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

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

PENNSYLVANIA BAR PENNSYLVANIA BAR ASSOCIATONASSOCIATON

TASK FORCE ON STUDENT TASK FORCE ON STUDENT LOAN FORGIVENESS AND LOAN FORGIVENESS AND REPAYMENT ASSISTANCEREPAYMENT ASSISTANCE

REPORT AND RECOMMENDATIONSREPORT AND RECOMMENDATIONS

Page 2: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

PBA Task Force on Student Loan PBA Task Force on Student Loan Forgiveness and RepaymentForgiveness and Repayment

Samuel Tyrone Cooper, III, Samuel Tyrone Cooper, III, Co-ChairCo-Chair Maureen P. Kelly, Maureen P. Kelly, Co-ChairCo-Chair Louis S. Rulli, Louis S. Rulli, Co-Chair Co-Chair

Page 3: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

PBA Task Force on Student Loan PBA Task Force on Student Loan Forgiveness and Repayment MembershipForgiveness and Repayment Membership

Alfred J. AzenAlfred J. Azen Joseph A. CampagnaJoseph A. Campagna Catherine C. CarrCatherine C. Carr James W. CreenanJames W. Creenan Pamela G. DayPamela G. Day David Jackson DeVriesDavid Jackson DeVries Sheila E. Dow-FordSheila E. Dow-Ford Hon. Stewart GreenleafHon. Stewart Greenleaf Hon. Kathy ManderinoHon. Kathy Manderino Samuel W. MilkesSamuel W. Milkes

Laval S. Miller WilsonLaval S. Miller Wilson Elizabeth C. PriceElizabeth C. Price Robert V. RacunasRobert V. Racunas Dveera SegalDveera Segal Susan ShermanSusan Sherman Sandra Brydon SmithSandra Brydon Smith Thomas M. ThompsonThomas M. Thompson James A. WellsJames A. Wells Andrew J. GonzalezAndrew J. Gonzalez Angel RevelantAngel Revelant

Page 4: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

INTRODUCTIONINTRODUCTION

One of the most difficult challenges One of the most difficult challenges to the profession is the alarming rise to the profession is the alarming rise of student loan debt and its adverse of student loan debt and its adverse impact upon the ability of law school impact upon the ability of law school graduates to engage in public service graduates to engage in public service employment.employment.

The New York Times reports that The New York Times reports that high law school tuition debts and low high law school tuition debts and low pay are draining public interest law.pay are draining public interest law.

Page 5: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

BACKGROUNDBACKGROUND

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

Page 6: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

BACKGROUND BACKGROUND

In the last 15 years, the problem of student In the last 15 years, the problem of student loan debt has substantially worsened.loan debt has substantially worsened.

In 2001, then ABA President Robert E. In 2001, then ABA President Robert E. Hirshon announced that staggering student Hirshon announced that staggering student loan debt faced by young lawyers would be loan debt faced by young lawyers would be one of the ABA’s top priorities.one of the ABA’s top priorities.

In 2003, under the leadership of PBA In 2003, under the leadership of PBA Presidents Tim Carson and Tom Golden, Presidents Tim Carson and Tom Golden, the PBA created the current Task Force on the PBA created the current Task Force on Student Loan Forgiveness and Repayment Student Loan Forgiveness and Repayment Assistance.Assistance.

Page 7: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

ABA Commission on Loan ABA Commission on Loan Repayment Study Repayment Study

In 2001, the average In 2001, the average American law school American law school graduate owed graduate owed $80,000 in student $80,000 in student loans.loans.

Survey of 1,622 Survey of 1,622 graduating law graduating law students revealed students revealed 94% financed law 94% financed law school and 50% school and 50% owed more than owed more than $75,000.$75,000.

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Salary & Debt Comparison

Public Interest

Private Practice

2001 ABA Law School Debt Survey

6%

44%50%

No Debt

Under $75,000

Over $75,000

Page 8: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

ABA Commission on Loan RepaymentABA Commission on Loan Repayment Final Report ConclusionsFinal Report Conclusions

Law school tuitions have skyrocketedLaw school tuitions have skyrocketed Vast majority of law students finance Vast majority of law students finance

their legal educationtheir legal education Law students are borrowing Law students are borrowing

increasing larger sumsincreasing larger sums Public service salaries have not kept Public service salaries have not kept

pace with rising student debt pace with rising student debt burdens or private sector salariesburdens or private sector salaries

Page 9: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Final Report Conclusions Final Report Conclusions (Continued)(Continued)

Many law school graduates who take Many law school graduates who take public service legal jobs must leave after public service legal jobs must leave after 2-3 years due to financial strains2-3 years due to financial strains

Legal profession pays a severe price when Legal profession pays a severe price when law students opt out of pursuing a public law students opt out of pursuing a public interest careerinterest career

Loan repayment assistance programs help Loan repayment assistance programs help law school graduates take and remain in law school graduates take and remain in public service legal jobspublic service legal jobs

The number of LRAPs is limited.The number of LRAPs is limited.

