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Law Schools Take On Student Debt to Help Public-Interest Firms

July 3, 1995

THOUGH LAURIE Hoefer had always wanted to work as a lawyer for a public-interest organization, she couldn’t quite shake the idea of applying to a big law firm. Having racked up $60,000 in school loans, who could blame her?

But Ms. Hoefer didn’t want money to stand in her way, and neither did Yale Law School. So when she graduated in 1993 and took an $18,000-a-year job at a nonprofit organization, the law school decided to repay the loans for her. Ms. Hoefer now receives $7,600 from Yale each year to cover her annual loan obligation while she provides legal services to immigrant workers in Manhattan’s Lower East Side.

Whether the clients they intend to represent are the well-heeled or the downtrodden, law-school students these days are graduating with a record level of debt.

Fearful that the number of graduates interested in public service will shrink even further as a result, Yale and other law schools are boosting their loan-repayment programs. The number of law schools offering the programs has climbed to 50 from just five 10 years ago.

``Loan forgiveness is on the rise, and it’s on the rise because the price has been increasing so dramatically to attend law school,″ said Jamie Merisotis, president of the Institute for Higher Education Policy.

Since 1985, law-school tuition has risen 7 percent to 10 percent a year, and law students today graduate with an average debt of $40,000 to $80,000. Add interest, and a student can end up paying more than twice that amount over the life of a 20-year loan. Even Supreme Court Justice Clarence Thomas, who graduated from Yale Law School in 1974, didn’t finish paying his loans until two years ago.

Law-school placement officials say the daunting debt load makes it difficult for many students to pursue public-interest work. On average, law-school graduates going into the public sector make $28,200 a year, compared with $50,000 for those who go into private practice.

Not surprisingly, law graduates taking private-sector jobs outnumber their public-sector colleagues 18-to-1.

SOME PUBLIC-interest advocates, however, say it isn’t just the money that deters graduates from public-interest law. They say that law schools condition students to be more comfortable with the culture of law-firm practice and the high-paying jobs that can go with it. Only about 2.8 percent of today’s law-school graduates go to work for public-interest organizations, compared with 10 percent in the 1970s.

``At most law schools there is an acculturation process,″ said Tom Schoenherr, the director of career counseling at Fordham University’s Public Interest Resource Center. He said the lack of exposure to public-interest law in courses at some schools discourages students from taking that area seriously.

Even the recruiting process at law schools, where private employers far outnumber public-interest recruiters, sends a disheartening message about public-interest work. ``In September we’re having 270 legal employers come to our campus,″ said Jo-Ann Verrier, assistant dean for career planning at the University of Pennsylvania Law School. ``Only a very small number of public-interest organizations can afford to do recruiting.″

Ellen Schurdak, who graduated from the University of Pennsylvania Law School in January, said that during law school she had to scramble to find summer job opportunities in public-interest law, unlike classmates who were recruited by major law firms as summer associates. And while the summer associates made $1,200 a week, Ms. Schurdak had to scramble for sponsors to fund her own public-interest job at the Disabilities Law Project in Philadelphia.

After graduation, however, Ms. Schurdak qualified for the law school’s loan-repayment program when she took a $34,000-a-year job with the Philadelphia-Camden Empowerment Zone, an economic-development program. The law school pays $558 a month toward Ms. Schurdak’s $700-a-month loan obligation.

UNDER THE LOAN-repayment programs, students typically have to earn below a specified income level, ranging from $25,000 at Santa Clara University to $48,000 at New York University. Depending on the law school, graduates may be eligible immediately after graduation, or they may have to first spend as long as five years working at a low-paying job in the public sector.

The payments are usually made either as a grant or as loan forgiveness, reducing a portion of the amount owed each year. The loan usually is paid or forgiven entirely in three to 10 years.

``We want to take away all barriers that prevent students from doing what they want to do. If debt is a barrier, let’s remove it,″ said Steve Kelban, executive director of the Public Interest Law Center at New York University. Last fall, the New York University School of Law announced a $10 million increase in its loan-repayment program. In May, Yale Law School boosted its annual loan-repayment program to $25 million from $16 million the year earlier.

Public-interest advocates say it wasn’t always so difficult to convince graduates to work for nonprofit organizations.

In the 1970s, more law-school graduates opted for public-interest jobs than in any other period. But that changed sharply in the mid-1980s, when the legal business was booming and the salaries for young associates soared. ``Billable hours became king and queen,″ said Victor Geminiani, executive director of the Legal Aid Society of Hawaii. ``More and more people worked in firms and billed 1,200 to 2,000 hours in order to make partner.″

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