Newspaper article THE JOURNAL RECORD

New Federal Student Loan Act Lessens Burden on New Lawyers

Newspaper article THE JOURNAL RECORD

New Federal Student Loan Act Lessens Burden on New Lawyers

Article excerpt

Many students leave college bearing not just a degree, but a load of debt. This is especially true of those graduating from professional schools, such as newly minted attorneys.

American Bar Association figures show that the median public law- school loan burden for 2006 graduates was $54,500, about $83,000 for graduates from private law schools.

A new federal law signed late last month by President Bush is aimed at easing some of that often-crushing burden on new grads.

"It is huge," said Gina Rowsam, assistant dean of the Professional and Career Development Center at the Oklahoma City University School of Law.

In the College Cost Reduction and Access Act of 2007, Congress reduced monthly payments for low-income borrowers with high loan debt in a new income-based repayment program.

Most government-backed loans are eligible, including Stafford and Grad PLUS loans.

Rowsam said it is important for students to understand that the law does not affect loans from private lenders.

Another provision accelerates loan forgiveness for graduates who enter and remain in public service jobs for at least 10 years.

The law also tightens up on requirements for lenders.

"They've just taken out some of the profits that the lenders have been enjoying, and redirecting it," said Rowsam.

Parts of the new law took effect Oct. 1, while others are not effective until July 1, 2009.

One of the latter allows borrowers to limit their annual student loan repayments to 15 percent of discretionary income, which is defined at adjusted gross income less 150 percent of poverty level income for a particular borrower's family size. Borrowers return to a standard repayment schedule when their income exceeds that benchmark.

Student borrowers do not have to go into public service or consolidate their loans to utilize the income-based provisions.

In an article for the Hofstra Law Review, Georgetown University Professor Philip Schrag says the law will help law students and attorneys, as well as those in other fields, who want to work in usually less well-paying public service jobs.

Rowsam said that previously the only legal jobs deemed public service were generally prosecutorial positions. …

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