loan repayment assistance programs and the college cost reduction and access act

Loan Repayment Assistance Programs and the

College Cost Reduction and Access Act

June 2009

Rise in Median Private Law School Tuition

1987 - 2007

Source: American Bar Association

Rise in Median Public Non-Resident Tuition

1987 - 2007

Source: American Bar Association

Rise in Median Public Resident Tuition

1987 - 2007

Source: American Bar Association

Average Amount Borrowed

Academic Year Public Private2006-2007 $57,170 $87,9062005-2006 $54,509 $83,1812004-2005 $51,056 $78,7632003-2004 $48,910 $76,5632002-2003 $45,763 $72,8932001-2002 $46,499 $70,147

Source: American Bar Association

2008 National Median Starting Salaries

Law Firm 51-100 $103,500

Law Firm 26-50 $87,100

Law Firm 2-25 $77,500

State AG’s Office $50,000

Public Defender $47,435

Local Prosecutors $45,675

Civil Legal Services $40,000

Sources: NALP 2008 Public Sector & Public Interest Attorney Salary Report and NALP 2008 Associate Salary Survey

Commercial and Alternative Student Loans Should be Avoided

Design Matters

Not all LRAPs are created equal

Questions to Ask About Any LRAP

• Is there an income cap and what is it?

• How is “income” calculated?

• Are assets considered?

Questions to Ask About Any LRAP

• What employment qualifies?

• Must I have a law license?

• Must I be practicing law?

Questions to Ask About Any LRAP

• Which student loans are eligible?

• Is there a minimum debt requirement?

• How is the LRAP funded?

Questions to Ask About Any LRAP

• Is there a limit on how long I can participate?

• Is there a cap on total assistance?

• How are other LRAP benefits considered?

Questions to Ask About Any LRAP

• How much assistance does the program provide?

• Loan or a grant?

• What service obligation to I have and for how long?

State-Based LRAPs

• Is there a program where I want to practice?

• What employment is covered?

• Must I live in the state?

• Are graduates of state law schools given preference?

Employer LRAPs

Nearly always taxable as income

College Cost Reduction and Access Act

Eligible Debt: $115,000Starting Salary: $50,000

Monthly Payment Year 1: $430Monthly Payment Year 10: $635Total Paid: $63,220

Total Forgiven: $129,980

Higher Education andCollege Opportunity Act (HEOA)