LRAP's Compared (New)

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
User avatar
Shlonster
Posts: 155
Joined: Sun Oct 11, 2009 5:04 pm

LRAP's Compared (New)

Postby Shlonster » Sat Apr 17, 2010 2:41 pm

This needs updating, and the original poster doesn't hang out anymore so I've just started a new one. All credit can go to him, we just need to be able to update it. There should be some people out there working on the updates, hopefully this will get the ball rolling. PM me the updates when they're done (UVA, harvard, columbia, anything else) and I'll add them in. You do the maths.

Link to the original so you can catch up on the discussion:

http://www.top-law-schools.com/forums/viewtopic.php?f=15&t=62094

doyleoil wrote:This thread is intended to be a place to compare the various LRAP programs at top schools. For now, I've only done three schools, but I intend eventually to round out the "traditional" top ten (Yale, Harvard, Stanford, Columbia, Chicago, NYU, Michigan, Berkeley, Virginia, Penn). If anyone is interested in giving a hand on this project, pm me and we'll go from there. For each school I've provided a set of answers to pertinent questions and a few hypotheticals based on my own situation (single student with some prior grad school debt). This information is not exhaustive. There are many variables that affect the various LRAP programs. I still recommend people do the "heavy-lifting" of wading through all the details on websites and calling to ask for extra information. And if anyone who is at a particular school represented here finds inaccurate information, I would ask that you let me know ASAP. I think I've done a pretty good job, but, as always, a person can miss something. Also, thanks to lex talionis, we have separate information on how schools deal with students during their clerkship years. That will follow the data/hypotheticals list. And thanks to aryncita, we also have some extra information on how schools handle spouses and assets. I've posted that information at the end of this post. So here goes (it's rather long...sorry :(...also, I have it in a Word document, in which the formatting looks MUCH better...if you'd like to see that, pm me):

For each school, the following is provided:

A) Pertinent data about LRAP’s:
1) What jobs qualify for LRAP coverage?
2) How long do you have to stay in this type of employment?
3) What type of repayment schedule is standard?
4) How much will I be expected to contribute?
5) Is there a yearly or total cap on what the LRAP will cover?
6) Is there a cost-of-living/raise adjustment?
7) What loans are covered by LRAP benefits?
8) Do payments on previous loans or other costs reduce my “expected contribution”?

B) Three hypotheticals (What is my take-home income under this plan?)
1) $60,000 salary, $5,000 in other grad debt payment, 30% total tax burden
2) $75,000 salary, $5,000 in other grad debt payment, 30% total tax burden
3) $85,000 salary, $5,000 in other grad debt payment, 30% total tax burden (I realize the tax assumption is a bit simplistic, but for the sake of comparison, it was easier to do it this way)



NYU (LRAP):

A. Pertinent data

a. Legal jobs in federal, state, and local “government units” and 501(c)(3)
b. 3 years, otherwise the LRAP money you received in the first 3 years must be repaid (10 years to receive full benefits)
c. 10 year repayment schedule (monthly benefits will be granted based on this schedule or actual payments, whichever is less)
d. At $47,600 and below (gross, not adjusted gross, income), you contribute nothing; from $47,600-$67,600, you contribute
40% of the income above $47,600; from $67,600-$77,600, you contribute 50% of the income above $67,600 (plus the 40% of
income between $47,600 and $67,600)
e. There is no yearly or total cap on what LRAP will cover over 10 years
f. There is a “raise adjustment”: at 4, and 7, years from graduation, the income threshold will adjust upwards to reflect standard
gov’t/pi job raises
g. All law school loans up to “cost of attendance” for 3 years are covered by LRAP benefits (minus any summer income over
$15,000 during a summer, minus any scholarships received, minus the expected student contribution); an extra $10,000 in
bar loans can be covered
h. Payments on undergraduate and graduate school loans will reduce the “expected contribution” figure from (d) by up to a
maximum of $5,000

