Will the Income-Based Repayment Program Enable Law Schools to Continue to Provide 'Harvard-Style' Legal Education?

Abstract

Legal education provided in the prevailing "Harvard-style" now costs students on average between $160,000 and $250,000 for their three years of study, the precise amount depending on the law school attended, the alternative employment opportunities foregone, and the amount of scholarship assistance provided. However, the median starting salary for full-time, entry-level legal positions has declined in recent years to only $60,000/year, and upwards of 45% of recent law graduates are now unable to obtain fulltime legal employment within nine months of their graduation. This dismal employment situation is unlikely to significantly improve over the next few years. While the attractive job opportunities still available to graduates of the elite law schools justify the large majority of those graduates incurring the high costs of legal education, even under unsubsidized federal student loan terms, the more limited job prospects facing most graduates of nonelite law schools do not justify their incurring those costs. However, the Income-Based Repayment ("IBR") program as now implemented by the Obama Administration's Pay As You Earn ("PAYE") rules may significantly change this situation for some of those latter students. In this Article I conduct several different detailed analyses of the IBR program under the PA YE rules and of the related and even more generous Public Service Loan Forgiveness ("PSLF") program. My conclusion is that the IBR loan repayment and debt-forgiveness provisions are sufficiently attractive so that Harvard-style legal education is once again a fi