Saving Students from Drowning in Debt—NC LEAF

By Evelyn Pursley

Many law graduates finish law school owing in excess of $100,000 in education loans (the average law school student debt in NC is around $109,610). Since 1990, the average tuition law school students pay has increased by over 200%. Graduates who want to take public service jobs are, therefore, faced with a serious challenge as they must meet their monthly education loan obligations (often the size of a mortgage payment) while earning traditionally lower salaries. Many find that they cannot make ends meet on a public service salary and are forced to forgo the opportunity to use their legal skills in service to their communities. Many who do accept public service legal jobs find they must leave after two to three years of service for higher-paying employment, leaving the public service employer with the cost of rehiring and retraining.

When it was started by students—with support from the deans of the state’s then five law schools—in 1989, the NC Legal Education Assistance Foundation (NC LEAF) was the first non-profit organization dedicated to loan repayment assistance for lawyers in the nation. Luke Largess of Tin Fulton Walker & Owen in Charlotte and current president of NC LEAF was one of those students. “Students who worked in public interest fellowships sparked the idea at an end of internship retreat in the summer of 1988. We convened a meeting of interested law students that fall. We went to our respective deans with the idea of forming a non-profit to run a state-wide program for graduates who took public service positions in North Carolina after law school. NC IOLTA and Z. Smith Reynolds gave us the initial seed money, and we stumbled forward a bit blindly. It took awhile to get good traction, but we were on to something that gathered lots of support.

As NC IOLTA executive director, I have always loved knowing that this organization that has accomplished so much good for our state was started by a small group of law students. It reminds me of that great admonition that we should “never doubt that a small group of thoughtful, committed citizens can change the world.”

Since that time, principally through legislative funding and IOLTA support, NC LEAF has provided debt repayment assistance of over $5.8 million to over 500 public interest attorneys working in 83 counties throughout North Carolina. These attorneys have served as assistant district attorneys, public defenders, and in legal aid offices. “Their work ensures the equal access to justice our society prizes,” says NC LEAF Executive Director Esther Hall.

Loan repayment assistance programs (LRAPs) like NC LEAF help bridge the gap for graduates working for public service organizations or agencies. And, by providing much-needed assistance to these public service lawyers, LRAPs help public service employers attract and retain gifted and committed young lawyers, which in turn benefits the communities in which they live and work.

Jim Barrett of Pisgah Legal Services in Asheville has seen those benefits in his program. “Law school loan repayment assistance helps us retain staff attorneys beyond their training period so that they are most productive at solving clients’ difficult problems. NC LEAF is, therefore, so important to the approximately 100,000 low-income people who need Pisgah Legal Services to help them meet their basic needs and be safe from domestic violence.”

From the beginning, the program has worked collaboratively with law schools and bar organizations in our state. The program’s board is composed of their representatives.

Current board member Susan Doyle represents the NC Conference of District Attorneys. "As an NC LEAF board member, I have seen the importance of being able to provide assistance to attorneys who want to give back to their communities through public service. In many cases, these attorneys would be unable to continue with this much needed work but for the help of NC LEAF. As the elected district attorney for Johnston County, I have witnessed firsthand the difference NC LEAF can make in helping assistant district attorneys fulfill their passion of prosecution, even while their salary is not enough to pay back enormous law school debt.”

The program has continued to receive annual grant funding from IOLTA for operating support. Since 1990, IOLTA has granted $1.1 million to NC LEAF, almost all of which has been allocated to operating support so NC LEAF could use other funding—particularly state funding—for loan repayment assistance. Understanding its importance to the state, the General Assembly also appropriated funds for the program that were used for loan repayments from 1993 until 2011. “We are incredibly grateful to IOLTA for their consistent support to operate our program, which has allowed us to direct state and other funding to the public interest attorneys to discharge their debts,” says Hall. The program has worked hard to diversify its funding base and to raise funds from individuals and law firms. It has become the administrator for additional LRAPs, but is most anxious to convince the General Assembly to provide financial support for the program again to stabilize funding for this important work.

NC LEAF Administers Additional LRAPs

Given its experience in administering a loan repayment assistance program, NC LEAF was asked to take on that task for a number of additional programs. Since 2010, it has been the designated state agency for disbursement of the federally funded John R. Justice Loan Repayment Assistance Program, designed to encourage qualified attorneys to choose careers as prosecutors and public defenders and continue in that service for three years. The grant provides equal assistance for prosecutors and public defenders, and has assisted 86 participants through the four years with $582,674 in funding.