B. Hypotheticals

a. $60,000 salary

i. Expected contribution to law school loan repayment
1. 60,000-47,600 = 12,400
2. 12,400*.4 = approx. 5,000
3. 5,000 expected contribution – 5,000 grad school loan payments for the year = $0 expected contribution

ii. Take-home income
1. 60,000 – 18,000 tax = 42,000
2. 42,000 – 5,000 grad school debt payment = 37,000
3. $37,000 take-home income

b. $75,000 salary

i. Expected contribution to law school loan repayment
1. 75,000 – 67,600 = 7,400
2. 7,400*.5 = 3,700
3. 3,700 + 8,000 = 11,700
4. 11,700 – 5,000 = 6,700

ii. Take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – 6,700 = 45,800
3. 45,800 – 5,000 = 40,800
4. $40,800 take-home income

c. $85,000 salary

i. Expected contribution to law school loan repayment
1. No eligibility for LRAP
2. Assume 180k in debt, on a 10-year repayment schedule, at 6.8% interest
3. Total payment for the year: $24,860

ii. Take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – 24,860 = 34,640
3. $34,640 take-home income





Columbia (LRAP)

A. Pertinent Data

a. Legal jobs in federal, state, and local “government units” and 501(c)(3)
b. 5 years without having to repay any previously awarded benefits (at 1-3 years, 100% must be repaid; at 3-4 years 67% must
be repaid; at 4-5 years 33% must be repaid)
c. 10 year repayment schedule (monthly benefits based on this schedule or actual payments, whichever is less)
d. At $50,000 adjusted gross income and below, nothing; above $50,000 AGI, a participant contributes 34.5% of the income
above $50,000
e. There is no yearly or total cap on what LRAP will cover over 10 years
f. There is no “raise” adjustment; the figure in (d) is static
g. All law school loans up to “cost of attendance” for 3 years are covered (minus scholarships, minus expected student
contribution, minus any budget adjustments); bar loans cannot be covered
h. The policy specifically states that undergraduate school debt payments can be subtracted from the adjusted gross income
before the “expected contribution” is calculated, however there is nothing in the policy about graduate school debt payments
(need to call)

B. Hypotheticals

a. $60,000 salary

i. Expected law school loan contribution
1. 60,000 - 50,000 = 10,000
2. 10,000*.345 = 3450
3. $3,450 expected contribution

ii. Take-home income
1. 60,000 – 18,000 = 42,000
2. 42,000 – 5,000 = 37,000
3. 37,000 - 3450 = 33,550
3. $33,550 take-home income

b. $75,000 salary

i. Expected law school loan contribution
1. 75,000 - 50,000 = 25,000
2. 25,000*.345 = 8625
3. $8,625 expected contribution

ii. Take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – 8625 – 5,000 = $38,875
3. $38,875 take-home income

c. $85,000 salary

i. Expected law school loan contribution
1. 85,000 - 50,000 = 35,000
2. 35,000*.345 = 12,075
3. $12,075 expected contribution

ii. Take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – 12,075 – 5,000 = 42,425
3. $42,425 take-home income



Harvard (LIPP)

A. Pertinent Data

a. Any government, non-profit, or academic job in the U.S. or overseas; Also any full-time, “law related” job in the private sector
b. No minimum length requirement (loans are made yearly, and forgiven as long as employment is maintained for the year for
which they are made; clerkships and self-employment have varying guidelines)
c. 10 year repayment schedule (allowance for expedited payment [not less than 10 years] of loans that have been scheduled for
longer repayment periods)
d. At $42,000 gross income or less, participant contributes nothing; between $42,001-48,000, participant contributes 20% of
income over $42,000; above $48,000, participant contributes $1,200 + 40% of income over $48,000
e. There is no yearly or total cap on what LIPP will cover over 10 years (also, there is no indication, as with NYU and Columbia, of
the length of time one is eligible for LIPP awards, and I cannot find in the stated policies whether a person might be eligible
beyond 10 years)
f. No “raise adjustment”
g. All law school loans up to “cost of attendance” are included (minus the expected student contribution minus any Harvard
grants); $3,000 in computer-expense loans can be covered; $10,000 in bar-related loans can be covered; $30,000 in
undergraduate loans or eligible [Harvard-only] joint-degree graduate program loans
h. Prior graduate school loans are not included and do not affect calculation of the “gross income”

B. Hypotheticals

a. $60,000 salary

i. Expected law school loan contribution
1. 60,000 – 48,000 = 12,000
2. 12,000*.4 = 4,800
3. 4,800 + 1,200 = 6,000

ii. Take-home income
1. 60,000 – 18,000 = 42,000
2. 42,000 – 6,000 – 5,000 = 31,000
3. $31,000 take-home income

b. $75,000 salary

i. Expected law school loan contribution
1. 75,000 – 48,000 = 27,000
2. 27,000*.4 = 10,800
3. 10,800 + 1,200 = 12,000

ii. Take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – 12,000 – 5000 = 35,500
3. $35,500 take-home income

c. $85,000 salary

i. Expected law school loan contribution
1. 85,000 – 48,000 = 37,000
2. 37,000*.4 = 14,800
3. 14,800 + 1,200 = 16,000

ii. Take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – 16,000 – 5,000 = 38,500
3. $38,500 take-home income



