The Legal Beat

A Student Loan Bailout Would Substantially Impact The Legal Public Sector
Posted on Wednesday July 17, 2019

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There has been much discussion about student loan bailouts recently. Indeed, some politicians have proposed paying off a certain amount of student debt for every borrower, and other politicians have even proposed completely paying off everyone’s student debt. Of course, it is unlikely if any of these proposals will ever get passed, since there is not much political will these days to do much of anything. In addition, many people have already argued that such proposals would be unfair, since many people take scholarships at lower ranked schools or make other sacrifices to reduce their student debt, and this effort would be undermined by a student loan bailout. Others have also opined about how such proposals would disproportionately affect the wealthy, since individuals with degrees and a higher income potential might realize the most benefits from a bailout.

Along with these points, it is also important to consider the effect that any student loan bailout would have on the legal public sector. As many people know, individuals who work for the government and nonprofits can typically have their student loans forgiven after 10 years. Many people pursue public sector jobs for the express purpose of obtaining debt forgiveness, and most lawyers know individuals in this situation. However, if people had their student debt forgiven by the government, they might not have much incentive to work in public interest fields.

For instance, before I started my own law firm, I worked on a case with the most amazing attorney for a municipality that was also being sued in the matter. Even though my colleague had double the caseload that I had, he brought his “A game” to every brief, argument, deposition, and other activity related to this case. I remember one time, we were trying to view surveillance files that had been corrupted and were unable to be opened. In a last-ditch effort, this attorney told me he tried putting the CD of the surveillance files into his Xbox to see if it would somehow work. As I am sure everyone would agree, this attorney was dedicated!

Years later, I saw this lawyer on a train, and I told him that the firm I was currently working at was looking to hire new associates. I told my colleague how impressed I was with his work, and I thought my new firm would pay him much more money than he earned as a government lawyer. This lawyer appreciated my consideration, but he told me that he needed to work in the public sector for at least 10 years to receive debt repayment. The amount of debt repayment my colleague would receive exceeded the difference in compensation between his current role and the job at my firm. In addition, my colleague was already well into his 10 years, and he didn’t want to quit working toward debt repayment after all of the effort he had already put into this program.

Without Public Service Loan Forgiveness, my friend would have had few incentives to stay in the public sector. Some might argue that public sector jobs often afford greater lifestyle benefits and the opportunity to work on matters in ways not possible in private practice. However, these incentives are not available in a number of public sector roles. Indeed, my colleague who was employed for a municipality was overworked and underpaid in the public sector, and he could work on the same types of matters at a firm or by starting his own shop. Of course, some people like to work in the public sector, since they are doing good and serving others. However, when it comes down to it, there is currently no better incentive to work in public sector roles than the debt forgiveness that is available through Public Service Loan Forgiveness.

Of course, one could argue that it is not fair for lawyers to be shackled to a career simply because they need to pay off student loans. It could easily be argued that a student loan bailout would empower attorneys to find jobs that bring them fulfillment separate from the need to pay off their student loans. In fact, it could be argued that a student loan bailout would empower individuals to enter the public sector, since the need to pay student loans might be keeping attorneys from lower-paid jobs in public interest roles. Ultimately, one positive aspect about a student loan bailout would be that it would allow attorneys and other individuals to pursue passions rather than stay shackled in certain roles.

In any case, I have already seen a number of articles about how a student loan bailout could affect people’s decisions to enter the military, live in certain parts of the country, and make a number of life decisions. However, it is also worth noting that a student loan bailout would have massive implications on the legal public sector. Since many dedicated attorneys stay in the public sector to receive debt forgiveness, a student loan bailout could impact the legal services provided to governments and nonprofits.

Jordan Rothman is the Managing Attorney of The Rothman Law Firm, a New Jersey and New York litigation boutique. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at [email protected].