By Kaiya Lyons
Earlier today the U.S. Senate Committee on Health, Education, Labor & Pensions held a hearing on the reauthorization of the Higher Education Act, which may put the beloved Public Service Loan Forgiveness program at risk of termination.
Although several proposals currently exist to reauthorize the Higher Ed Act, one Republican plan is particularly shocking, as it would completely overhaul existing law. Successfully passed by House education committee in December 2017, the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act promises to replace the current student aid scheme in favor of a streamlined approach to repayment that will likely force many law school graduates to continue paying their student loans well into old age.
This proposal paints a grim picture of the future of the public interest legal community, which has heavily relied on the Public Service Loan Forgiveness program (PLSF) to make it possible for young lawyers to start, and stay, in careers that benefit the public and help our democracy run efficiently. If enacted, this bill would not only radically change the way higher education graduates repay their federal student loans, but also drastically alter the career options available to those graduates, effectively dismantling the public sector as a consequence.
The PSLF program was signed into law by President Bush in 2007 with glowing bipartisan support to ease the burden of student loan debt for public sector employees and incentivize more people to enter these vital careers. For lawyers, this program means that if you work in “public service” (which is broadly defined as non-profit or city, state, or federal government employment) for 10 years while making on-time payments toward your direct federal student loans under an income-driven repayment program, the government will forgive your remaining loan balance.
PSLF has become very popular across fields, with over half a million borrowers reportedly enrolled in the program. As its supporters have argued, it is a lifeline for public interest attorneys and the communities they serve. Georgetown Law professor Philip Schrag has praised the program, explaining that “by incentivizing people to stay for 10 years,” PSLF “enables the government agencies and nonprofit organizations to hire people who will stay beyond the two years it takes to train them to do a good job.”
Likewise, according to Amanda Furst, Director of Public Interest Programs at the University of Minnesota Law School, students see the PSLF program as “a necessary component for pursuing and maintaining a career in the public interest” due to the “salary differences in the public versus private sector.” Furst, who also serves as the Public Service Section Chair at the National Association for Law Placement (NALP), has had first-hand experience working with students and alumni who entered public service due to the promise of loan forgiveness and says the program has been “instrumental in opening pathways for law students to spend their careers in public service.”
Still, not all members of the legal community are in favor of the PSLF program. Some critics, including Above the Law correspondent Shannon Achimalbe, point to a “very small but growing minority” of lawyers “who were never interested in public service but planned to use PSLF as a student loan bailout” as evidence that the program is a backdoor subsidy for people who have the means to pay their own way. Moreover, Jason Diesle argued in a 2014 Brookings Institution report that because the government already forgives graduate student loans after 25 years of income-based repayments, the PSLF program is “redundant at best and excessively generous at worst.”
These criticisms are flawed in three essential ways. First, “backdoor subsidy” arguments fail to account for the fact that most public interest lawyers will not earn an income to match their six-figure debt during the first ten years of their career. Second, they neglect to assign any intrinsic value to the very purpose of the program—incentivizing young professionals to dedicate their skills and energy to public service positions. These essential jobs include providing competent counsel to defendants, defending the rights of marginalized communities against discrimination in our country’s courts and legislatures and protecting our environment—tasks that benefit society and help the government to serve the public interest. Even though income-based repayment schemes alone may make it possible for graduates to pay off their loans while earning a modest public interest income, without the PSLF there is no incentive for borrowers to actively choose these jobs over more lucrative career moves.
Third, by according too much significance to a “small minority” of PSLF enrollees who may immediately enter the corporate sector after receiving forgiveness, critics overlook the much greater risk of a depletion in the public sector workforce overall. For instance, NPR staff reporter Bobby Allyn has warned that the likelihood that a sizeable portion of PSLF enrollees will defect to BigLaw after ten years is not only a “legitimate worry,” but also may have “negative consequences for citizens who benefit most from the work of the public servants.” However, this argument ignores the much larger population of future public interest-minded law students who will not be able to enter the public sector without the help of PSLF. Furthermore, it minimizes the contribution of those borrowers whose decades of public service are per se valuable to their individual clients, the issue areas and communities in which they worked, and (necessarily) the federal government.
Currently, all graduate students have the option to cap their monthly student loan payments at 10 percent of their discretionary income, the remaining balance of which would be forgiven after 25 years. For students going into public interest work, the PSLF program shortens that timeframe by 15 years. However, the current version of the PROSPER Act goes radically exchanges the existing system for a “regressive and punitive” scheme of student loan repayment. Slashing the available repayment plans from eight to two, the Act would offer only two options to borrowers: either pay down the loans according to a standard 10-year plan or through monthly payments capped at 15% of the borrower’s income. Furthermore, the Act would eliminate all currently available forgiveness schemes and only allow for forgiveness after borrowers “repay the total principal and interest they would have paid under a standard 10-year plan.”