CHICAGO (HPIP):

A. Pertinent data

a. Full-time legal employment working for a non-profit or government office other than a judicial clerkships (benefits are not
received during a clerkship, but a clerkship will extend the length of eligibility for HPIP benefits by one year)
b. There are no length requirements, although I assume that, to receive a year of benefits, the graduate must work for an entire
year
c. Repayment schedule does not matter
d. There is no “expected contribution.” Anyone earning under $60,000 a year is eligible for a maximum of $10,000 in loan
forgiveness for the year. For those earning $60,000-$72,000, the amount of benefit declines proportionally (though exact
details are not available on the website).
e. The maximum benefit for a year is $10,000. The total cap is $70,000. The maximum number of years a graduate is eligible
for HPIP is 8 years following graduation. This means the $10,000 benefit can be received in 7 of the 8 years following
graduation.
f. Not applicable.
g. There are not strict requirements, though by accepting the funds distributed through HPIP, the graduate agrees that they will
be used solely to fund outstanding educational debt.
h. Not applicable.

B. Hypotheticals (assuming a realistic 180k total debt, on a 10-year repayment schedule, at 6.8% interest)

a. $60,000 salary

i. Expected contribution to law school loan repayment
1. Estimated payment on 10-year schedule = $24,860
2. 24,860 – 10,000 HPIP benefit = 14,860

ii. Total take-home income
1. 60,000 – 18,000 = 42,000
2. 42,000 – 14,860 = 31,285
3. $27,140 take-home income

b. $75,000 salary

i. Expected contribution to law school loan repayment
1. Ineligible for HPIP, therefore $24,860

ii. Total take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – 24,860 = 27,640
3. $27,640 take-home income

c. $85,000 salary

i. Expected contribution to law school loan repayment
1. Ineligible for HPIP, therefore $24,860

ii. Total take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – 24,860 = 34,640
3. $34,640 take-home income


(and now we see why chicago grads "self-select" out of p.i. - ;))



YALE (COAP)

A. Pertinent Data
a. All jobs count. Yes, all jobs, private, public, and everything in between.
b. You can move in and out at any time, don't have to do a minimal number of years.
c. Loan disbursements are made every six months.
d. Up to $30,000 from undergraduate loans will also be covered.
e. Some loans for joint-degree programs may also be covered, on a case-by-case basis.
f. Up to $10,000 in bar loans will be included.
g. $60,000 is the salary threshold you must hit before you are expected to contribute.
h. After $60,000, it's 25% of income above that amount (which means it caps out at $100k).

(Someone else might need to fill more of this in - this was the best I could come up with based on the PDF I found)

B. Hypotheticals

a. $60,000 salary

i. Expected law school loan contribution
1. 60,000 – 60,000 = 0
2. 0*.25 = 0

ii. Take-home income
1. 60,000 – 18,000 = 42,000
2. 42,000 – 0 = 42,000
3. 42,000 - 5,000* = 37,000
3. $37,000 take-home income

b. $75,000 salary

i. Expected law school loan contribution
1. 75,000 – 60,000 = 15,000
2. 15,000*.25 = 3,750

ii. Take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – 3,750 = 48,750
3. 48,750 - 5,000* = 43,750
3. $43,750 take-home income

c. $85,000 salary

i. Expected law school loan contribution
1. 85,000 – 60,000 = 25,000
2. 25,000*.25 = 6,250

ii. Take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – 6,250 = 53,250
3. 53,250 - 5,000* = 48,250
3. $48,250 take-home income


STANFORD (LRAP)

A. Pertinent Data

a. Standard mix of 503c(3),(4) and (5), government and public interest, plus private employment that is at least fifty percent legal services that is pro bono type work. Note that most teaching jobs DO NOT COUNT.
b. You can move in and out at any time, don't have to do a minimal number of years. Must commence participation within 5 years, and may participate until 10 calendar years after graduation.
c. Loan disbursements are made every January.
d. **There appears to be no cap on undergraduate or graduate debt that can count! (I will double-check this - seems too good to be true)
e. Seniority adjustment ups the lower limit ($50,000) by $1,000 per year.
f. Assets above $130,000 will be included as income (for Aryncita!).
g. Up to $8,500 in bar loans will be included.
h. Income thresholds:
$50,000 is the salary threshold you must hit before you are expected to contribute.
Between $50-65k, it's 15% of the amount
Between $65k-80k, it's $2,250 (the amount at $65k) + 50% of the amount over $65k
Above $80k, it's $9,750 (those two prior amounts) + 70% of income over $80k.

