I noticed while killing time on Google today that the Higher Education bill that the President signed back in August authorized a student loan repayment program for prosecutors and PD's.
Anybody have any idea of the details of the plan, if it will actually be funded, and how the application process will work?
There is next to nothing, as far a detailed explanation of the program goes, on the internet.
I contacted the ABA about this a while back and the basic answer was "Yes, it exists. No, there's no funding yet. No, no one's decided how it will be distributed yet." With the economy how it is, I'm doubting we're going to have funding for it any time soon. But it's a good first step!
As a recent law school grad, I've been very interested in the program(s). Regulations were promulgated in November, 2008. If you're bored one day -
My understanding is that the program is not funded and that because the eligibility date was set back at October 2007 (if I'm remembering correctly) then it does not have to be funded until someone reaches the required 120 on-time payments. So, they've got 10 years.
There's good info on how to "enroll" in the program - which I suppose would be the ultimate act of optimism - at Equal Justice Works.
Equal Justice Works
If you act responsibly now and pay down on your loans, then there will be less to forgive...so that doesn't seem like you're getting the most benefit from the program.
However, if you have a larger balance left to be forgiven, then as it is set up now, you are going to be taxed for that forgiven amount as income in the tax year in which the forgiveness occurs. Nice.
You also need to "morph" all of your federal loans into Federal Direct Loans. Since they're really not offering any consolidations right now (at least that's what my pal Sallie Mae has told me) - then I'm not sure how you transfer them over to this type of loan.
All in all - a big ol' confusing mess!
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