

  13. Pennsylvania Survey ResultsFindings Regarding Legal Aid Attorneys • Initial survey of 232 full-time legal aid attorneys, garnered 123 responses • Nearly 58% of respondents had law school debt • Debt obligations ranged from $10,000 to over $130,000

  14. Pennsylvania Survey Results • The average student loan debt obligation of Pennsylvania’s legal aid attorneys is $68,740; Pennsylvania’s average starting salary for a legal aid attorney is $30,985 • 68% of legal aid attorneys with less than 5 years of legal work experience have educational debt

  15. Pennsylvania Survey ResultsLaw Student Findings • 661 current law students at Pennsylvania’s law schools responded to the survey • 459 or 69.4% responded that they plan to practice law in Pennsylvania • 94.7% (624 out of 661) of the survey respondents indicated they will leave law school with educational debt

  16. Pennsylvania Survey ResultsLaw Student Findings • Current law students report an average educational debt burden of $98,324 • Amounts of individual debt burdens range from $10,000 to $225,000 • 77.9% of students report that the amount of debt burden will dictate career options

  17. Key Survey Findings • The vast majority of law students borrow to finance their legal education. 96.8% of Pennsylvania law students surveyed indicated that they borrowed to finance their legal education. • Law students are borrowing increasingly larger sums to finance their legal education. The Pennsylvania Bar Association’s original Task Force on Legal Services to the Needy reported in 1990 that “the typical education debt carried by a new attorney contemplating a public service position now exceeds $30,000.” The average debt burden of current law students in 2006 is $98,324, with a range of total student debt from $10,000 to $225,000.

  18. Key Survey Findings • High student debt bars many law school graduates from pursuing public interest careers. A majority of law school students (77.9%) and a strong showing by attorneys new to the profession indicate that law school debt burdens have already impacted, or will impact career options. • Some law school graduates who take public service legal jobs must leave after they gain two to three years of experience. The Task Force believes that the public interest suffers when some civil legal aid attorneys with large debt burdens report that long-term employment with legal aid is not an option due to increasing family responsibilities, expiring loan deferments, etc.

  19. Recommendations of the Task Force on Student Loan and Repayment Assistance

  20. The Task Force Recommends that the Pennsylvania Bar Association: • Endorse the establishment of a statewide Loan Repayment Assistance Program (LRAP) designed to enable law graduates to enter into and remain in public service

  21. The Task Force Recommends that the Pennsylvania Bar Association: • Endorse and advocate for the enactment of state legislation authorizing the Pennsylvania Higher Assistance Agency (PHEAA) to administer a statewide loan repayment assistance program for law graduates engaged in a qualifying public service employment project

  22. The Task Force Recommends that the Pennsylvania Bar Association: • Approve and advocate for a comprehensive statewide loan repayment assistance program that is carefully structured to respond effectively to the needs of law graduates entering into or remaining in qualifying public service employment in Pennsylvania

  23. The Task Force Recommends that the Pennsylvania Bar Association: • Approve and advocate for a strong public-private partnership that will provide adequate, reliable, and recurring funding for a statewide loan repayment assistance program to assist law graduates employed in qualifying public service employment in Pennsylvania

  24. The Task Force Recommends that the Pennsylvania Bar Association: • Strongly encourage each Pennsylvania law school to establish and maintain an effective and well-funded loan repayment assistance program, independent of this statewide program, that is designed to make public service legal employment financially feasible to its graduates, regardless of the state in which such graduates choose to pursue public service employment

  25. The Task Force Recommends that the Pennsylvania Bar Association: • Provide technical assistance and financial information to law schools, prospective and current law students, and law graduates by, among other things, serving as a depository for information related to financial planning, counseling, public interest fellowships, LRAPs, and other resources that are available to help students and law graduates enter into and remain in public service employment

  26. The Task Force Recommends that the Pennsylvania Bar Association: • Support federal legislation and efforts that advance the goals and recommendations of the Task Force

  27. Conclusion • As a matter of access to justice, the PBA should take a leadership role in advocating for a strong, effective, and well funded statewide loan repayment assistance program

  28. Thank You for your thoughtful consideration of these recommendations!

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