(Someone else might need to fill more of this in - this was the best I could come up with based on the PDF I found)

B. Hypotheticals

a. $60,000 salary

i. Expected law school loan contribution
1. 60,000 – 50,000 = 10,000
2. 10,000*.15 = 1,500

ii. Take-home income
1. 60,000 – 18,000 = 42,000
2. 42,000 – 1,500 = 40,500
3. 40,500 - 0* = 40,500
3. $40,500 take-home income

b. $75,000 salary

i. Expected law school loan contribution
1. 75,000 – 65,000 = 10,000
2. 10,000*.5 = 5,000

ii. Take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – (5,000+2,250) = 45,250
3. 45,250 - 0* = 45,250
3. $45,250 take-home income

c. $85,000 salary

i. Expected law school loan contribution
1. 85,000 – 80,000 = 5,000
2. 5,000*.7 = 3,500

ii. Take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – (9,750 + 3,500) = 46,250
3. 46,250 - 0* = 46,250
3. $46,250 take-home income

Stanford's formula appears to really cap you out for benefits around $75k a year. Beyond that your difference in take-home is very minimal.


BERKELEY (LRAP)

thanks to: bmneely

A. Pertinent data


a.) Qualifying employment is defined as greater than half-time work for a
501(c)(3) nonprofit organization or an agency of government in law-related employment. It includes but is not limited to prosecutors, public defenders, military JAG corps, legislative staff, and administrative agency staff that make substantial use of legal skills. Non-tenure track academic positions at nonprofit educational institutions, including but not limited to clinical instructors and research fellows, can also qualify. Tenure track academic positions and positions in private firms, even if doing public service work, do not qualify.

b. and c.) The maximum length of LRAP participation is 10 years. Ten years of LRAP support will enable participants to qualify for Public Service Loan Forgiveness of Federal Direct student loans that the federal government provides to borrowers who meet the requirements of qualifying student loan payments and employment.

d.) For program participants with an annualized full-time income of $65,000 or less, the LRAP loan shall equal the amount necessary to cover all scheduled payments for eligible educational student loans during the succeeding six-month period.

For participants with full-time annualized incomes greater than $65,000,
the amount of program assistance will be prorated, with participants expected to make an imputed contribution. The imputed contribution will be equal to 35 percent of marginal income above $65,000.

e.) No.

f.) A married participant’s annualized full-time income will not be adjusted unless his or her spouse has a higher income, in which case the participant’s eligible income will be calculated based on half of the joint income of the couple.

A downward adjustment of the annualized full-time income, of $6,000 is made for one dependent and $4,000 for each additional dependent.

g.) The LRAP will provide support only for federal student loans for which
the graduate is utilizing the Income Based Repayment option. Federal
student loans include Stafford subsidized and unsubsidized, Perkins,
and Graduate PLUS loans.

h.) Payments made on previous loans do not change the expected contribution, but participants may include federal student loans they obtained prior to attending Berkeley Law and for which they are using the Income Based Repayment option. Thus, there is no cumulative loan cap for federal student loans.

B. Three Income hypotheticals
1) $60,000 salary
Expected contribution: $0
2) $75,000 salary
Expected contribution: $3,500
3) $85,000 salary
Expected contribution: $7,000
4) $100,000 salary (maximum salary)
Expected contribution: $12,250

PENN (TOLLRAP):

*After speaking on the phone with the director of TOLLRAP, I was informed that a change to the “threshold income” reported in (d) below is “imminent.” When that change goes into effect, those “threshold” salaries will all be bumped up by $10,000, so that the AGI at or below which no contribution is expected will become $45,000.

*Even given the adjusted figures in the hypotheticals below, I would most likely choose to use federal IBR rather than Penn's TOLLRAP, simply because it leaves you with a higher take-home income. To participate in IBR that forgives loans after 10 years, one must be in qualifying public-service employment for all 120 months of the program. Also, one would want to be sure that the loan forgiveness the government will provide after 10 years will not be taxable income.

