Shortly afterwards, Congress and the Obama administration went even further than the letter requested, by getting rid of government-guaranteed private educational loans altogether, and replacing them with direct loans from the federal government. This change permitted students to borrow 100% of the cost of attendance at any ABA-accredited law school from the government, no matter what that figure might be.
March __ 2010
Washington, DC 20510
I am a first/second... year law student attending Your Law School. As your constituent and a member of the American Bar Association Law Student Division, I request your support for law students and recent graduates struggling to meet their student loan obligations during this economic downturn.
Specifically, I request your support of two important issues: (1) raising the Stafford Loan limits to at least $30,000 per year, and (2) incorporating bar exam study loans under the definition of an education loan.
Eighty percent of students finance higher education with student loans. On average, law students graduate with $85,000 in law school debt in addition to $20,000 in undergraduate school debt. Many law students must supplement their federal loans with more expensive and less flexible private loans. Recent graduates in the legal profession are having difficulty finding jobs in the current economy and consequently struggling to meet their debt obligations.
One important way to help reduce the reliance on expensive private loans is to increase the cap on the amount that law graduates may borrow annually under the Stafford loan program. Because Stafford loan caps are not automatically adjusted for inflation, under the current Stafford loan cap, law students can only borrow $20,500 per year, which does not adequately cover the cost of a legal education today.
I urge you to support an increase of the cap to at least $30,000. This increase mirrors the amount permitted for medical and veterinary students. Law students should be able to enjoy the same privilege, particularly since tuition has increased 448% at public law schools and 224% at private law schools in the past twenty years. Stafford loan caps should be raised so that law students like me can receive the low interest rates, flexible terms, and benefits for those entering public service (loan forgiveness, deferment, forbearance, and assistance) that only federal loan programs offer.
Additionally, I ask you to please support the inclusion of bar study loans in the definition of an education loan. Because law students across the country prepare for the bar exam after they graduate, the loans they will need do not fit within the definition of an education loan under Title IV of the Higher Education Act. No federal loan program covers the costs of bar exam review courses or exam fees, and because of this, all bar loans must be obtained through private lenders, which offer fewer repayment options and less flexibility compared to federal loans. The price of a comprehensive bar review course is typically between $2,000 and $3,500, and law school graduates must also borrow for living expenses while studying. Graduating law students cumulatively borrow over $450 million each year in private bar study loans.
Foregoing bar review courses is risky, particularly since the ability to practice law hinges on passage of the bar exam. Amending Title IV to include bar study and licensure loans under the definition of education loans will allow law school graduates to obtain federal loans for test review and examination costs. Passing the bar and obtaining a law license are essential to becoming a practicing attorney.
Being able to finance a legal education with federal loans is critical to the diversity of the legal profession and the judiciary. Students who otherwise could not afford a legal education can attend law school and become lawyers on the promise of a federal education loan. Congress can provide needed relief for law students during the economic recession by raising Stafford loan caps and including bar study loans within federal education loan programs.