By Jim Covington

Director of Legislative Affairs

Loan-forgiveness relief for public-sector lawyers was recently enacted as P.L. 110-315. This law does the following. (Our thanks to the American Bar Association’s Government Affairs Office for this summary.)

The John R. Justice Prosecutors and Defenders Incentive Act (Section 951) provides student-loan relief to full-time state and local prosecutors and public defenders, their juvenile delinquency counterparts, and those who provide education and training. The program provides up to $10,000 per year in exchange for a one-time, renewable three-year commitment for a maximum of $60,000. Priority will be given to those with fewer than three years or fewer of service and those least able to repay. The Department of Justice will promulgate rules to ensure parity between prosecutors and public defenders and among the state and local jurisdictions. The program will be authorized for six years at $25 million and such sums are necessary to carry out the program. Senator Richard J. Durbin (D-IL) played a major role in making this legislation happen.

The Legal Assistance Loan Repayment Program (Section 431) provides civil legal assistance lawyers, including those who work with people with disabilities, loan repayment of up to $6,000 per year, in exchange for a renewable three-year commitment, to a maximum of $40,000. The program is authorized indefinitely at $10 million per year. It prohibits a recipient from benefiting from this program and related ones.

428K Loan Forgiveness for Service in Jobs of National Need (Section 430) creates a list of “Public Sector Employees” considered being of “national need.” It includes “public interest legal services (including prosecution, public defense, or legal advocacy in low-income communities at a nonprofit organization).” This program would provide no more than $2,000 per year, and for no more than five years and $10,000. It will be administered by the Department of Education. It prohibits a recipient from benefiting from this program and related ones.

Perkins Loan Cancellation for Public Service (Section 465) cancels a percentage of a borrower’s outstanding Perkins’s loan debt for performing certain kinds of public-service jobs. Language was added extending this program’s reach to “a full-time attorney employed in a defender organization established with section 3006A(g)(2) of Title 18,” such as federal public defender and community defender. The program cancels 15% for the first or second year; 20% for the third or fourth year, and 30% for the fifth, or 100% forgiveness for five years’ service. In addition, Congress also increased the loan limits under the Perkins’s program for graduate and professional students to $8,000 per year to a maximum of $60,000.

Thurgood Marshall Legal Educational Opportunity Program is not a loan-forgiveness program but does help promising but poorer students pursue an education in the law and provide services to their communities. CLEO provides practical and financial assistances, including course-selection and guidance, testing preparation, and other forms of coaching and mentoring throughout a student’s journey, including need-based stipends of up to $10,000. The program will be able to reach students as early as middle school and high school, provide law graduates assistance for bar-exam preparation, and work with state-based and state bar association programs with a similar mission.

Last year’s legislation. The Department of Education has finished the public comment period on proposed regulations for a public-service loan-forgiveness program approved last year as P.L. 110-84, the College Cost Reduction Act. That program would forgive the balance of qualifying student loans of lawyers working in public service in the government, military, or a 501(c)(3) organization following 120 monthly payments on a reduced repayment schedule. Final regulations are expected from the Department by November of 2008.