Do grants matter if you are participating in LRAP?

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calyx_of_isis
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Do grants matter if you are participating in LRAP?

Postby calyx_of_isis » Thu Jul 21, 2011 3:07 am

Hello all - I'm considering a transfer based on differences in LRAP programs, in which I'd be leaving a school at which I have some ($10k/year) grant money for a school where I'd have no grant money but access to a superior LRAP. It is my intent to do public interest work for my entire career, and I will in all likelihood take LRAP funds for the full 10 years of loan repayment. My question is: how should I weigh grant money in light of this? It seems like if I'm on a 10 year repayment schedule and LRAP is covering my loans except for the percent cut over a certain salary that they require me to pay, then the actual amount of my debt is irrelevant. If I have to pay 25% of my income over $47k toward my loans back for ten years and LRAP has the balance, what's the difference if my total debt is $150k versus $120k upon graduation? It seems like additional grant money is meaningless and there's no incentive to borrow less than the maximum. Am I missing something obvious here?

paul parker
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Re: Do grants matter if you are participating in LRAP?

Postby paul parker » Fri Jul 22, 2011 5:36 am

I have the same question. Did someone found anything?

http://www.SPAM.com

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vanwinkle
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Re: Do grants matter if you are participating in LRAP?

Postby vanwinkle » Fri Jul 22, 2011 9:03 am

paul parker wrote:I have the same question. Did someone found anything?

http://www.SPAM.com

You know, bad grammar really reflects badly on the legal services you're spamming.

--ImageRemoved--

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vanwinkle
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Re: Do grants matter if you are participating in LRAP?

Postby vanwinkle » Fri Jul 22, 2011 9:29 am

calyx_of_isis wrote:Hello all - I'm considering a transfer based on differences in LRAP programs, in which I'd be leaving a school at which I have some ($10k/year) grant money for a school where I'd have no grant money but access to a superior LRAP. It is my intent to do public interest work for my entire career, and I will in all likelihood take LRAP funds for the full 10 years of loan repayment. My question is: how should I weigh grant money in light of this? It seems like if I'm on a 10 year repayment schedule and LRAP is covering my loans except for the percent cut over a certain salary that they require me to pay, then the actual amount of my debt is irrelevant. If I have to pay 25% of my income over $47k toward my loans back for ten years and LRAP has the balance, what's the difference if my total debt is $150k versus $120k upon graduation? It seems like additional grant money is meaningless and there's no incentive to borrow less than the maximum. Am I missing something obvious here?

This is pretty much correct when the grant amount isn't large. If you're only talking about a difference between $150K and $120K, then no, that's probably not enough to change the formula. But if you're talking about a much bigger scholarship, like something that pays $30K/yr for 3 years, you could be looking at $150K vs. $60K, and that's a whole different ballgame. It's possible, even in public interest, to end up making enough money that you don't qualify for LRAP anymore since your payments are so small. This is why full rides to lower-ranked schools still matter.

However, most of this is irrelevant since a lot of schools are bringing their LRAPs in line with IBR. Basically, instead of screwy formulas like "25% over $47K", the schools require you to go into IBR (which lowers your monthly payments even without the school contributing anything) and then offer to pay part or all of your IBR payment. The disadvantage here is that IBR payments for PI/gov't jobs are often small enough that they don't even cover the interest generated each month on your debt, which means you're not paying off the capital (amount actually owed) each month. Interest accrues, though it doesn't compound, under IBR, meaning that you're still on the hook for whatever isn't being covered by your IBR paycheck.

That's hugely different from what LRAPs used to do. LRAPs would cover the entire difference of your loan payment, meaning they'd reduce your capital each month. This IBR-tracking plan is a lot cheaper for schools, but means that they're not really helping you get rid of that debt like they used to.

whatchoicetomake
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Joined: Tue Jun 14, 2011 4:11 pm

Re: Do grants matter if you are participating in LRAP?

Postby whatchoicetomake » Fri Jul 22, 2011 9:13 pm

vanwinkle wrote:
calyx_of_isis wrote:Hello all - I'm considering a transfer based on differences in LRAP programs, in which I'd be leaving a school at which I have some ($10k/year) grant money for a school where I'd have no grant money but access to a superior LRAP. It is my intent to do public interest work for my entire career, and I will in all likelihood take LRAP funds for the full 10 years of loan repayment. My question is: how should I weigh grant money in light of this? It seems like if I'm on a 10 year repayment schedule and LRAP is covering my loans except for the percent cut over a certain salary that they require me to pay, then the actual amount of my debt is irrelevant. If I have to pay 25% of my income over $47k toward my loans back for ten years and LRAP has the balance, what's the difference if my total debt is $150k versus $120k upon graduation? It seems like additional grant money is meaningless and there's no incentive to borrow less than the maximum. Am I missing something obvious here?

This is pretty much correct when the grant amount isn't large. If you're only talking about a difference between $150K and $120K, then no, that's probably not enough to change the formula. But if you're talking about a much bigger scholarship, like something that pays $30K/yr for 3 years, you could be looking at $150K vs. $60K, and that's a whole different ballgame. It's possible, even in public interest, to end up making enough money that you don't qualify for LRAP anymore since your payments are so small. This is why full rides to lower-ranked schools still matter.

However, most of this is irrelevant since a lot of schools are bringing their LRAPs in line with IBR. Basically, instead of screwy formulas like "25% over $47K", the schools require you to go into IBR (which lowers your monthly payments even without the school contributing anything) and then offer to pay part or all of your IBR payment. The disadvantage here is that IBR payments for PI/gov't jobs are often small enough that they don't even cover the interest generated each month on your debt, which means you're not paying off the capital (amount actually owed) each month. Interest accrues, though it doesn't compound, under IBR, meaning that you're still on the hook for whatever isn't being covered by your IBR paycheck.

That's hugely different from what LRAPs used to do. LRAPs would cover the entire difference of your loan payment, meaning they'd reduce your capital each month. This IBR-tracking plan is a lot cheaper for schools, but means that they're not really helping you get rid of that debt like they used to.


Thoughts on Cornell's version of LRAP http://www.lawschool.cornell.edu/admissions/tuition/upload/2010-PILIPP-info.pdf?

And from my reading, it seems you can bounce in and out of it

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El_Gallo
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Re: Do grants matter if you are participating in LRAP?

Postby El_Gallo » Fri Jul 22, 2011 9:31 pm

whatchoicetomake wrote:Thoughts on Cornell's version of LRAP http://www.lawschool.cornell.edu/admiss ... P-info.pdf?

And from my reading, it seems you can bounce in and out of it


Cornell is one of the schools that has not yet coupled its LRAP with the IBR. The advantage is that you can bounce in and out of it. However, the disadvantage is that if you do remain in PI for 10 years or more, you will end up paying a lot more than if you had gone to a school with a IBR/LRAP. Cornell, Michigan, and Duke are some schools with straight LRAP. Most of the heavy PI schools like Berkeley and NYU have IBR/LRAPs.




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