On August 25, 2009, Governor Quinn signed the Public Interest Attorney Assistance Act which provides loan repayment assistance to “public interest attorneys.” See Public Act 96-615, effective January 1, 2010. The Act allows for loan assistance of a maximum of $6,000 per year, up to a career maximum of $30,000 in qualified loan forgiveness.
Public interest attorneys covered by the Act include full-time assistant State’s Attorneys, assistant Public Defenders, civil legal aid attorneys, assistant Attorneys General, assistant public guardians, Guardianship and Advocacy Commission attorneys, and legislative attorneys.
A benefit of the Act is that it defines eligible debt as including loans obtained from “commercial lending institutions or educational institutions.” Most student loan repayment legislation has been confined to only government held loans. The Act does not apply to loans made by a private individual or family member, however.
The Act designates the Illinois Student Assistance Commission (ISAC) as the agency to administer the loan repayment program. ISAC is directed to create an advisory committee including representatives from the public interest legal sector, bar associations, and a public law school. ISAC will establish an application process, eligibility requirements, and prioritization criteria. In determining who will be eligible to benefit from the loan forgiveness program, ISAC will consider: the timeliness of the application, the applicant’s salary level, the amount of eligible debt, the availability of other loan repayment assistance, length of service as a public interest attorney, and prior participation in the program.
Loan repayment assistance will be in the form of a forgivable loan. Implementation of the loan repayment program is contingent upon the availability of appropriations and, as of yet, no money has been dedicated to the program. However, the outlook for funding in the Spring of 2010 is generally positive. The ISAC Web site is at: <http://www.collegezone.com/>.
There are other forms of student loan forgiveness currently available to attorneys working in public interest.
The Public Service Loan Forgiveness Program is already operating and does not require application to initiate eligibility. Under the program, a borrower may qualify for forgiveness of the remaining balance due on any eligible federal student loans after making 120 monthly payments. Only payments on debts made after October 1, 2007, will be considered in calculating the 120 payments, and only payments made pursuant to certain repayment plans are eligible. The program also requires full-time employment in a “public service job” while those payments are being made. Consequently, the earliest cancellation of loan balances will not be until October of 2017. To retrieve your loan information and determine if you have an eligible loan go to the National Student Loan Data System at <http://nslds.ed.gov> or call the Direct Loan Servicing Center at 1-888-447-4460.
Additionally, many law schools currently offer school-specific loan repayment assistance programs to graduates who choose careers in public interest. Each school’s criterion for eligibility is different, however, so interested attorneys should contact their law school financial aid department for information.
Some federal agencies also provide loan repayment assistance programs. Equal Justice Works maintains a list of participating agencies at their Web site <http://www.equaljusticeworks.org/>.
Also, additional federal student loan forgiveness may be forthcoming in the form of the Higher Education Reauthorization and College Opportunity Act. The Act includes four loan forgiveness programs applying to public interest lawyers including: state and local prosecutors and public defenders, federal public defenders, civil legal assistance lawyers and attorneys working with the disabled, and public interest attorneys working as broadly defined “public sector employees.” However, although the program has been authorized and partially funded, it is still awaiting regulation and implementation.
Finally, on July 1, 2009, the new income-based repayment plan became available for the first time to borrowers of federal loans including both Direct Loans and federal loans from a private lender. The plan caps a borrower’s monthly payments based on his or her income and family size and any debt and interest remaining after 25 years of payments will be forgiven. Also in July, Pell grant amounts were increased and the interest rates on new subsidized Stafford loans and existing variable-rate loans went down. Contact your lender to see if you are eligible to change your repayment plan.
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