A. Pertinent data

a. The job must be “law-related public interest” work, which includes employment by a non-profit, a federal, state, or local government agency, clinical law teaching jobs (if they involve advocacy on behalf of inadequately represented individuals or organizations), and private employers (including self-employment), if it can be demonstrated that 50% of the firm’s work involves provision of legal services at no fee, a reduced fee, or a court-awarded fee to individuals inadequately represented by private firms or government.
b. TOLLRAP loans are granted on a one-year basis and are forgiven after a participant demonstrates they have been in eligible employment for the year the loan was granted. TOLLRAP can be entered any time after graduation, and a participant remains eligible for TOLLRAP for up to 10 years following graduation.
c. 10-year repayment schedule.
d. At $35,000 adjusted gross income (as reported on 1040 forms), the participant contributes nothing. From $35,001-$40,000, the participant contributes 20% of income over $35,000. From $40,001-$45,000, the participant contributes $1,000 + 40% of income over $40,000. At $45,001 and over, the participant contributes $3,000 + 60% of amount over $45,000. [As mentioned above, changes in these threshold incomes appear to be “imminent.”]
e. Penn has this disclaimer about yearly awards through TOLLRAP: “The Committee retains the discretion to limit the loan amount to $12,000 for graduates whose salary and indebtedness would otherwise entitle them to a loan in excess of $12,000. This discretion is to be exercised in the event that the total amount of loans applied for in a particular year threatens to exhaust available funds.” Thus there appears to be a yearly cap at $12,000. Also, Penn’s program appears to be slanted to favor public interest, rather than government, employment. The policies also state that “50% of the funds available for the Program shall be reserved for…employment by non-profit organizations…” Finally funds are awarded “on a first-come, first-served basis.”
f. There is no “raise” adjustment. The salary threshold figure in (d) is static.
g. For graduates whose salaries fall below the $35,000 threshold salary, both undergraduate and law school loans are included. For all other graduates, only law school loans are included.
h. Other loans are not figured into the program in any way.

B. Hypotheticals (I have done two sets of figures for Penn, one with the old, and one with the apparently new threshold income. The “new” threshold numbers are in brackets.)

a. $60,000 salary
i. Expected law school loan contribution
1. 60,000 – 45,000 = 15,000 [60,000 – 55,000 = 5,000]
2. 15,000*.6 = 9,000 [5,000*.6 = 3,000]
3. 9,000 + 3,000 = 12,000 [3,000 + 3,000 = 6,000]
4. $12,000 expected contr. [$6,000 expected contr.]

ii. Take-home income
1. 60,000 – 18,000 = 42,000 [SAME]
2. 42k – 12k – 5k = 25k [42k – 6k – 5k = 31k]
3. $25,000 take-home inc. [$31,000 take-home income]

b. $75,000 salary
i. Expected law school loan contribution
1. 75,000 – 45,000 = 30,000 [75,000 – 55,000 = 20,000]
2. 30,000*.6 = 18,000 [20,000*.6 = 12,000]
3. 18,000 + 3,000 = 21,000 [12,000 + 3,000 = 15,000]
4. $21,000 expected contr. [15,000 expected contr.]
5. Note the expected contribution is so high that you would have to have a substantial amount of debt to receive any benefit from TOLLRAP at this point.

ii. Take-home income
1. 75,000 – 22,500 = 52,500
2. 52.5k – 21k – 5k = 26.5k [52.5k – 15k – 5k = 32.5k]
3. $26,500 take-home income [$32,500 take-home income]

c. $85,000 salary (expect no benefit from TOLLRAP – compare to take-home figures listed for NYU under $85,000 salary)


MICHIGAN (LRAP):

A. Pertinent data

a. The program appears to be entirely income-based and stipulates only that the graduate be working “full-time in a law-related occupation,” with judicial clerks being ineligible.
b. Funds are disbursed annually, and there is no indication on the website of the length of time after graduation that a graduate remains eligible to participate in LRAP.
c. 10-year repayment.
d. Michigan calculates an “annual available income” (AAI), using a formula that takes into account income, assets, and deductions for prior educational debt and childcare costs. The formula is not made transparent on the website, so it is difficult to tell how much having assets hurts you under this program. At an AAI of $36,000 and below, the graduate contributes nothing. At $36,001 and above, the graduate contributes 35% of income over $36,000. [For purposes of the hypotheticals below, I am going to assume that the $5,000 I would pay annually in graduate school debt will be deducted, so that with $60,000 in adjusted gross income, the AAI figure would be $55,000.]
e. The website does not stipulate a yearly or total cap on LRAP benefits received.
f. There is no “raise adjustment” to the figures listed in (d).
g. Covered loans include Michigan law school loans and up to $8,000 in bar loans.
h. Graduate debt can be deducted from the “annual available income.”

