LRAP's Compared

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 2:25 pm

awesome lex! thanks for covering the clerkship thing

aryncita
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Re: LRAP's Compared

Postby aryncita » Fri Feb 27, 2009 2:27 pm

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Last edited by aryncita on Fri Aug 20, 2010 5:47 pm, edited 1 time in total.

airefresco
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Re: LRAP's Compared

Postby airefresco » Fri Feb 27, 2009 2:28 pm

rabbit9198 wrote:
airefresco wrote:What never gets said, of course, is that Harvard's LIPP is the most flexible in terms of qualifying employment. To me, that is its real appeal.


For HLS, employment still has to be law-related, though. Yale is even more flexible - you can, as one oft-quoted example says, "go be a bartender in the Caribbean and still get your loans paid." In other words, ANY job counts...


For HLS only private-sector employment must be law-related, but your point about Yale being even more flexible is conceded.

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 2:34 pm

aryncita wrote:
doyleoil wrote: also, you're right, the hypotheticals above make the simplistic assumption that you have basically no assets - clearly that's less applicable to a non-trad - assets and spouses muck this whole thing up and make certain schools better for some people than others - harvard is somewhat generous in "protecting" a modest amount of assets from being included in lrap - chicago doesn't take assets into account at all, as far as i can tell


Yeah, do you think there is any possibility of adding another scenario where a person has some assets and/or a working spouse? Everyone pans Chicago's LRAP, but when I was choosing schools last year, it was far and away the best deal for me since it didn't consider assets or spousal income at all. (My husband's salary plus our house and retirement plans made me ineligible for the LRAPs at most other schools.) Even if your scenarios are the best for someone who just finished law school, a lot of people are going to want to think about getting married/buying a house/saving for retirement before the LRAP period ends, and it would be useful to know how that affects one's eligibility.

If you have time, of course. I'm sure that collecting all this information is a big enough headache as it is, and my recollection is that schools often have very convoluted formulas for handling assets/spousal income, so I can understand if you don't want to take the time to figure it out. (Even then, it might be worthwhile to make a note for each school saying whether they consider spousal income/assets and if there is any sort of exemption... Chicago's LRAP suddenly looks significantly better when you take that into account. But as I said, only if you have time. This is very useful information, and thanks so much for doing this!


all great points - i'm going to make this sound as insincere as i can ( :D ): i wish i had the desire to line up another set of hypotheticals for married folks with money - but if anyone's willing to try to come up with a few, that would be awesome for a lot of people, i imagine - maybe, when i'm done with the t10, and i'm bored on a sunday, i'll try to come up with something - it might be awhile before that happens though - haha

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chris0805
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Re: LRAP's Compared

Postby chris0805 » Fri Feb 27, 2009 2:40 pm

Hey Doyle,

No probs! I think you've got the Columbia info wrong though - they calculate adjusted gross income before taxes, not adjusted net income after taxes. This means that you should be using the gross salaries before taxes, which brings Columbia's LRAP back down into the realm of the ordinary. Also - keep in mind for AGI you would have to include either the standard deduction or possibly more depending on contributions to 401ks and/or payment of student loans. I don't actually know how student loan interested deductions work if you have LRAP paying them back, but in any case, Columbia's expected contributions are much higher than what you've got listed.

I'll get working on Stanford's next...

edited to add: here's a great calculator to estimate your AGI:
http://money.cnn.com/tmp/networth2.html


Wait, do ANY programs calculate your income after taxes. I assumed all programs calculate your pre-tax AGI as your income.

Also,

Yeah, do you think there is any possibility of adding another scenario where a person has some assets and/or a working spouse? Everyone pans Chicago's LRAP, but when I was choosing schools last year, it was far and away the best deal for me since it didn't consider assets or spousal income at all. (My husband's salary plus our house and retirement plans made me ineligible for the LRAPs at most other schools.) Even if your scenarios are the best for someone who just finished law school, a lot of people are going to want to think about getting married/buying a house/saving for retirement before the LRAP period ends, and it would be useful to know how that affects one's eligibility.


Unless your spouse is pulling 100K+, then it probably won't affect your LRAP that much. Schools that factor in your spousal income take your income or the average. For example, if you make 50K at CLS, you pay 0. If you make 50K and your husband makes 90K, your income is 70K and you pay 6.8K a year. Assuming you have close to full tuition loan payments (around 20K a year), that's still a significantly better deal than UC. If, however, your spouse is making some serious cash then, yes, most LRAPs will be worse than Chicago's.

