Higher Education Reauthorization Act Loan Repayment Assistance Programs

The Legal Assistance Loan Repayment Program

The program of loan forgiveness for service in areas of national need authorizes the Education Department to provide up to $2,000 per year for up to five years for those serving in specified “areas of national need”. Among such areas are prosecution, public defense, and legal advocacy in low-income communities at a nonprofit organization.

The program of loan repayment for civil legal assistance attorneys authorizes the Education Department to provide up to $6,000 per year in loan repayment assistance to eligible full-time civil legal assistance attorneys. . The program is designed as follows: the Education Department is to make direct payments to the lender and issue a new, forgivable loan to the attorney in exchange for a three-year service commitment. The schedule of loan forgiveness will be clarified through regulations, expected by November 1, 2009. An attorney may renew service commitment and receive benefits up to maximum of $40,000.

Federal student loans (both Federal Family Education loans and Direct loans) are eligible for assistance; however, Parent PLUS loans and commercial and alternative loans are not eligible.

Attorneys who have practiced law for five years or less and have served as a civil legal assistance attorneys for 90 percent of that time are given priority in the disbursement of repayment benefits. Those who were awarded funds under the loan repayment for civil legal assistance attorney program during the preceding year and have completed less than three years of the first required period of service are given priority.

Appropriations: The Higher Education Reauthorization and College Opportunity Act authorized the appropriation of $10 million for the loan repayment for civil legal assistance attorneys program for the 2009 fiscal year and such sums as necessary for the five succeeding fiscal years. Funds are unlikely to be appropriated for the 2009 fiscal year, and appropriations are not expected before October 2009. Even if the program is eventually fully funded, the funds are unlikely to be sufficient to cover all eligible attorneys. For this reason, expect that not all eligible civil legal assistance attorneys will receive assistance under this program. Similarly the loan forgiveness for service in areas of national need program is unfunded.

Caution regarding Anti-Double Benefit Provision of Civil Legal Assistance LRAP: The Education Department will issue regulations detailing the administration of these programs. Attorneys who receive assistance under the loan repayment for civil legal assistance attorneys program probably may not count payments made during the three years of their service commitment toward public service loan forgiveness under the College Cost Reduction and Access Act. Similarly payments made while receiving benefits under the loan forgiveness for service in areas of national need program may not count toward public service loan forgiveness. A person likely may receive benefits from only one of the Higher Education Reauthorization and College Opportunity Act programs at a time. Advocates are working to clarify and perhaps amend this provision of the Act.

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