B. Hypotheticals

a. $60,000 salary
i. Expected law school loan contribution
1. 55,000 – 36,000 = 19,000
2. 19,000*.35 = 6,650
3. $6,650 expected contribution

ii. Total take-home income
1. 60,000 – 18,000 = 42,000
2. 42,000 – 6,650 – 5,000 = 30,350
3. $30,350 take-home income

b. $75,000 salary
i. Expected law school loan contribution
1. 70,000 – 36,000 = 34,000
2. 34,000*.35 = 11,900
3. $11,900 expected contribution

ii. Total take-home income
1. 75,000 – 22,500 = 52,500
2. 52,500 – 11,900 – 5,000 = 35,600
3. $35,600 take-home income

c. $85,000 salary
i. Expected law school loan contribution
1. 80,000 – 36,000 = 44,000
2. 44,000*.35 = 15,400
3. $15,400 expected contribution

ii. Total take-home income
1. 85,000 – 25,500 = 59,500
2. 59,500 – 15,400 – 5,000 = 39,100
3. $39,100 take-home income


UVA (VLFP II):

Thanks to Doritos for getting the updated info

A. Pertinent data

a. Qualifying employment includes...gubmint work, legal aid offices, prosecutor offices, public interest groups, career judicial clerkships (ones that last longer than 2 years), legal reform groups that qualify as non-profit by IRS . Clerkships lasting less than 2 years are not eligible and neither are firm deferrals. To qualify you must take a qualifying job within 2 years of graduating (or within 2 years of a judicial clerkship that does not exceed 2 years in length). Lastly, part time work is eligible (i.e. if someone is working half time they are eligible for half of benefits)
b. Basically you are enrolled in IBR and based on how much money you make UVa pays all or a portion of what you owe on a year to year basis. One does not have to make a long term commitment to the LRAP, you can do it one year and not do it the next (except you can't re-enter it unless you got an approved deferral).
c. One can stay in the LRAP for up to 10 years, (You must also place your loans into IBR to be eligible). This is only applicable to the class of 2013 and later...older classes are stuck with UVa's old LRAP, unless switch is approved. (Applications to switch to VLFP II are due in November, final decision made by program director)
d. If one is making 55k or less annually they contribute nothing toward loans, discounted payments between 55k and 75k
e. Will not pay more than the amount mandated by IBR (15%)
f. Is there a cost-of-living/raise adjustment? Not sure – there wasn’t for VLFP I.
h. Private loans not eligible.
i. Virginia calculates a program-adjusted income (PAI) that does not have any kind of “asset test” and that averages spouses’ income (deducting any graduate educational debt from the non-participating spouse’s income). For a single student, it appears the “adjusted gross income” from the 1040 is used, though the website does not specify.
***************************************************************************
B. Hypotheticals

The documentation doesn't clearly outline how your payments change as you move from 55k to 75k, except to say that your payments increase "proportionally to your income". If anyone has more info on that do the maths and pm it to me, and I'll slap it in here.

***************************************************************************

NORTHWESTERN (Public Service Fellowship Program)

A) Pertinent data about LRAP:

a) attorneys or managers in any government or non-profit agency
b) Loans are made at the beginning of a one-year period and forgiven if qualifying employment and all conditions are met for that same one-year period. Graduates may participate in the program for up to ten years.
c) The amount of assistance is based on the gross income and the amount of indebtedness. The calculations adjust the participant’s income downward to reflect undergrad loans and a dependant allowance of $5,000 per child.
d) Income Level (AGI) / % of Income Applicant is Expected to Contribute (per year)
$0-$30,000 / 0%
$30,001-$40,000 / 6%
$40,001-$50,000 / 7%
$50,001-$60,000 / 8%
e) Yearly cap presently $13,000.
f) COA not mentioned.
g) The types of loans covered at not mentioned on the website.
h) Yes, see (c).