Also, some schools do not have an assets test (I know at least that CLS' doesn't), and those who do have one calculate a home as its net worth minus your mortgage. So... if you spend 30K on a down payment but have 500K (approximate number) left to pay (over the course of 30 years with interest). You have a 300K house, but you actually have -170K in assets. That's at least how the guy at NYU explained it to me 2 years ago. Seeing as how, during the early years of a mortgage you're not paying that much down on your principle, I can't imagine it would greatly affect your LRAP situation, even if you bought a house 1-2 years after graduation.

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 2:45 pm

chris0805 wrote:
Wait, do ANY programs calculate your income after taxes. I assumed all programs calculate your pre-tax AGI as your income.



i think this is right - the wording on some schools' stuff says "gross" and others says "adjusted gross" and my head was spinning from all the math and irs terminology yesterday so i screwed up columbia at first - but i think we're back on track

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zabagabe
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Re: LRAP's Compared

Postby zabagabe » Fri Feb 27, 2009 2:47 pm

OK, Stanford, whose formula is more of a pain in the butt than Yale's and doesn't fall into the 60/75/85 categories we're using, is below. It appears they've answered our question about LRAP and taxation of interest - the interest IS tax deductible, but LRAP won't allow you to include that deduction for purposes of your AGI (at least Stanford).

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.

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 2:51 pm

quick question on stanford - why does the 60k hypothetical come out at 35,500 instead of 40,500?

edit: nvmind, either you changed it or i'm blind

(also, way to round out t6 zab! hysccn down, mvpb to go)

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zabagabe
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Re: LRAP's Compared

Postby zabagabe » Fri Feb 27, 2009 2:58 pm

doyleoil wrote:quick question on stanford - why does the 60k hypothetical come out at 35,500 instead of 40,500?

edit: nvmind, either you changed it or i'm blind

(also, way to round out t6 zab! hysccn down, mvpb to go)


Yeah, sorry, I had to go back and fix the fact that grad debt is included! :)

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JackieTreehorn
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Re: LRAP's Compared

Postby JackieTreehorn » Fri Feb 27, 2009 3:11 pm

The $5,000 in other grad debt payment you've included--is this a yearly figure for debt wholly unrelated to law school (undergrad, some other degree)?

Pumpkin
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Re: LRAP's Compared

Postby Pumpkin » Fri Feb 27, 2009 3:14 pm

so, short of going into the whole if you're married set of considerations, is there a school that stands out as being better in protecting assets from previous work? or allowing you to save for things like houses? Harvard?

And having the loosest rules about spouses, time off for kids, etc? (for those of us who want to be married before we are 40- which is when I will be done with debt- UH!)

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 3:30 pm

JackieTreehorn wrote:The $5,000 in other grad debt payment you've included--is this a yearly figure for debt wholly unrelated to law school (undergrad, some other degree)?


yes, it's based on my own projected individual situation - but i figure it probably applies to a lot of people because i imagine a lot of people have prior educational debt - note that my debt is graduate school debt, which does not get included in any way in MOST programs (NYU lets you deduct it from your expected contribution, and stanford appears to cover it with their lrap) - if you have undergraduate debt, up to 30,000 can be covered by both harvard and yale's lrap's

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 3:40 pm

berkeley is up

legends159
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Re: LRAP's Compared

Postby legends159 » Fri Feb 27, 2009 3:45 pm

doyleoil wrote:berkeley is up


thanks a lot. Very interesting numbers. Hopefully they don't change with the recession

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 3:47 pm

legends159 wrote:
doyleoil wrote:berkeley is up


thanks a lot. Very interesting numbers. Hopefully they don't change with the recession


yeah hopefully not - it's a good program, while it lasts - just beware their $100k cap on total award

aryncita
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Re: LRAP's Compared

Postby aryncita » Fri Feb 27, 2009 3:58 pm

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Last edited by aryncita on Fri Aug 20, 2010 5:46 pm, edited 1 time in total.

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rabbit9198
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Re: LRAP's Compared

Postby rabbit9198 » Fri Feb 27, 2009 5:45 pm

airefresco wrote:
rabbit9198 wrote:
airefresco wrote:What never gets said, of course, is that Harvard's LIPP is the most flexible in terms of qualifying employment. To me, that is its real appeal.


