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President Donald Trump’s proposed budget would slash domestic spending across the board. One item on the chopping block is a popular initiative offering student loan forgiveness in exchange for public service work.
Eliminating or reducing the Public Service Loan Forgiveness Program could have a drastic effect on the ability to hire and train newly minted attorneys with heavy education debt to work as prosecutors or public defenders, attorneys in both fields told Bloomberg BNA.
Turnover and staff quality problems could be exacerbated if the program is eliminated or severely cut back, and rural areas could be hit hardest. It’s not uncommon for young lawyers in the public sector to work more than one job. And big cuts also could disproportionately affect attorneys from low-income backgrounds, these attorneys and experts said in a series of interviews.
“If you have a quarter-of-a-million dollars in student loan debt, you can’t become a prosecutor,” said David LaBahn, president and CEO of the Association of Prosecuting Attorneys. “If you’re making $40,000 a year, you can’t make your student loan payment if you also need” to pay for a car.
Trump’s budget blueprint for the fiscal year beginning Oct. 1 is far from reality. Congress has reacted skeptically to heavy domestic cuts to pay for substantial increases in military spending, and lawmakers ultimately will have the final say on budget priorities.
Still, the president’s dramatic spending plan has shaken the capital and threatened a number of programs like the loan forgiveness effort and another law-based initiative, the Legal Services Corporation, which helps poor people afford defense counsel.
Politicians from both major political parties, including Trump, have voiced concerns about mounting student debt and the ability of borrowers to repay their loans and meaningfully contribute to the economy.
Student loan debt totaled more than $1.3 trillion at the end of 2016 with more than 11 percent of aggregate obligations more than three months delinquent or in default, the Federal Reserve Bank of New York said in a report.
Trump would ax the public loan service initiative in favor of a plan for all undergraduates to have their loans forgiven in 15 years—a policy that would not impact law school debt.
“To support this streamlined pathway to debt relief for undergraduate borrowers, and to generate savings that help put the nation on a more sustainable fiscal path, the budget eliminates the Public Service Loan Forgiveness program, establishes reforms to guarantee that all borrowers in” income-driven repayment “pay an equitable share of their income, and eliminates subsidized loans,” the budget plan to Congress released May 23 said.
“These reforms will reduce inefficiencies in the student loan program and focus assistance on needy undergraduate student borrowers instead of high-income, high-balance graduate borrowers,” it said.
All student loan proposals apply to debt originated on or after July 1, 2018, except those for borrowers to finish their current study, the White House said.
Bloomberg BNA’s requests for comment to the White House and the Office of Management and Budget were not returned. The Education Department said it would not comment for this story.
The Education Department program forgives the debt of those working in public service after they’ve made 120 monthly payments. Qualifying public service employment includes federal, state, or local government work—like a prosecutor’s office—as well as certain non-profits, or a group like AmeriCorps or the Peace Corps. Only debt incurred under the federal direct student loan program is eligible.
But the actual benefit of the program is not yet known. It was created in 2007, so the first instances of loan forgiveness would not be seen until this coming October, according to the program’s website. There have been a number of questions raised by a leading government watchdog, members of Congress and others about the true impact of the program on taxpayers.
Despite uncertainty around the numbers, the legal community has embraced public service loan forgiveness. Attorneys told Bloomberg BNA that cutting the program could worsen high rates of turnover and limit public service opportunities in the criminal justice system to only those who can afford low starting salaries and slower pay increases.
Several public defenders’ offices have been hit with lawsuits from the American Civil Liberties Union (ACLU) about caseloads for attorneys in short-staffed offices.
Under-funding and under-staffing is likely to worsen without the public service forgiveness effort, Rick Jones, executive director and a founding member of the Neighborhood Defender Service of Harlem and president-elect of the National Association of Criminal Defense Lawyers, told Bloomberg BNA May 24.
“It exacerbates a problem, but it creates a new problem for those folks who are going to be graduating from law schools with significant debt,” Jones said. “There are no doubt people who went to law school with the thinking that even though they were accumulating debt, there would be some forgiveness that would allow them to pursue their stated goals of public interest and doing public defense work.”
Law school debt can be staggering, ranging from more than $160,000 at top private universities to more than $50,000 at some of the larger state universities, according to data published by U.S. News and World Report for 2016.
Without forgiveness, graduates emerging with high debt loads will have a tough time justifying a public service position, Jones said.
And that’s not just a problem for public defenders, but prosecutors, too.
The best applicants for entry-level prosecutors and public defenders are also courted by large law firms that can offer them six-figure salaries to start. Without government loan forgiveness, the pool of applicants will likely be reduced to more privileged graduates with no student debt but less practical experience, said Jones.
While cuts to the public service loan program will probably cause problems in recruitment and retention of public defenders nationally, certain areas will be hit harder, Jones said. Naturally, cities where more people want to live will have a wider pool of applicants than rural offices, he said.
It’s already difficult to recruit public defenders to rural areas on a low-income salary, which has resulted in the large caseloads and understaffed offices, Jones said. Add on top of that funding cuts that make law school loans harder to repay, and it increases pressure on defenders in rural locales.
