By Grace Yurish
Following the recent United States Supreme Court (SCOTUS) rejection of President Joe Biden’s plan to cancel some or all federal student loan debt, many young lawyers and law students are left worried about the financial burden that law school has put on them.
“It’s depressing and disheartening to say the least,” says Alex Attilli, a second-year law student at the University of New Hampshire’s Franklin Pierce School of Law. “Getting rid of ten grand, or for some people twenty grand, would have been monumental. That would have canceled some people’s debt, and it would have substantially reduced my own.”
In a 6-3 ruling, the highest court struck down Biden’s initiative aimed at providing relief to as many as 43 million federal student loan borrowers. The plan intended to eliminate up to $20,000 of debt for those who had received Pell Grants for college attendance and up to $10,000 for most other borrowers. However, SCOTUS concluded that the Biden Administration lacked the authority to forgive these debts, causing apprehension among many loan borrowers regarding their financial futures.
In 2021, the American Bar Association’s Young Lawyers Division conducted a student loan survey1 to show the debt burden among young lawyers, and the effect on their lives and well-being. Ninety percent of survey respondents borrowed student loans to pay for their legal or other education. On average, borrowers owe $108,000 in law school loans and $130,000 in all loans combined at graduation.
The report found that 90 percent of borrowers felt their debt hindered their progress toward major life milestones like buying a house, getting married, or having children. Additionally, more than half of the respondents reported that they worry about being able to pay for monthly living expenses.
“At the end of the day, student loans impact what jobs we take, whether to stay in our job, or leave for another one,” says attorney Samantha Puckett of Barnes and Thornburg in Boston and member of the NHBA’s New Lawyers Committee. “It also impacts things like buying a home, starting a family, or how many kids you have. All those kinds of things are really impacted by student loans.”
The survey also concluded that nearly a third of new lawyers have moved away from public service work and more than half have prioritized their salary due to student loan debt. This shift has ramifications for marginalized communities’ access to justice. Attilli, who is passionate about public service work, acknowledges the challenges posed by loan debt.
“It’s frustrating for people like me who want to go out and do this important work to help people, but who like they’re limited financially,” Attilli says. “I think because of the decision, a lot of people who wanted to go into public interest may end up going into private practice for monetary reasons. Their loan payments are just too high.”
The Court’s decision held that the Biden Administration did not have authority under a 2003 federal law to forgive $430 billion in student debt. The law, called the Higher Education Relief Opportunities for Students Act (HEROES Act), was enacted following the tragedies of September 11, 2001. The original act gave the Secretary of Education the authority to “waive or modify any statutory or regulatory provision” to protect borrowers who were affected by acts of terrorism. In 2003, the act was expanded to include borrowers affected by wars, military operations, and national emergencies. When the COVID-19 pandemic hit the country and then-President Donald Trump declared it a national emergency, the HEROES Act was invoked to pause student loan repayment requirements and halt the accumulation of interest. As of September 1, interest has resumed with payments due starting in October.
“As young lawyers, and young people with loans, we understand that we borrowed this money, and we are obligated to pay back what we borrowed,” Puckett says. “We’re just looking for something reasonable to help us pay off this debt because even on federal loans the interest rate is eight percent, which is outrageous.”
It appears interest rates are one of the biggest issues surrounding student loans. Many feel that it is impossible to pay back what they borrowed when the amount becomes insurmountable, and that getting interest rates under control would be a reasonable and helpful way to provide some relief.
“I think a lot of these issues could be solved with lower interest rates alone,” says Attilli. “People can pay on time every month, they could even make double payments, and their balance will just go up and up because of how high interest rates are. Back when my parents were in school, interest rates weren’t eight percent. That’s what they are this year.”
The Biden Administration is continuing to pursue other avenues to provide relief to millions of citizens struggling to get their debt under control. In July, a mere two weeks after the SCOTUS ruling, Biden announced the cancellation of the remaining balances of over 800,000 borrowers, amounting to $39 billion. This forgiveness targets borrowers affected by previous payment-counting errors. Eligibility for this cancellation requires the accumulation of the equivalent of 20 to 25 years’ worth of qualifying months, largely benefiting older borrowers. Thus, the younger generation continues to advocate for debt assistance.
“I hope that we can come up with something reasonable that makes it more realistic for us to pay off what we’ve borrowed,” Puckett says. “Whether that’s a reduction of the interest rate or a defined amount of money. I hope that’s something we can find bipartisan support for. It’s such a high priority for Millennials and Gen Z, so I’m sure it will be a focal point in the next election.”
Endnote
1. americanbar.org/content/dam/aba/administrative/young_lawyers/2021-student-loan-survey.pdf