Page 10: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania’s ExperiencePennsylvania’s Experience

Surveying law students, legal aid attorneys, and Surveying law students, legal aid attorneys, and young lawyersyoung lawyers

Collecting data from career planning and Collecting data from career planning and placement offices at Pennsylvania law schoolsplacement offices at Pennsylvania law schools

Reviewed information from local bar associations Reviewed information from local bar associations and foundationsand foundations

Assembled profiles of many public service lawyers Assembled profiles of many public service lawyers and law students directly affected by the problem.and law students directly affected by the problem.

The PBA Task Force made a concerted The PBA Task Force made a concerted effort to study the impact of this crisis effort to study the impact of this crisis upon Pennsylvania by:upon Pennsylvania by:

Page 11: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania Survey ResultsPennsylvania Survey Results

Not surprisingly, the Task Force Not surprisingly, the Task Force determined that national findings on determined that national findings on the problem of law school debt the problem of law school debt applied with equal force to applied with equal force to PennsylvaniaPennsylvania

The problem continues to worsenThe problem continues to worsen

Page 12: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania Survey ResultsPennsylvania Survey Results

Law school debt Law school debt presents a major presents a major hurdle for both the hurdle for both the Pennsylvania Legal Pennsylvania Legal Aid Network and Aid Network and law school law school graduates graduates considering a considering a career in civil legal career in civil legal aidaid

Page 13: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania Survey ResultsPennsylvania Survey ResultsFindings Regarding Legal Aid AttorneysFindings Regarding Legal Aid Attorneys

Initial survey of 232 Initial survey of 232 full-time legal aid full-time legal aid attorneys, garnered attorneys, garnered 123 responses123 responses

Nearly 58% of Nearly 58% of respondents had respondents had law school debtlaw school debt

Debt obligations Debt obligations ranged from ranged from $10,000 to over $10,000 to over $130,000$130,000

Initial Overview of Legal Aid Attorney Debt Obligations

2% 7%9%

7%

7%

6%7%4%4%3%

44%

Under$10,000 $10,000 -$25,000 $25,001 -$40,000 $40,001 -$55,000 $55,001 -$70,000 $70,001 -$85,000 $85,001 -$100,000 $100,001 -$115,000 $115,001 -$130.000 over $130,000

No Debt orDebt Retired

Page 14: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania Survey ResultsPennsylvania Survey Results

The average student loan debt obligation of Pennsylvania’s The average student loan debt obligation of Pennsylvania’s legal aid attorneys is $68,740; Pennsylvania’s average legal aid attorneys is $68,740; Pennsylvania’s average starting salary for a legal aid attorney is $30,985starting salary for a legal aid attorney is $30,985

68% of legal aid attorneys with less than 5 years of legal 68% of legal aid attorneys with less than 5 years of legal work experience have educational debtwork experience have educational debt

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Legal AidAttorney

(PA)

PublicInterest

(National)

PrivatePracticeAttorney

Salary & Debt Comparison including PA Legal Aid

Average Starting Salary

Average Amount of LawSchool Debt

Page 15: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania Survey ResultsPennsylvania Survey ResultsLaw Student FindingsLaw Student Findings

661 current law students 661 current law students at Pennsylvania’s law at Pennsylvania’s law schools responded to the schools responded to the surveysurvey

459 or 69.4% responded 459 or 69.4% responded that they plan to practice that they plan to practice law in Pennsylvanialaw in Pennsylvania

94.7% (624 out of 661) 94.7% (624 out of 661) of the survey of the survey respondents indicated respondents indicated they will leave law school they will leave law school with educational debtwith educational debt

Students with Law School Debt

94%

6%

Law School Debt

No Debt

Page 16: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Pennsylvania Survey ResultsPennsylvania Survey ResultsLaw Student FindingsLaw Student Findings

Current law students report an Current law students report an average educational debt burden of average educational debt burden of $98,324$98,324

Amounts of individual debt burdens Amounts of individual debt burdens range from $10,000 to $225,000range from $10,000 to $225,000

77.9% of students report that the 77.9% of students report that the amount of debt burden will dictate amount of debt burden will dictate career optionscareer options

Page 17: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Key Survey FindingsKey Survey Findings The vast majority of law students borrow to The vast majority of law students borrow to

finance their legal education. 96.8% of finance their legal education. 96.8% of Pennsylvania law students surveyed indicated that Pennsylvania law students surveyed indicated that they borrowed to finance their legal education.they borrowed to finance their legal education.