Luckily, most recent grads worried about the demise of the PSLF can breathe a momentary sigh of relief, as the proposed changes to repayment would begin to take effect with the 2018-2019 award year and it does not appear that they would apply retroactively. But although this would save those of us who are currently repaying our student loans, the certain, disastrous impact the PROSPER Act would have on the future of the public interest community will affect us all. Therefore, we must work vigilantly to protect alternative ways to support law students and recent graduates and make it possible for them to enter public service as soon as possible, and without sacrificing their financial livelihood.
This includes contacting your Congressmembers to ardently voice your support for the continuation of the PSLF in the reauthorization of the Higher Education Act. But it also includes acting to protect graduates’ interests externally, providing opportunities and systems to allow graduates to access the public sector even where those graduates have mammoth student loan debt to repay.
Last June, at the annual National Convention of the progressive non-profit organization the American Consitution Society (ACS), in Washington, D.C., last June, Kellog Hansen Todd Figel & Frederick PLLC Partner David C. Frederick had a simple solution—“make law school less expensive.” During the convention’s panel on “Progressive Federalism,” Frederick acknowledged that massive student loan debt is the “number one impediment to law students going out and doing public service jobs.” Frederick explained that, instead of starting in public service, “law students are often forced into corporate law firms” for years to pay off their loans, a practice he characterized as a type of “indentured servitude.” While this image sparked laughter and jokes from the other panelists, Frederick maintained the veracity of his comparison and went on to stress that legal education must be more affordable in order for young lawyers to pursue public interest.
However, much to our collective disappointment, law school tuition hikes show no signs of ceasing, nor does a decrease in tuition rates seem likely. Therefore, law students and recent grads have two options: (1) take the tried-and-true path of their predecessors and enter the corporate sector for a few years with the hope that they will be able to move into the public sector later, or (2) take advantage of the government’s Public Service Loan Forgiveness program and be able to work in public interest law immediately after graduation and have their debt erased after ten years.
But David Frederick’s call for lower law school tuition highlighted an important theme in the movement of progressive federalism that has emerged since the 2016 election and could help to fill in the gaps left by an unfriendly or unwilling federal government. But how can state and local government entities and non-profits (1) entice such lawyers to join their ranks and (2) find the money to hire them?
A potential solution to this problem, she explained, is establishing and contributing to private funds which allow recent graduates to begin providing direct services to vulnerable communities at government entities or non-profits straight out of law school. For young lawyers interested in non-profit, direct-services work, examples of these private funds include the highly competitive Skadden or Soros Justice Fellowships. Alternatively, those interested in working in the areas of economic justice, racial and gender justice, or environmental justice may apply for Jill Habig’s Public Rights Project, which mirrors the law firm associate deferral programs of the late aughts and aims to partner with law schools, law firms and non-profits to provide young lawyers with a stipend to work with progressive state attorneys general, district attorneys and city attorneys.
As states across the country have proven, however, there are other ways to provide financial support for young public interest lawyers besides a small amount of highly competitive, privately funded fellowships. Over 100 law schools across the country have taken steps to help low-income public servants pay off their loans through Loan Repayment Assistant Programs (LRAPs). These LRAPs, which may be administered by schools, state bar foundations, or federal and state governments, award financial aid to law school graduates working in low-paying public sector jobs. These programs offer recent graduates the chance to work at the organization of their choice.
Given this unique moment in our history, these alternative paths to debt relief are especially important. Now, more than ever, we need eager, determined and passionate young lawyers to begin contributing to the great work being done to defend our civil rights and constitutionally protected freedoms as soon as possible. Recruiting the next generation of public interest lawyers will require a concerted effort by the legal community to combat astronomical rates of law student loan debt by protecting the PSLF program, lobbying for lower law school tuition, sponsoring fellowships for recent graduates and dedicating resources to creating new jobs for young lawyers in the public sector.
There is no reason to believe that any single solution will fix the current scheme of rising debt and lack of public interest employment for recent grads. Instead, advocates must use their resources to combat the status quo holistically and recognize that the Public Service Loan Forgiveness program is one vital component, among many, in the effort to maintaining and expanding the strength and size of public interest legal community. We need the combined support of law schools, private benefactors, public interest employers and legislatures to make it possible for the future graduates to embark on a career in public service without sacrificing financial stability.
For more information on how to certify your public service and stay on track for forgiveness, see the CFPB’s recent guides to understanding the PSLF.
Portions of this article were originally published in the ACSBlog in July 2017.