B) Hypotheticals

a) 60,000 salary
i. Expected law school loan contribution
1. 60,000 - 5,000 = 55,000
2. 8% of 55,000 = 4,400
3. 4,400 expected contribution

ii. Take-home income
1. 60,000 * .3 = 18,000
2. 60 – 5 – 18 – 4.4 = $32,600
3. Take-home income $32,600

Unless you have kids or a lot of undergrad debt, it looks like you will phase out of NU’s LRAP program pretty quickly (the hypothetical of a $75,000 salary, for example, would not get refunded in doyle's situation, so I stopped at $60,000). Yikes. I didn't see anything about assets counting toward your income level or not. I'm going to visit in April and I will ask for more information and update this post if I learn anything useful.


FEDERAL INCOME-BASED REPAYMENT

A. Pertinent Data

a. There are two tracks: 10-year and 25-year. Each provides loan forgiveness at the end of the term of the loan. The 10-year program provides forgiveness at the end of 10 years provided the graduate maintains eligible employment (in government, 501(c)(3) and other organizations and types of employment listed here: http://www.finaid.org/loans/ibr.phtml ) during all 120 payments that are made. There is some controversy other whether the “120 payments” refers to 120 consecutive payments (so that if eligible employment is interrupted for any reason, one has to “start over” and make another 120 payments) or 120 total payments (so that if eligible employment is interrupted for any reason one could resume payments where one left off).
b. The 25-year track is entirely income-based and has no stipulations on the type of employment that must be maintained.
c. Under each plan the payment is adjusted so as to be “affordable” (based on a formula that calculates 15% of the difference between the graduate’s adjusted gross income and the federal poverty line) to the graduate.
d. Interest accrues at the rate of the loan but is forgiven, along with principal, at the end of the term of the loan.
e. There is some uncertainty about the taxability of the loan forgiveness that is ultimately provided. This should be an important consideration for anyone choosing to utilize IBR. It should be noted, however, that although the amount of forgiveness at the end of the term of the loan may seem substantial presently, its “net present value” is nowhere near the final total, due to inflation.
f. The principal drawback I see to choosing to use IBR is that the interest that accumulates is not forgiven along the way, nor is principal reduced, because the loan forgiveness is “back-end” loan forgiveness, unlike a traditional LRAP that makes payments along the way. That means if a graduate eventually chooses to take a much higher-paying position, the cost of the loan could increase. There is a helpful calculator on the above website that can help you calculate various scenarios, to see which provides the highest-cost loan.
g. All Stafford, GRADPlus, and consolidation loans are eligible for forgiveness. ParentPlus loans and Perkins loans are not eligible, however if a Perkins loan is included in a consolidation loan, it becomes eligible.

B. Hypotheticals

a. $60,000 salary
i. 60,000 – 18,000 – 6,660 (expected loan payment) = 35,340
ii. $35,340 take-home income

b. $75,000 salary
i. 75,000 – 22,500 – 8,910 = 43,590
ii. $43,590 take-home income

c. $85,000 salary
i. 85,000 – 25,500 – 10,410 = 49,090
ii. $49,090 take-home income


HOW CLERKSHIPS AFFECT LRAP BENEFITS:

YLS- All clerks are eligible for COAP benefits.

HLS- "Graduates who take clerkships and intend to take a LIPP-qualifying position after the clerkship is completed are eligible for LIPP assistance under certain provisions."

CLS- "Graduates undertaking judicial clerkships may be eligible for LRAP benefits during their clerkship year(s) under the same terms as participants in other qualifying employment. However, LRAP loans made for clerkship periods are not interest-free; they accrue interest at a fixed annual rate (currently 5%, deferred until repayment begins). Following the clerkship, if the graduate enters employment covered by the Program, regular benefits will continue and the interest accrued during the clerkship period will be reversed. In these instances the clerkship period is counted toward time served in qualifying employment for purposes of LRAP loan forgiveness. If the graduate follows the clerkship immediately with non-qualifying employment, the LRAP loan benefits provided during the clerkship plus the accrued interest will be repayable within the next two years."

NYU- "NYU’s LRAP Program is not intended to provide benefits to graduates who choose to take judicial clerkships. The Program does make exceptions, however, for those graduates who intend to proceed to LRAP-eligible employment, as defined above, within 30 days following the end of their clerkships. Such graduates may apply to the Program for LRAP benefits, and such benefits may be paid to them for up to two consecutive years (24 months) of clerkship employment."