Rural areas “will not be able meet what is already an unmet need,” Jones said. “They’re going to have more work to do, they’re having less time or quality time to spend with clients—it all sort of snowballs the existing problems.”
Ultimately, he added, the people who suffer the most from that imbalance are indigent defendants, who can’t afford an attorney in the first place.
Ernie Lewis, executive director of the National Association for Public Defense, agreed.
Lewis ran the Kentucky public defender program from 1996-08 and said routinely losing public defenders to better-paying, private-sector jobs leads to younger, more inexperienced attorneys representing clients in harder cases.
When he left as head of Kentucky’s public defender program, Lewis said each public defender in the state was receiving 490 new cases a year.
He said he tried for three years to get a state-level loan assistance program for public defenders, but it never passed.
“We need a federal government that grants loan assistance to public defenders and prosecutors so we can attract them and retain them,” Lewis said.
Despite funding disparities, the Association of Prosecuting Attorney’s LaBahn said most entry-level prosecutor salaries are almost as low as public defenders. In urban areas, he estimated starting salaries around $40,000 to $50,000.
Eliminating the public service program would force out graduates from lower-income backgrounds, who LaBahn said usually make the best prosecutors.
“If you have someone who responds to coaching and someone who has gotten their hands dirty and had people yell at them, they are so much of a better prosecutor than someone who graduated from an Ivy League school,” he said.
Philadelphia Deputy District Attorney John Delaney said the public service loan program gives district attorneys an edge in recruiting diverse talent.
Delaney leads the trial division—the largest department in the office—and said the federal forgiveness program has been an effective recruiting tool that many of his attorneys end up using.
“For a number of people, loan forgiveness is the difference maker” in taking a prosecutor job, he said.
As it stands, Delaney said many of his attorneys work side jobs to afford their student loans while working as prosecutors while already taking advantage of the public service loan program. Without it, those attorneys would need to leave.
Some Philadelphia prosecutors moonlight as yoga instructors, bartenders, and UPS employees, Delaney said. That work ethic shows their dedication to working in public interest and understanding that they must make sacrifices to work in their chosen field, he added.
Public defenders often work two jobs as well, Lewis said. When he managed a small public defender office in Richmond, Ky., he said he regularly had attorneys who lived with their parents or worked side jobs to make ends meet.
One of his lawyers worked as a pizza delivery driver after work and ended up delivering a pizza to his client one night.
“People come to public service expecting to make sacrifices,” Delaney said. “They don’t expect to make what their classmates in private practice make, but they do expect to live.”
One big side effect of reducing or eliminating the public service program that a number of states attorneys and public defenders worry about is retention. It is one of—if not the biggest—incentive for quality prosecutors and public defenders to stay in their public service jobs, everyone interviewed for this story said.
Delaney said a tight budget prevents him from offering younger prosecutors raises. His office employs 300 attorneys, but faces 10 percent attrition every year. That means Delaney is in a constant cycle of training prosecutors, only to lose them in a few years to lucrative private firms when they can’t afford to work in public service anymore.
“By far, the No. 1 reason people leave is money,” he said.
To combat the low salary and slow pay increases, Delaney said he depends on PSLF as a selling point that could relieve prosecutors saddled with student loan debt who commit to 10 years in his office.
Retention is also a problem for public defenders, Lewis said. During his time at the helm in Kentucky, he analyzed numbers and saw that people overwhelmingly left at two distinct points: two to three years in and between seven and nine years.
He said the latter point is more worrisome because that’s when public defenders are debating whether to make public service their long-term career. Prosecutors and public defenders working for the federal government have a better ability to dedicate their careers to public service because of a salary step ladder that guarantees a pay increase with every year of experience, Delaney explained.
Without those guaranteed salary increases, state-level public service attorneys don’t feel confident making a choice to dedicate their careers in the same way, he said. PSLF gives them the opportunity to do that because they at least know they’ll be relieved of their debt in 10 years, freeing them to continue on a public service career path, Delaney said.
“The more you can do that, the more reliability you’ll have in the criminal justice system,” he said. “Quality of representation is tied to recruiting good people, then training them and retaining them.”
There are some income-based repayment programs available without PSLF, but Mike Freeman, county attorney in Hennepin County, Minn., said the monthly payments are still significant enough to eat into attorneys’ living expenses.
Lewis said it’s not enough to keep attorneys in public service jobs if you’re offering them the same programs that they would have in private practice—they need something extra.
Having a low salary and a capped student loan payment doesn’t take into account costs of living, he said.
Lewis said the public defenders he knows who use those other programs might have a more manageable payment, but it still takes a “significant chunk of what was already a low salary.”
Having the public service program behind them gives them hope that they can someday be entirely free of those payments and can live off modest salaries, he said.
Freeman said he understands the need for forgiveness and not just capping payments because of the radical change in law school expenses.
When he attended University of Minnesota Law School more than 30 years ago, he said he remembers paying around $4,000 to $5,000 a semester for tuition. He ultimately borrowed around $6,000 to $7,000 and repaid it in 10 years at $52.54 a month, he said.
“Why do I remember?” Freeman asked. “It was a lot of money.”
For a prosecutor to pay back $100,000 or more now is “real tough,” he added.
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