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The Federal Income-Contingent Repayment Option for Law Student Loans

By Philip G. Schrag


Many idealistic law school graduates feel precluded from taking legal aid and other low-paying public service jobs because they have incurred high educational debt, often exceeding $100,000. In 1993, however, Congress created an \u22income-contingent\u22 debt repayment option that was intended to enable high-debt, low-income graduates, including lawyers, to afford accepting public service positions. This program caps loan repayments at a reasonable percentage of the graduates\u27 incomes, and it forgives any remaining balance at the end of twenty-five years. To date, this program has failed to meet the needs of public interest lawyers. It is rarely used. Law students are largely unaware of it. Those who do know about the program, including law school financial aid advisors and the minority of law students who have heard of the plan, are suspicious of it. The main problem is that the twenty-five year repayment term is too long a period to be considered seriously by people just starting their careers, even though the plan also offers subsidies. This Article argues that the Secretary of Education should use existing statutory authority to shorten the term to a more realistic fifteen years, at a relatively low cost. It also argues for other reforms, including better marketing of this program by the United States Department of Education (\u22Department\u22)

Topics: students loan funds, law – study and teaching, federal aid to higher education, Legal Education
Publisher: Scholarship @ GEORGETOWN LAW
Year: 2001
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