Paying your law school debt with a public sector job

Listen to this article

Since the economic crash of 2008, an increasing number of young lawyers are entering jobs in the public sector as private firms have reduced their hiring. The trend itself is not an unfavorable one:  More young lawyers are devoting their skills and talents to serving the public interest, while gaining valuable legal experience.

However, the rising cost of law school and, consequently, the amount of student loans facing lawyers upon graduation complicates this otherwise encouraging picture.

Starting salaries in government and nonprofit jobs have failed to keep pace with the rise in law school debt, meaning the need for financial assistance has increased for young lawyers who take jobs in the public sector. Law schools and federal and state governments have acted to ameliorate this challenge. They have enacted various Loan Repayment Assistance Programs.

The problem with LRAPs, however, is that many of them are subject to state and federal budget cuts and these programs are the first to go during these years of fiscal austerity.

Perhaps the signature piece of legislation providing federal loan repayment assistance to lawyers is the College Cost Reduction and Access Act, which in 2007 created the Public Service Loan Forgiveness Program. There are two important benefits of this program:

Loan Forgiveness: First, under the PSLF, lawyers who work for any local, state or federal government agency or a 501(c)(3) organization are eligible to have their remaining federally guaranteed or federally extended loans forgiven after ten years.

Income-Based Repayment: During your ten years of service in the public sector, you are allowed to make monthly student loan payments at a rate that is based on your income, which typically amounts to about 10 percent of one’s adjusted gross income (and even less for individuals with families).

PSLF provides young lawyers the opportunity for careers in the public sector while still meeting their financial obligations and maintaining a decent standard of living. What’s more, PSLF is an entitlement program, which means that once you have established your eligibility, you have a right (enforceable in court) to benefit from the program.

Finally, law schools and the government agencies and organizations whose employees are eligible for this program should educate their students and employees about PSLF and similar programs. As the legal market continues to recover from the recession, more people have become jaded about the value of a legal education and career. Quality students and talented lawyers need to know that there are prospects for having a financially rewarding career beyond a private law firm, six-figure starting salary, which, these days, are reserved for only a fraction of young lawyers.