Iowa would offer lawyers loan help tied to service

Iowa’s college student aid commission would run the loan repayment program and its dedicated fund. Applicants would need to graduate from an accredited law school and hold an Iowa law license. They would need to practice in Iowa or commit to start when they sign an agreement. Payments would cover Stafford, federal graduate PLUS, and Perkins loans, including principal and interest. Annual help could not exceed the remaining eligible debt. Total help could not exceed the eligible loan balance when the lawyer signs the agreement. The fund could receive private contributions and state or federal money. Deposits would be set aside for the program. Unused money and interest earnings would stay in the fund. Loan help could last for up to six consecutive years of eligible practice.

The commission would require service agreements and rank applicants by their practice location, defense work, and schooling. Participating lawyers would practice in a designated Iowa area and meet required hours defending people who cannot afford a lawyer. Their preference determination would set the area and hours. First priority would go to rural residents practicing there who provide at least 50 defense hours yearly. Next would come rural practitioners providing at least 100 hours, then Iowa practitioners providing 200 hours. Fourth priority would go to graduates of an Iowa law school or high school, or people who completed private instruction under Iowa’s education law. A rural area would be a county or town with fewer than 26,000 people, more than 20 miles from a city of at least 50,000 people, using the latest federal census taken every ten years. Service requirements would apply each year help is received. Payments would stop immediately if a lawyer stops practicing as agreed, with help adjusted to the months they followed the agreement.

Recipients would subtract eligible program payments from income taxed by Iowa. The tax rule would cover program payments made to either the lawyer or the lender. The subtraction would apply only to assistance included in taxable income. Recipients could not subtract assistance amounts also deducted through the federal student-loan interest deduction. A recipient could claim the deduction for no more than six consecutive tax years in their lifetime.