A lot of schools are coming out with new LRAPs that intertwine themselves with IBR/PSLFP, and I saw recently that CLS had (finally) posted the program they put together last year out in public. As the resident CLS PI troll, I wanted to share some details and explain the program.
One of the big advantages of CLS's LRAP is it allows graduates to choose how much risk they want to bear as they try to minimize their loan payments. Obviously, taking full advantage of IBR can be a boon, but it also puts the graduate at risk of being stuck with a higher principal years later if the graduate wants to shift out of IBR qualifying employment (anything that's not a 501(c)(3) or government) for whatever reason.
So CLS has (1) The traditional LRAP, (2) an IBR/PSLFP option for those who originally started with "traditional LRAP," and (3) an IBR/PSLFP option only available to those who select from the start. I am currently using (1) with plans of switching into (2) at a later year.
In (1), it's the same old LRAP. You pay 34 percent of your income above 50,000.
In (2), CLS calculates how much they would give you if you had to pay 34 percent of your income above 50,000 (i.e. how much they were going to give you in the original LRAP). Then, you pay your IBR payment (15 % of your income above 16,245 if you're single). If your IBR payment is smaller than how much CLS would give you, then they pay ONLY the IBR amount, and you pay 0. Otherwise, they give you the full amount you'd normally get, but you only have to pay the IBR amount, not the regular 10 year monthly payment.
In (3), it works the same way as option (2), but the benefit is calculated if you only had to pay 34 percent of your income above 71,000. Same thing holds true that CLS pays up to the entire amount of IBR payment, but no more.
So let's see how this works in two scenarios where someone took out 150K in loans. Your annual loan payment is around 21600 (1800/month)
Example 1: $75,000 Salary
1. TRADITIONAL LRAP
You pay 34 percent of your salary above 50,000. 34 percent of your salary above 50,000 is 8160.
You pay 8160. CLS pays 13440
2. LRAP IBR with 50K threshold
You calculate the benefits you'd have with a traditional LRAP (13440).
Then, you calculate your IBR payment (8813). CLS will give you the regular benefit, but NO MORE than your IBR payment.
You pay 0. CLS pays 8813.
3. LRAP IBR with 71K threshold
You calculate the benefits you'd have with a traditional LRAP IF the traditional LRAP used 71,000 instead of 50,000 as its base. With the new base, your benefits would be 21600  (75,00071,000)*.34. This number comes out 20240.
Then, you calculate your IBR payment (8813). CLS will give you the regular benefit, but NO MORE than your IBR payment.
You pay 0. CLS pays 8813.
Example 2: $95,000 Salary
1. TRADITIONAL LRAP
You pay 34 percent of your salary above 50,000. 34 percent of your salary above 50,000 is 14960.
You pay 14960. CLS pays 6640.
2. LRAP IBR with 50K threshold
You calculate the benefits you'd have with a traditional LRAP (6640).
Then, you calculate your IBR payment (11813). CLS will give you the regular benefit, but NO MORE than your IBR payment.
You pay 5173. CLS pays 6640.
3. LRAP IBR with 71K threshold
You calculate the benefits you'd have with a traditional LRAP IF the traditional LRAP used 71,000 instead of 50,000 as its base. With the new base, your benefits would be 21600  (95,00071,000)*.34. This number comes out 13440.
Then, you calculate your IBR payment (11813). CLS will give you the regular benefit, but NO MORE than your IBR payment.
You pay 0. CLS pays 11813.
For more info:
http://www.law.columbia.edu/null?&exclusive=filemgr.download&file_id=551063&rtcontentdisposition=filename%3DLRAP%20Policy.%20JD%20Classes%20Graduating%20On%20or%20After%20May%202008.%20Rev%20Dec%202010.pdf
CLS' New LRAP on Website

 Posts: 241
 Joined: Thu Oct 21, 2010 4:51 pm
Re: CLS' New LRAP on Website
thank you!! This is really helpful.
 NonChalant1
 Posts: 852
 Joined: Thu Jul 03, 2008 1:54 pm
Re: CLS' New LRAP on Website
man I really need to research IBR more. I've been so lazy about reading about its specifics on here. But this was helpful from what I could understand, thanks.