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The Journal of Higher Education 74.4 (2003) 476-478

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Repay As You Earn: The Flawed Government Program to Help Students Have Public Service Careers, by Philip G. Schrag. Westport, CT: Bergin & Garvey, Greenwood Publishing Group, 2001. 176 pp. $55.00.

There has long been speculation that excessive debt could influence major and career choices (e.g., Karmer & VanDusen, 1986; Newman, 1985). While research [End Page 476] does not yet confirm a relationship between debt and major choice (St. John, 1994), there is reason to be concerned about whether excessive debt influences the career choices made after college. Students who end up in career fields that are unrelated to the college majors are more likely to default (Flint, 1997). With the growing level of student debt, the role of debt burden should be of concern to faculty across the disciplines because repayment can be problematic, even in elite professions. Phillip Schrag's Repay As You Earn provides a sound review of recent federal efforts to ease repayment burden for students choosing public service careers. It also provides a case study documenting the reasons why a low percentage of law school graduates have not chosen this alternative repayment scheme.

Schrag documents the reasons why debt burden should be of concern, why income-contingent repayment came about as an option, and how it works. He starts by documenting the problem of college prices and growing levels of student debt (Chap. 1), a topic that has been widely addressed in the research literature (e.g., Fossey & Bateman, 1998). Schrag examines how income-contingent repayment came about, documenting President Clinton's campaign pledges and the legislative process (Chap. 2), providing an insightful description of the evolution of the policy arguments. He provides hypothetical individual cases to illustrate the way income-contingent repayment would work for students with different earnings streams (Chap. 5). He illustrates that the repayment scheme can lead to substantial loan forgiveness for individuals who choose public service careers. He even shows how individuals who enter higher earnings careers, say in private law firms, end up making the full repayment, but have some advantage in increasing monthly payments as they earn more across their careers. These chapters provide a comprehensive overview of the development of income-contingent repayment and should be informative for financial aid administrators.

Schrag also explores why the income-contingent option is not more widely used by law graduates. He analyses surveys of law students at Georgetown University and Catholic University (Chap. 3) and of financial aid administrators in private law schools (Chap. 4). The analysis of student surveys reveals that many law students expect to be involved in public service work, possibly as part of their employment in private law firms. However, a small percentage of students—and even students who appear headed toward careers in public service—actually take the income-contingent repayment option. His analysis indicates that students lack an understanding of the program. Students find that it is complicated to calculate how they would benefit from taking this option. This analysis provides interesting insights into the career decision processes used by law students as well. The survey of aid administrators revealed that most of the respondents did not provide adequate information to students on the details of the program. About half provided some information about the program to law students in their schools, but very few provided help with the arithmetic needed to figure out whether there was any advantage in taking this option. In combination, these chapters provide an informative case study of the reasons why income-contingent repayment has not been widely used by law graduates.

Chapter 6 provides an analysis of why the program is so unpopular. Schrag discerns two reasons. First, he argues that law students do not respond well to the financial incentives in the program because few really expect to have low earning [End Page 477] careers. He also speculates that high levels of debt could be encouraging more students to seek high earnings rather than public service...


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