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American Bar Association Law Student Division Loan Repayment Assistance Program (LRAP) Education & Advocacy. Definition of LRAP . LRAP stands for Loan Repayment Assistance Program
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American Bar Association Law Student DivisionLoan Repayment Assistance Program (LRAP) Education & Advocacy
Definition of LRAP • LRAP stands for Loan Repayment Assistance Program • LRAPs provide financial aide to law school graduates in public sector jobs by offering loan forgiveness or funds to pay off debt • A variety of LRAP’s exist to meet all needs
The Structure of LRAPs • Programs tend to give loans to the recipient with the program forgiving this loan after recipient satisfies specific work requirements. • Participants in LRAPs usually must be employed in a public sector job or by a nonprofit organization • Upon completion of a specified period of employment the program will forgive part or all of the students loans
The Structure of LRAPs (Cont.) • Student loans cancelled in exchange for public sector work does not cause the borrower to have taxable income so long as certain provisions are met: • Must be employed in a public sector job or by a nonprofit organization • Must be a forgivable loan not a grant • Must contain a provision that all or part of the debt is cancelled when the employment is complete
Why Do We Need LRAPs? • Due to Rising Tuition Costs 86.4% of Law Students borrowed money for tuition. • A significant number of students Graduate owing $80,000 or more. • Law School Debt prevented 66% of students from seeking public sector jobs
Where Can We Start An LRAP Program • At Your Law School • With Your Local Bar Association • On the Local Level (City, Towns) • On the State Level (Does Your State Have One?) • On The Federal Level (The ABA Lobbies Every Year On Capital Hill)
Why do we need different types of LRAP programs? • Law School – produce more students in the public sector from your law school • State – create incentives to keep students in the state post graduation • National – broader acceptance and encourage states to implement their own legislation
In 1988, the ABA adopted a policy statement encouraging law schools, state, territorial and local bar associations and federal and state lawmakers to establish LRAPs In 2001, the ABA Board of Governors created the Commission on Loan Repayment and Forgiveness Since 2001 the Commission has been guiding LRAP efforts on state and national level. LRAP is a major Legislative Initiative and a Priority of the ABA and the ABA Law Student Division. What Has The ABA Been Doing
82 law schools currently have an LRAP program 31 schools have public interest scholarship programs Does Your School Have an LRAP Program?
Why Schools Need to Adopt LRAP Programs? • LRAPs help public service employers attract and retain gifted and committed young lawyers, which in turn benefits the communities in which they live. • LRAPs facilitate the ability of students with law school loan debt to accept lower-paying public interest and public sector jobs following graduation. • In most cases, this aide is given to graduates working in the public interest sector, government, or other lower-paying legal fields in the form of a forgivable loan to help them repay their annual educational debt
How Can You Create or Improve Your School’s LRAP • Check with your Financial Aide office to see if an LRAP already exists. • If a program exists, find out how many students annually take advantage of it. • Compare your school with other schools in your market. • If a program doesn’t exist, research programs available at other schools and have your SBA push to have an LRAP enacted.
What is a State LRAP? • What is right for each state is not right for every state • Variety of factors to consider: unique to each state (i.e. some states the legislature may oppose the idea whereas the State Bar Association is supportive) • Problems • Hostile state environments toward lawyers • Unfunded mandates- No financial support even though a policy is in place. • In some states additional appropriation bills may be necessary to create a program with adequate funds to distribute.
States with LRAPs • Light grey = LRAPs that are working and in existence today • Dark grey = states that enacted legislation but did not have appropriate funds
What Do State Programs Look Like • State programs often narrow the types of employment eligible for LRAP. • In addition, there are other eligibility requirements such as which types of loans will be covered: law school, federal, private, bar, and undergraduate. • Most programs have income caps averaging around $40-50k a year. • The following chart illustrates what current state LRAP programs cover.
ABA Day • April 18-19th in Washington, DC • Issue Briefings and Meetings with Members of Congress • Last year we held meetings with 25 members of Congress and their staff
How Can the Federal Government Curb Rising Law Student Debt? • Loan forgiveness for those working in the public interest • Higher subsidized Stafford loans • Lower federal interest rates • Earmarked repayment funds for those choosing to work in the federal government
Loan Forgiveness in the 109th Congress • Amendments to the Higher Education Act • Income Contingent Repayment Options were introduced in the House and Senate, but failed to garner sufficient support • H.R. 609 aimed to qualify public interest lawyers for $5,000 in student loan relief after 5 years of service (Passed in House) • Federal PLUS Loans • Effective July 1, 2006 Congress created a low interest rate, unsubsidized loan for graduate and professional students • S.2039- Prosecutor and Defender Incentive Act of 2005 • Currently awaiting hearing, this bill would provide loan forgiveness for those committing to 3 years of service • Similar legislation was introduced in the House (HR.198)
Law Student Division Goals for this Year • Educate law students on federal loan issues • Empower student leaders to pressure their representatives to address the issue of student debt • Energize our grassroots to have a presence in local Congressional offices and in Washington, DC on ABA Day
How You Can Help • Hold Circuit and SBA Forums on LRAP and student debt issues • Be a local resource to inform your peers on the issue • Write an op-ed in school and local papers on rising student debt • Organize a letter writing campaign from your school • Set up an early Spring meeting with your member of Congress • Come to ABA Day for a follow-up meeting in Washington, DC
Resources You Can Use To Get You On Your Way • Use the ABA Loan Forgiveness Website - www.abanet.org/legalservices/lrap/ • The Division Delegates Legislative Website – www.abanet.org/lsd/legislation/ • Use the State LRAP Toolkit on the Delegates Webpage • Reach out to your State Bar • Talk to your Dean and Faculty • Contact the Division Delegates • Contact your Circuit Governor