For HLS, employment still has to be law-related, though. Yale is even more flexible - you can, as one oft-quoted example says, "go be a bartender in the Caribbean and still get your loans paid." In other words, ANY job counts...


For HLS only private-sector employment must be law-related, but your point about Yale being even more flexible is conceded.


Yeah, sorry - I should have been more clear about that.

zabagabe wrote:
rabbit9198 wrote:
zabagabe wrote:
*Unclear if grad debt is counted at all. Need to clarify this with them. I'm assuming, for now, that it's not.

So yeah...Yale's COAP is pretty freakin' amazing.


For Yale, Joint Degrees: For students in joint degree programs, loans for Yale Law School will be covered as described above. Some loans awarded while enrolled in another school or department at Yale University may also be covered. A maximum of three years of the joint degree, including the Law School portion, will be covered.


I don't think this is right. I think Doyle's posing a scenario in which you bring already-completed graduate debt with you to Yale. I just spoke to them on the phone, and that debt does not count toward COAP.


Again, sorry - didn't mean to be misleading (I know his personal calcs are based on non-joint-degree grad debt). Just adding more info that's slightly non-sequitur.

00TREX00
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Re: LRAP's Compared

Postby 00TREX00 » Fri Feb 27, 2009 7:16 pm

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Last edited by 00TREX00 on Thu Aug 01, 2013 8:38 pm, edited 1 time in total.

aryncita
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Re: LRAP's Compared

Postby aryncita » Fri Feb 27, 2009 7:35 pm

Here is some what I have been able to find out about how various schools handle spousal income/assets:

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 aryncita on Fri Aug 20, 2010 5:46 pm, edited 1 time in total.

aryncita
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Re: LRAP's Compared

Postby aryncita » Fri Feb 27, 2009 7:37 pm

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Last edited by aryncita on Fri Aug 20, 2010 5:44 pm, edited 1 time in total.

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 7:38 pm

aryncita wrote:It's also worth noting that most schools will reduce the required LRAP payments if one's spouse has educational debt or if one has children... The exact formula varies from school to school, but it was pretty consistent among all the schools I looked at, so I didn't bother to post that information...


aryn - this is all GREAT info - thanks so much for doing that!

edit: just saw your note....i'm putting this in the first post as a separate section
Last edited by doyleoil on Fri Feb 27, 2009 7:44 pm, edited 1 time in total.

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 7:41 pm

00TREX00 wrote:Here's a question: Are LRAP programs really that entrenched? What exactly are they funded by, the law school's endowment? I'm really worried about the law school getting in financial trouble and halting the program, thus hanging me out to dry.


probably a good question to direct to the specific school you're thinking about - duke shelters themselves by saying on their website that in case their funding is low in any given year, they'll scale back lrap payments appropriately - penn does essentially the same thing, talking about a "first come, first served" policy (can provide the links for the above two if you're interested) - harvard, yale, stanford, chicago, columbia, nyu, and berkeley don't seem to have any misgivings in their published materials about their ability to fund people from year to year - but again, i wouldn't take that as gospel and would definitely ask

00TREX00
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Re: LRAP's Compared

Postby 00TREX00 » Fri Feb 27, 2009 9:19 pm

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Last edited by 00TREX00 on Thu Aug 01, 2013 8:37 pm, edited 1 time in total.

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doyleoil
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Re: LRAP's Compared

Postby doyleoil » Fri Feb 27, 2009 9:25 pm

00TREX00 wrote:
Thanks for the info - I'm already at Columbia, so its more or less a moot point, but I'm just worrying that skipping OCI this upcoming August might end up really screwing me. Definitely wish I was on top of it and had done the research before like you're doing now. I will go and harass them about it - thanks again.


oh my bad dude - i should check tls profiles more - you're at cls, though...isn't that like biglaw paradise, even when the economy sucks?

i'll be interested to hear what you find out, tho

sbalive
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Re: LRAP's Compared

Postby sbalive » Sat Feb 28, 2009 1:24 am

00TREX00 wrote:Here's a question: Are LRAP programs really that entrenched? What exactly are they funded by, the law school's endowment? I'm really worried about the law school getting in financial trouble and halting the program, thus hanging me out to dry.


Columbia, like most schools, is down, although a little less than most - around 15% or so - but depends less on its endowment for its operating budget than Yale (which is like 44% dependent) and Harvard (around 25%?). Of course, Harvard is by far the most screwed, facing margin calls that it can't meet because of serious liquidity problems. Good times.




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