New Northwestern School of Law debt relief program faces criticism

Josh Rosenblat, Reporter

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A new Northwestern School of Law program aimed at relieving some of its graduates’ debt faces uncertainty about its potential impact.

Announced in late April, NU’s Interest Freedom Plan calls for the school to pay the first year of law school loan interest payments for unemployed graduates and graduates making less than $85,000 per year in the private sector. The program will start with the class of 2015 and is guaranteed for the three subsequent graduating classes, said Don Rebstock, Law’s associate dean of enrollment management, career strategy and marketing.

NU estimates about 15 percent of each graduating class — about 40 individuals — will benefit from the IFP, Rebstock said. He said the changing legal marketplace has left fewer graduated with more lucrative job opportunities than were available in the past.

“This program hopefully gives people more freedom in being able to pursue (less lucrative) positions and diversify their options,” he said.

Rebstock said he expects most graduates to continue to take jobs closer to the median salary for a Law graduate — around $160,000 per year. The program would not cover interest payments for graduates who make more than $85,000.

“I don’t think it’s a big benefit,” Alex Holt, an education policy analyst at the New America think tank, said about the program. “There’s nothing wrong with it. It just seems a little bit more like a gimmick to me than anything else.”

Holt said the program doesn’t do much to solve the problem of the massive debt incurred by students because it has a “fairly limited benefit.”

NU Law graduates currently hold the third-highest average debt among law schools at more than $160,000, with 80 percent of students graduating with debt, according to U.S. News & World Report. Across the country, law school graduates have the second-highest average debt among professional students at $140,616, according to a 2014 New America study.

“One of the reasons you’re willing to take on that debt is that you’re investing in something that has a relatively high return rate, even if you’re taking on a bigger amount of loans,” said Marco Minichiello, the president of NU’s Student Bar Association.

Although appreciative of the program, Minichiello, who just finished his first year at Law, doesn’t anticipate the program will majorly influence students and is skeptical about its impact on average debt. Minichiello said the policy would make taking a lower paying job a bit easier on students.

Holt and Rebstock said the Interest Freedom Plan is the first of its kind, so it is difficult to predict its overall impact.

Rebstock estimates the average borrowing levels for students will fall “by at least $10,000 from where it is now per student” over the three-year duration of the program.

Holt, though, doesn’t see it as a step toward solving Law students’ debt issues.

“They’re saying, ‘Look, we know you’re going to borrow $150,000 in debt so here’s this tiny little benefit to make you feel better about your decision.’ They’re not really taking responsibility,” Holt said. “A step in the right direction would be for them to lower tuition.”

Minichiello agrees with Holt’s sentiment, saying the program does not solve the problem of student debt.

“I would just want that financial aid upfront — either across the board or on merit- or need-based for people — because not only is that more appealing for people coming in, but you’re not even accruing interest (on the financial aid) because the school’s paying for more of your education,” he said.

Rebstock said Law has been at the forefront of top law schools in terms of tempering its tuition increases.

“There’s not necessarily a tradeoff between whether funds are allocated at the front end, like financial aid, or back end, like IFP,” Rebstock said.

Students who take less lucrative positions will be specifically targeted by the Interest Freedom Plan “to even things out,” he said.

Email: joshuarosenblat2017@u.northwestern.edu
Twitter: @jmrosenblat

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