Feb. 11 (Bloomberg) -- Yale Law School, citing rising costs, cut back a loan program that encourages indebted students to take lower-paying public-service and government jobs.
Starting with the class enrolling this fall, graduates must make less than $50,000 a year for Yale Law School to pick up the entire cost of their student-loan payments, said Asha Rangappa, an associate dean. Currently, they could make as much as $60,000 annually to qualify. Yale also is reducing partial subsidies available for some higher-earning graduates.
Yale Law School has among the U.S.’s most generous loan-subsidy programs, designed to encourage students to work as public defenders and district attorneys instead of corporate lawyers. Under the program, graduates can have their loans forgiven entirely after 10 years.
“The driving force for this change was to ensure the sustainability of the program,” Rangappa said yesterday in a phone interview. “It needed to be reined in for it to survive.”
Yale University in New Haven, Connecticut, started its Career Option Assistance Program in 1989, and more than 1,500 law school graduates have participated through 2010, receiving more than $29 million in benefits, according to its website.
In 2010, the program distributed about $3 million in benefits to more than 300 graduates. Recent alumni have worked for such employers as the U.S. State Department, Human Rights Watch and the NAACP Legal Defense Fund, the school said.
The cost of the program has been growing 5 percent to 9 percent a year, and its increased popularity may be due to the economy or more interest in public-service law, Brent Dickman, associate dean for finance and administration, said in a phone interview. The Yale Daily News reported the change in the program yesterday.
Yale Law School charges $50,275 in tuition, according to its website. Under the new program, graduates with an average debt load of $107,000 will be eligible for partial subsidies of their student-loan payments if they earn as much as $90,000 a year, down from $108,000 a year previously, Rangappa said. At the lower end of that range, Yale will still pick up most of students’ loan payments, with the subsidies gradually reduced as their incomes rise, she said.
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