To provide financial assistance to law school graduates who choose to accept employment in a public interest position.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Public Interest Lawyer Assistance 
and Relief Act''.

SEC. 2. FINDINGS.

     The Congress finds the following:
            (1) The ability to repay financial obligations incurred in 
        obtaining a legal education has become a deterrent to law 
        school graduates accepting public interest employment.
            (2) The increasing level of educational debt leads recent 
        law school graduates to accept positions with private firms 
        offering high salaries rather than with lower paying public 
        interest organizations.
            (3) This has led to a decrease in the number of attorneys 
        available to serve public needs in government, non-profit, and 
        special interest capacities.
            (4) The establishment of a Federal loan repayment 
        assistance program for attorneys entering public interest jobs 
        will increase access to legal services in these areas by 
        helping recent law school graduates to meet their educational 
        financial obligations.

SEC. 3. ESTABLISHMENT OF PROGRAM.

    (a) Program.--
            (1) In general.--The Secretary of Education (in this 
        section referred to as the ``Secretary'') shall carry out a 
        program of assuming the obligation to repay, pursuant to 
        subsection (c), a loan made, insured, or guaranteed under part 
        B or D of title IV of the Higher Education Act of 1965 
        (excluding loans made under sections 428B and 428C of such Act 
        or comparable loans made under part D of such title) for any 
        borrower who enters into an agreement with the Secretary to 
        complete 3 years of service as a lawyer employed in a public 
        interest position.
            (2) Award basis; deferment.--
                    (A) Award basis.--Loan repayment under this section 
                shall be on a first-come, first-serve basis and subject 
                to the availability of appropriations, and to any 
                limitations imposed by the Secretary under section 5. 
                The Secretary shall, on the basis of an application 
                that complies with subsection (d)(1), select from among 
                eligible applicants the borrowers with which to enter 
                into the agreements described in paragraph (1).
                    (B) Deferment.--The Secretary shall, by regulation, 
                provide for the deferment of repayment of loans made, 
                insured, or guaranteed under part B or D of title IV of 
                the Higher Education Act of 1965 (excluding loans made 
                under sections 428B and 428C of such Act or comparable 
                loans made under part D of such title) for borrowers 
                who enter into such agreements and provide evidence in 
                accordance with such regulations of employment in a 
                position qualifying for repayment of such loans under 
                paragraph (1).
            (3) Regulations.--The Secretary is authorized to prescribe 
        such regulations as may be necessary to carry out the 
        provisions of this section.
    (b) Loan Repayment.--
            (1) Eligible amount.--Except as provided by the Secretary 
        pursuant to section 5, the amount the Secretary may repay on 
        behalf of any individual under this section shall not exceed 
        the greater of--
                    (A) the sum of the principal amounts outstanding of 
                the individual's qualifying loans at the beginning of 
                the first year of service described in subsection 
                (a)(1); or
                    (B) a total of more than $20,000.
            (2) Construction.--Nothing in this section shall be 
        construed to authorize the refunding of any repayment of a loan 
        made under part B or D of title IV of the Higher Education Act 
        of 1965.
            (3) Interest.--If a portion of a loan is repaid by the 
        Secretary under this section for any year, the proportionate 
        amount of interest on such loan which accrues for such year 
        shall be repaid by the Secretary.
    (c) Repayment to Eligible Lenders.--Except as provided by the 
Secretary pursuant to section 5, the Secretary shall pay to each 
eligible lender or holder for each year an amount equal to one-third of 
the aggregate amount of loans which are subject to repayment pursuant 
to subsection (b)(1).
    (d) Application for Repayment.--
            (1) In general.--Each eligible individual desiring loan 
        repayment under this section shall submit a complete and 
        accurate application to the Secretary at such time, in such 
        manner, and containing such information as the Secretary may 
        require.
            (2) Eligible positions.--An individual shall be treated as 
        serving as a lawyer employed in a public interest position 
        under this section after completing a year of service as a 
        practising attorney in a position in--
                    (A) local, State, or Federal government;
                    (B) an organization that is exempt from taxation 
                under section 501(c)(3) of the Internal Revenue Code of 
                1986; or
                    (C) a judicial clerkship.
    (e) Treatment of Consolidation Loans.--A loan amount for a 
consolidation loan made under section 428C of the Higher Education Act 
of 1965, or a Federal Direct Consolidation Loan made under part D of 
title IV of such Act, may be a qualified loan amount for the purpose of 
this section only to the extent that such loan amount was used by a 
borrower who otherwise meets the requirements of this section to 
repay--
            (1) a loan made under section 428 or 428H of such Act; or
            (2) a Federal Direct Stafford Loan, or a Federal Direct 
        Unsubsidized Stafford Loan, made under part D of title IV of 
        such Act.
    (f) Prevention of Double Benefits.--No borrower may, for the same 
service, receive a benefit under both this section and subtitle D of 
title I of the National and Community Service Act of 1990 (42 U.S.C. 
12571 et seq.).

SEC. 4. ADMINISTRATION.

    The Secretary shall create or designate an administering body 
within the Department of Education to--
            (1) establish and determine eligibility criteria under this 
        Act;
            (2) alter the limits on the amount of loan repayment 
        assistance participants may receive during their period of 
        participation under section 3;
            (3) alter the limits on the amount of time a law school 
        graduate may participate in the loan assistance repayment 
        program under section 3;
            (4) accept funding and gifts on behalf of the program;
            (5) raise funds on behalf of the program; and
            (6) disburse funds or designate another entity to do so on 
        behalf of the program.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

     There are authorized to be appropriated to carry out this Act such 
sums as may be necessary for fiscal year 2003 and for each of the 4 
succeeding fiscal years.

Summary: Public Interest Lawyer Assistance and Relief Act - Directs the Secretary of Education to carry out a student loan forgiveness program for any borrower who agrees to complete three years of service as a public interest lawyer.

Directs the Secretary, under such program, to: (1) repay up to $20,000 of such borrower's obligation on a loan made, insured, or guaranteed under part B (Federal Family Education Loan Program) or D (Federal Perkins Loans) of title IV (Student Assistance) of the Higher Education Act of 1965 (HEA); and (2) provide for deferment of repayment of such loans by such borrower while employed as a public interest lawyer.

Excludes from such program Federal PLUS loans (to parents) and Federal consolidation loans under part B or comparable loans made under part D. Allows certain amounts under consolidation loans to qualify for such program.

Treats an individual as serving as a public interest lawyer eligible to apply for such program after completion of a year of service as a practicing attorney in: (1) local, State, or Federal government; (2) a tax-exempt organization; or (3) a judicial clerkship.

Provides such loan repayment on a first-come, first-serve basis, and subject to the availability of appropriations and to any limitations imposed by the Secretary. Directs the Secretary to create or designate an administering entity for such program within the Department of Education.