Understanding NYU and UVA LRAPs

[kfischm1]

Am I understanding this right? Under NYU's program, I could earn up to $80,000 per year and not have to make loan payments if working in qualified employment, and with UVA full support would only be if I earn less than $55,000, with partial assistance for salaries up to $75,000?

UVA description: For the Classes of 2013 and later, the Law School’s revised loan forgiveness program (VLFP II) helps repay the loans of graduates who earn less than $75,000 annually in public service positions. Participants in the program who earn less than $55,000 annually receive benefits covering 100 percent of their qualifying law school loans. Those earning between $55,000 and $75,000 receive benefits prorated based on income. For the Classes of 2012 and earlier, the Law School maintains its original loan forgiveness program (VLFP I).
Link for more details: http://www.law.virginia.edu/pdf/admissi ... /vlfp2.pdf

NYU description: Why has NYU integrated LRAP with the federal Public Service Loan Forgiveness Program (PSLFP) and Income Based Repayment (IBR)? The integration of NYU’s LRAP with PSLFP and IBR will allow NYU to cover a much broader income range while significantly lowering the out-of-pocket costs for the majority of our participants. For example, assume a participant’s annual income from employment for 2012 is $78,000. Under old LRAP, this would result in over $800 per month in an out-of-pocket cost for the participant contribution (this assumes an income base of approximately $52,000 in 2012 for the participant’s graduating class). However, in New LRAP, we have a fixed income base of $80,000. Given that the participant’s $78,000 qualifying income is below the $80,000 base, the participant will no longer have a participant contribution.Links for more details: --LinkRemoved--
http://www.law.nyu.edu/financialaid/lra ... /index.htm

The NYU arrangement seems too good to be true. Just want to make sure I'm not missing something.

[firstimer]

had a similar decision....based on my understanding, NYU's LRAP is significantly superior, not only because of the higher income cap and potential to cover clerkships if you go into PI directly after, but also because if you leave the program after three years, NYU will ensure that you aren't worse off by having gone through IBR / LRAP rather than the standard 10-year repayment plan.

In other words (and this is just my understanding, so I may be wrong), if you leave a PI job after X years and you are on NYU's LRAP, as long as X>3, NYU will make X years worth of 10-year repayment-schedule payments. Unlike IBR's measly payment schedule, which (because it's linked to income and not actual debt size) might not be enough to pay the interest on your debt, the 10-year repayment plan is designed so that the payments are large enough to actually pay down not only interest but also principal on your debt. This is key component of NYU's LRAP that I wasn't able to find anywhere else, and it's incredibly powerful. Look up Negative Amortization Assistance for more details.

Here's the one weakness vs. UVA (again based on my understanding): NYU's LRAP program only kicks in after you've served three years of PI / clerkships; otherwise, if you leave the program before 3 years, you have to repay all the payments that NYU made on your behalf. UVA's LRAP program is a yearly program, so if you leave PI after one year, you don't need to payback any IBR payments that the school made on your behalf.

Despite the superior nature of NYU's lrap program, I chose UVA at a significantly lower COA because in my opinion, the best LRAP program is one where you don't have to take out as much debt in the first place.