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

Page 18: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Key Survey FindingsKey Survey Findings High student debt bars many law school graduates High student debt bars many law school graduates

from pursuing public interest careers. A majority of from pursuing public interest careers. A majority of law school students (77.9%) and a strong showing law school students (77.9%) and a strong showing by attorneys new to the profession indicate that law by attorneys new to the profession indicate that law school debt burdens have already impacted, or will school debt burdens have already impacted, or will impact career options. impact career options.

Some law school graduates who take public service Some law school graduates who take public service legal jobs must leave after they gain two to three legal jobs must leave after they gain two to three years of experience. The Task Force believes that years of experience. The Task Force believes that the public interest suffers when some civil legal aid the public interest suffers when some civil legal aid attorneys with large debt burdens report that long-attorneys with large debt burdens report that long-term employment with legal aid is not an option due term employment with legal aid is not an option due to increasing family responsibilities, expiring loan to increasing family responsibilities, expiring loan deferments, etc.deferments, etc.

Page 19: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

RecommendationsRecommendationsof theof the

Task Force on Student Loan Task Force on Student Loan

and and

Repayment AssistanceRepayment Assistance

Page 20: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

I.I. Endorse the establishment of a Endorse the establishment of a statewide Loan Repayment statewide Loan Repayment Assistance Program (LRAP) Assistance Program (LRAP) designed to enable law graduates designed to enable law graduates to enter into and remain in public to enter into and remain in public serviceservice

Page 21: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

II.II. Endorse and advocate for the enactment Endorse and advocate for the enactment of state legislation authorizing the of state legislation authorizing the Pennsylvania Higher Assistance Agency Pennsylvania Higher Assistance Agency (PHEAA) to administer a statewide loan (PHEAA) to administer a statewide loan repayment assistance program for law repayment assistance program for law graduates engaged in a qualifying public graduates engaged in a qualifying public service employment projectservice employment project

Page 22: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

III.III. Approve and advocate for a Approve and advocate for a comprehensive statewide loan comprehensive statewide loan repayment assistance program that is repayment assistance program that is carefully structured to respond effectively carefully structured to respond effectively to the needs of law graduates entering to the needs of law graduates entering into or remaining in qualifying public into or remaining in qualifying public service employment in Pennsylvania service employment in Pennsylvania

Page 23: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

IV.IV. Approve and advocate for a strong Approve and advocate for a strong public-private partnership that will public-private partnership that will provide adequate, reliable, and recurring provide adequate, reliable, and recurring funding for a statewide loan repayment funding for a statewide loan repayment assistance program to assist law assistance program to assist law graduates employed in qualifying public graduates employed in qualifying public service employment in Pennsylvania service employment in Pennsylvania

Page 24: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

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

Page 25: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

VI.VI. Provide technical assistance and financial Provide technical assistance and financial information to law schools, prospective and information to law schools, prospective and current law students, and law graduates by, current law students, and law graduates by, among other things, serving as a depository among other things, serving as a depository for information related to financial planning, for information related to financial planning, counseling, public interest fellowships, LRAPs, counseling, public interest fellowships, LRAPs, and other resources that are available to help and other resources that are available to help students and law graduates enter into and students and law graduates enter into and remain in public service employment remain in public service employment

Page 26: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

The Task Force Recommends that The Task Force Recommends that the Pennsylvania Bar Association:the Pennsylvania Bar Association:

VII.VII. Support federal legislation and Support federal legislation and efforts that advance the goals and efforts that advance the goals and recommendations of the Task recommendations of the Task Force Force

Page 27: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

ConclusionConclusion

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

Page 28: PENNSYLVANIA BAR ASSOCIATON TASK FORCE ON STUDENT LOAN FORGIVENESS AND REPAYMENT ASSISTANCE REPORT AND RECOMMENDATIONS

Thank You Thank You for your thoughtful for your thoughtful

consideration consideration of these of these

recommendationsrecommendations!!