Jennifer Harjo, current president of the NC Association of Public Defenders and NC LEAF Board member understands the value of loan repayment assistance through this program and from NC LEAF. “The ability to retain highly qualified and trained attorneys in a Public Defender Office is crucial to the preservation of the constitutional rights and liberties of all citizens. It is also the link to courtroom efficiency and timely resolution of cases. Due to the financial assistance of NC LEAF, North Carolina Public Defender Offices have been able to retain some extremely hardworking, dedicated, and underpaid attorneys who would otherwise be compelled to leave public service.”

NC LEAF is also pleased to administer the Legal Aid of North Carolina (LANC) loan repayment assistance program for its staff attorneys since 2007. LANC is the largest legal aid program in North Carolina and receives the federal funding from the Legal Services Corporation. After six months of employment at LANC, attorneys can qualify for up to $400 each month to go towards student loans. Part of the funding for this support comes from the Legal Aid of NC Fund at the NC Bar Foundation endowment, as several donors gave money specifically to support loan repayment assistance for LANC attorneys who graduated from their law schools—Wake Forest, UNC, and Duke. George Hausen, LANC executive director, is grateful to be able to use NC LEAF’s services. “We very much appreciate having a loan repayment assistance program with the experience to administer this program competently and efficiently. Loan repayment assistance has directly impacted our ability to retain experienced attorneys through this economic downturn. These attorneys have provided greater expertise and capacity to respond to the increased need for our services.” Sixty LANC attorneys are currently enrolled in the program.

In 2008 the federal College Cost Reduction & Access Act created a Public Service Loan Forgiveness Program, under which public interest attorneys, after 10 years and 120 loan payments, may qualify for forgiveness on the remaining balance of their student loans. While NC LEAF does not administer this program, it does provide information about the program to potential participants trying to decide how to structure their loan repayment future most effectively.

Responding to Funding Crisis

From 1993 through 2011, NC LEAF enjoyed its most stable funding as it received state funding (from an initial appropriation of $25,000 up to $500,000 in 2010-11) for loan repayments and operating funding from an annual IOLTA grant and law school support. Both were augmented by a fund-raising campaign, including a law firm campaign that allowed firms to sponsor individual attorneys. Since losing the state funding—the largest source of its loan repayments—the program has struggled to continue its loan repayment assistance.

Public interest attorneys working in Mecklenburg County have greatly benefitted from the generosity of the C. D. Spangler Foundation. In 2009 the foundation made a $250,000 gift in honor of Peter Gilchrist, retiring district attorney, who had been a staunch supporter of NC LEAF. As he told the American Bar Association when they were encouraging the establishments of LRAPs in 2003, “Law graduates today have a staggering amount of educational debt, which places a substantial burden on their ability to work in the public sector. I have lost many young lawyers, most of them forced to seek higher salaries elsewhere in order to deal with the financial strain of repaying law school debt while providing for their families. By helping young law graduates accept and remain in public service careers, North Carolina’s LRAP makes a tremendous difference for the citizens of my state.” The Mecklenburg Bar Foundation has added $78,000 to those funds in annual grants made since 2009 in support of public service lawyers in their county. To date, 43 attorneys in Mecklenburg County have been assisted through this combined support.

Other organizations have also stepped up to help NC LEAF as it struggles to continue loan repayment assistance in the absence of the state funding. NC IOLTA added small grants for loan repayment assistance to its operating support for 2013 and 2014. The NC Bar Association donated $30,000, and the NC State Bar is providing rent-free space to the organization in its new building. The NC Equal Access to Justice Foundation offered matching grant challenges of $15,000 each in 2012 and 2013, both of which were met through NC LEAF fund-raising. As Esther Hall notes, "It is particularly gratifying to see the level of support from former participants in response to our appeal for funds. They value the assistance received from NC LEAF early in their careers, and are generous in helping replenish the source so their peers can benefit."

Why We Support the Work—One Lawyer’s Story

Heather Taraska, assistant district attorney in Mecklenburg County, appreciates NC LEAF for assisting her in paying off her educational loans.

“When I told my parents that I wanted to go to law school to become a public interest attorney, they were able to offer me moral, but not financial, support. I borrowed money to pay for my tuition, my books, and my living expenses. I borrowed a lot of money, upwards of $75,000. After graduating 12 years ago, I began my career as a prosecutor earning $27,500 a year. I wasn’t sure how I was going to pay off my loans while working in the public sector, and it terrified me. NC LEAF helped me make my loan payments every month until there were no longer any to be made. Thanks to NC LEAF, I still put bad guys in jail, debt free.”

For more information regarding NC LEAF, please visit the website: ncleaf.org.

Evelyn Pursley has been the executive director of NC IOLTA since July 1997.