UChicago- "for graduates who work at a qualifying job in the year following a judicial clerkship, the graduate will receive an additional year of eligibility for HPIP benefits. Clerks can receive up to seven years of benefits within the eight-year period immediately following graduation."

Penn- "Graduates accepting clerkships before entering qualifying employment may have their TollRap eligibility extended for up to two years."

Berk- "Judicial clerkships intended to last two or more years are considered qualifying employment. Beginning with the Class of 2008, judicial clerkships of less than two years qualify if the graduate intends to pursue public interest employment immediately following the clerkship."

Mich- "Judicial Clerks are not eligible during their year(s) of clerkship."

UVA- "not eligible while clerking, but become eligible if they enter public service employment within two years of the end of the clerkship(s), so long as the clerkship is taken immediately following law school and is no longer than two years."

Cornell- "A student will qualify on a deferred basis if she engages in a post-graduate judicial clerkship or other non-qualifying employment, and subsequently engages in qualifying public interest employment."

Duke- not eligible employment

GULC- "Judicial clerkships are NOT considered to be eligible employment for LRAP. However, a graduate participating in a judicial clerkship which prevents the submission of an application within the two-year window may be granted a one-time extension until the next application deadline."

I couldn't find anything pertaining specifically to clerkships for SLS or NU.



HOW SPOUSES AND ASSETS AFFECT LRAP BENEFITS:

NYU
Spousal income: If the participant earns more than their spouse, only the participant's income is considered. If they earn less than their spouse, then they use the average of the two incomes.
Assets: A net worth of over $20k makes one ineligible for the LRAP, although it looks like qualified retirement accounts are excluded. (It doesn't say anything about home equity, though, so I assume that is counted, contrary to what was posted earlier.)

Columbia
Spousal income: If the participant earns more than their spouse, only the participant's income is considered. If they earn less than their spouse, then they use the average of the two incomes.
Assets: Not considered(?). (I didn't see anything on their web site about asset-based tests, so I assume there are none, but I won't swear to it.)

Harvard
Spousal income: If the participant earns more than their spouse, only the participant's income is considered. If they earn less than their spouse, then they use the average of the two incomes.
Assets: $10,000 is protected plus $8,000 for each year since graduation. If the participant is married, the protected amount is doubled. Anything beyond that will reduce LRAP eligibility (the amount of the reduction decreases as the number of years out of school decreases). There is no exemption for home equity or retirement accounts.

Chicago
As far as I can tell, neither spousal income nor assets are considered.

Yale
Spousal income: The spouse's income above $40,000 is added to the participant's income. (In other words, they add both spouses' income together and subtract $40,000.) The participant is required to pay 20% of the amount that this total exceeds $60,000 (compared to 25% of the total for single participants).
Assets: $6,000 is protected plus an additional $6,000 for each year since graduation. After that, a portion of assets are required to be used for loan repayment, but I couldn't find the formula. Retirement accounts are exempted, but home equity is not.

Stanford
Spousal income: If the participant earns more than their spouse, only the participant's income is considered. If they earn less than their spouse, then they use the average of the two incomes.
Assets: Any assets over $130,000 are treated as income, with no exemptions for retirement accounts or home equity.

Berkeley
Spousal income: If the participant earns more than their spouse, only the participant's income is considered. If they earn less than their spouse, then they use the average of the two incomes.
Assets: Not considered(?). (Once again, I found nothing on their web site, but I won't swear to it.)
Last edited by Shlonster on Fri Apr 23, 2010 12:45 pm, edited 3 times in total.

User avatar
Jericwithers
Posts: 2194
Joined: Tue Jul 28, 2009 9:34 pm

Re: LRAP's Compared (New)

Postby Jericwithers » Sun Apr 18, 2010 2:19 pm

Anyone doing Duke's? Not that I am volunteering or anything.....

User avatar
Shlonster
Posts: 155
Joined: Sun Oct 11, 2009 5:04 pm

Re: LRAP's Compared (New)

Postby Shlonster » Sun Apr 18, 2010 5:55 pm

Updated Virginia's.

User avatar
Doritos
Posts: 1232
Joined: Tue Nov 24, 2009 8:24 pm

Re: LRAP's Compared (New)

Postby Doritos » Mon Apr 19, 2010 12:30 am

Thanks for doing this. I'm most pleased that you preserved my spelling of "gubmint"




Return to “Financial Aid”

Who is online

Users browsing this forum: No registered users and 1 guest