ILNews

Federal loan repayment program set for expansion

Back to TopCommentsE-mailPrintBookmark and Share

The Obama administration’s move to expand its student loan repayment assistance program – an initiative which may help some lawyers struggling with debt – has put another spotlight on the debate over the rising cost of law school tuition.

President Barack Obama signed an executive order June 9 that would expand the Pay As You Earn program to 5 million more borrowers. This program caps federal student loan payments at 10 percent of the borrower’s income and forgives any amount left unpaid after 20 years.

Currently, PAYE is available only to those who graduated in 2010 and later. The president is proposing the initiative be offered to those who borrowed before October 2007 or ceased borrowing by October 2011.

However, as some point out, the executive order does little to address the problem of ballooning college costs.

While Christopher Chapman, executive director of Access Group Inc., praised the expansion of PAYE, he said many factors contribute to the problem of student loan debt. Part of the solution will have to come from schools making changes to their cost structure.

“No business can consistently increase the price of a product beyond the income of the customer without a negative impact,” Chapman said, adding schools have been taking “simple steps” to curb costs and provide more value to students.

Access Group Inc., a nonprofit comprised of 192 American Bar Association-approved law schools, educates and advises student borrowers who are seeking a professional degree.

Austen Parrish, dean of the Indiana University Maurer School of Law, noted tuition is a complicated issue. Often, he said, the sticker price is not the true cost law students pay because many receive financial assistance from the school.

He estimated that at IU Maurer, more than 90 percent of the students have been awarded reduced tuition rates with the average amount of reduction being between $22,000 and $25,000 annually.

In addition, providing a “rich intellectual environment” is not a cheap endeavor, Parrish continued. To be among the top ranked, law schools must offer students practical experience through clinics and externships with quality faculty and practitioners.

“It’s unclear that you can provide a high-quality law school education at a bargain basement price,” Parrish said. “I think the brightest students want to go to a place that provides a full range” of experiences.

The PAYE expansion will not happen immediately. The president has charged the Department of Education with developing the regulations and having the program available to more borrowers by the end of 2015.

Marvin Smith, director of student financial services at Indiana University-Purdue University Indianapolis, said questions surrounding how the expansion will be implemented make it difficult to determine how beneficial the program will be to students on the IUPUI campus, including those enrolled at the Indiana University Robert H. McKinney School of Law.

One very worrisome issue for law school graduates is the president’s apparent contradictory moves. On the one hand, he wants to increase PAYE while, on the other hand, his FY 2015 budget request would lower loan forgiveness amounts of borrowers who are in professional and graduate schools.

The White House is proposing to lower the amount of a graduate student’s debt that can be wiped away under the Public Service Loan Forgiveness program, according to an article written by José Espada, director of medical student financial aid at the IU School of Medicine. Under Obama’s budget, loan forgiveness would be capped at $57,500.

Chapman sees the expansion of PAYE as a positive move since it will make more student borrowers eligible for repayment assistance. PAYE and other similar loan repayment programs are good tools for law students and others with high debt and low salaries, he said.

However, Smith and Chapman said borrowers could actually end up owing more if they participate in the PAYE program. While the monthly payment will be lowered, the interest rate will not decrease so the balance on the loan could grow. Chapman also noted that the amount erased is counted as taxable income in the year it is forgiven, requiring borrowers to declare more in income for that year.•
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  2. what a wonderful world we are living, i still doubt this spell caster how he did it!!! i am Shechan Caroline am from Los Angeles I am so happy to let the whole word know how this powerful spell caster saved my marriage.Everything was going down the drain as my husband can not stop cheating on me with other women. It became used to always heating on me. I tried to make him stop, but I couldn't help the situation, the more I tried, the harder it becomes. At times we will fight and go apart for some months and we will come back again just because of our kids. One day a friend told me about this spell caster who helped her too, his name is Dr.oku, she said he uses white magic spells to solve spiritual problems. I decided to give it a try, I contacted him and he told me it will take just 2 to 3 days and I will see great changes in my husband. He actually cast a spell, believe me after 2 to 3 days of the spell, my husband was confessing different names of woman he has slept with. He begged for forgiveness and never to try it again. From that day till now, my mind is at rest. My husband dislike every other women on earth except me. And am so happy to have him for myself alone.The spell caster’s contact is okutemple@gmail.com or add him on whasapp +2347053113465?

  3. I agree. My husband has almost the exact same situation. Age states and all.

  4. Thanks Jim. We surprised ourselves with the first album, so we did a second one. We are releasing it 6/30/17 at the HiFi. The reviews so far are amazing! www.itsjustcraig.com Skope Mag: It’s Just Craig offers a warm intimacy with the tender folk of “Dark Corners”. Rather lovely in execution, It’s Just Craig opts for a full, rich sound. Quite ornate instrumentally, the songs unfurl with such grace and style. Everything about the album feels real and fully lived. By far the highlight of the album are the soft smooth reassuring vocals whose highly articulate lyrics have a dreamy quality to them. Stories emerge out of these small snapshots of reflective moments.... A wide variety of styles are utilized, with folk anchoring it but allowing for chamber pop, soundtrack work, and found electronics filtering their way into the mix. Without a word, It’s Just Craig sets the tone of the album with the warble of “Intro”. From there things get truly started with the hush of “Go”. Building up into a great structure, “Go” has a kindness to it. Organs glisten in the distance on the fragile textures of “Alone” whose light melody adds to the song’s gorgeousness. A wonderful bloom of color defines the spaciousness of “Captain”. Infectious grooves take hold on the otherworldly origins of “Goodnight” with precise drum work giving the song a jazzy feeling. Hazy to its very core is the tragedy of “Leaving Now”. By far the highlight of the album comes with the closing impassioned “Thirty-Nine” where many layers of sound work together possessing a poetic quality.

  5. what a wonderful world we are living, i still doubt this spell caster how he did it!!! i am Tamara Barrow am from USA I am so happy to let the whole word know how this powerful spell caster saved my marriage.Everything was going down the drain as my husband can not stop cheating on me with other women. It became used to always heating on me. I tried to make him stop, but I couldn't help the situation, the more I tried, the harder it becomes. At times we will fight and go apart for some months and we will come back again just because of our kids. One day a friend told me about this spell caster who helped her too, his name is Dr.voodoo, she said he uses white magic spells to solve spiritual problems. I decided to give it a try, I contacted him and he told me it will take just 2 to 3 days and I will see great changes in my husband. He actually cast a spell, believe me after 2 to 3 days of the spell, my husband was confessing different names of woman he has slept with. He begged for forgiveness and never to try it again. From that day till now, my mind is at rest. My husband dislike every other women on earth except me. And am so happy to have him for myself alone.The spell caster’s contact his email at: voodoospelltemple66@gmail.com visit his website on http://drvodoospelltemple.webs.com

ADVERTISEMENT