PA Bar Foundation & PA IOLTA Board to Launch Statewide Loan Repayment Program


HARRISBURG, PA – The Pennsylvania Bar Foundation, the charitable affiliate of the Pennsylvania Bar Association, and the Pennsylvania Interest on Lawyers Trust Account (IOLTA) Board have partnered to launch a statewide loan repayment assistance program (LRAP) to help attorneys employed at IOLTA-funded legal services organizations better manage their law school loan debt and to help IOLTA-funded legal aid organizations recruit and retain the best and the brightest attorneys for service in the public good.

The new program will provide for one-year loans, payable to qualified attorneys quarterly, with a 12-month employment requirement at qualifying organizations. Providing a participating attorney continues to meet the eligibility requirements, the attorney can apply for and receive up to 10, one-year loans over his/her tenure in qualified employment. The loans will be used to repay loans incurred for undergraduate and law school education costs and will be forgiven at the end of each year if eligibility requirements have been met.

Funding for the statewide LRAP comes from an IOLTA Board grant to the Bar Foundation. The IOLTA Board plans to fund the grant using pro hac vice funds that it has received from out-of-state lawyers who wish to make an appearance in a Pennsylvania court.

“In these times of increasing need for people in public service, the Supreme Court of Pennsylvania has taken the lead in finding a way to attack one of the main deterrents to more lawyers getting directed into public service opportunities,” said Pennsylvania Bar Association President Gretchen A. Mundorff. “It is a tremendous step forward and one for which we thank the court for its leadership and foresight.”

The LRAP is the culmination of nearly two years of planning by the Foundation and IOLTA and is the direct outcome of the 2006 Report and Recommendation of the Pennsylvania Bar Association Task Force on Student Loan Forgiveness and Repayment Assistance. The report identified law student loan debt as the chief obstacle to law school graduates choosing careers in public service over the more lucrative careers in private practice. With the average graduating law student owing close to $100,000 in loans, the $34,000 average starting salary for public interest attorneys becomes an effective barrier to talented lawyers entering and staying in public service careers.

“The amount of loan assistance provided to each applicant will depend on the available funding and the number of qualifying attorney applicants,” said Foundation President George Gvozdich Jr. of Ebensburg. “Initially, a uniform amount of assistance will be provided to each qualified applicant, and it is anticipated that each qualified attorney will receive about $2,000. As more experience is gained, the program may be amended in subsequent years to have several tiers of assistance based on the qualifying debt to income ratio of the applicants.”

The Foundation will administer one loan assistance cycle each year beginning September 1. Eligible IOLTA-funded organizations are expected to distribute the LRAP applications to their staffs, collect and submit them to the Bar Foundation no later than October 15. An initial quarterly payment will be made to eligible attorneys in January. The Foundation will make the remaining quarterly disbursements based on receipt of the quarterly certifications of eligibility.

Loan applicants must be licensed to practice law in Pennsylvania or be permitted to practice law under Bar Admission Rule 311, have a valid Pennsylvania Supreme Court-issued bar number, be in good standing and practice law as an employee of an IOLTA-funded organization. At this time, the applicant’s total gross salary may not exceed $60,000, and at the time of application, the amount of educational debt based on loans from commercial and government lending institutions, as well as university or other private institutional loans associated with law school and undergraduate educational debts must be greater than or equal to the amount of the LRAP grant. The attorney’s qualifying educational debt must be in satisfactory repayment.

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