CAMBRIDGE, Mass. -- Harvard University's law school will stop offering a year of free tuition to students who go into public service law after graduation, Law School Dean Martha Minow announced recently.
Minow said in an e-mail to staff, students and faculty that the school will suspend its Public Service Initiative for future incoming classes.
The university suffered investment losses while also seeing more students than expected look for public service jobs, school officials said.
"We remain committed to this program for current students despite the economic downturn, but we are not likely to extend it to future incoming classes," Minow wrote.
Currently enrolled students remain eligible for the program, she said.
Launched in 2008, the program waived tuition for third-year law students who agreed to work in public interest law for five years after graduation. Official said the program forgave part of students' tuition during the program's first two years, and is scheduled to forgive the full $40,000 in tuition during its final two years.
It served about 80 third-year students each year, official said.
Lonnie Powers, executive director of the Massachusetts Legal Assistance Corp., which funds legal aid programs for low-income Massachusetts residents, called the suspension "another blow" for organizations that provide legal assistance.
"It's unfortunate. This decision, however understanding it might be, will affect legal aid groups," said Powers. "It was a way to get students interested in public interest law."
Powers said some Harvard Law students also might have considered public interest law because big law firms have cut back on hiring students or postponed their start dates.
According to a recent American Lawyer survey of the nation's top 200 law firms, 40 percent had reduced starting pay for their associates, and 44 percent are considering cuts next year.
Minow also announced that the school will cut per-student funding for summer public interest work but will expand loan repayment assistance for students and alumni. She said she has appointed a task force to investigate other ways the school could promote public interest law to future incoming classes.
The school's funding adjustments come after the dean of Harvard University's Faculty of Arts and Sciences announced in November that he would reduce the number of professors to help balance a $110 million deficit.
Harvard has slashed about 275 jobs and made other cost-cutting moves this year.
Harvard's largest-in-the-nation endowment shrunk nearly $11 billion in fiscal 2009 from a high of $36.9 billion.
Harvard president Drew Gilpin Faust has said that 38 percent of the Harvard budget is drawn from endowment income, so its $11 billion loss this past fiscal year had broad impact on the school's finances.