DOJ Attorney Student Loan Repayment Program

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012grad
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DOJ Attorney Student Loan Repayment Program

Postby 012grad » Fri Mar 20, 2015 4:57 pm

Does anyone have any knowledge about the DOJ Attorney Student Loan Repayment Program?

If under the program they match your payments, what would the advantage be to someone planning on working for 10 years for the public service forgiveness?

Thanks

moocow54
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Re: DOJ Attorney Student Loan Repayment Program

Postby moocow54 » Sun Mar 22, 2015 9:21 pm

Google is your friend:

http://www.justice.gov/oarm/attorney-st ... nt-program

"The Department’s policy requires a minimum aggregate loan balance of $10,000 to initially qualify. The ASLRP is intended as a supplement to the individual attorney’s loan repayment obligations, not as a substitute therefor. The Department matches payments rendered by the individual attorney, up to a maximum of $6,000. Attorneys with annual base salaries below $84,000 automatically qualify for the maximum payment without consideration of the amount they paid. However, once an attorney’s annual base salary reaches the “matching funds” threshold of $84,000, the Department considers the amount of annual loan repayments rendered by the individual when determining the ASLRP benefit. The ASLRP contemplates that attorneys will continue making personal payments toward their federal student loans while participating in the program."

"The Department has established a payment ceiling, per attorney, of up to $6,000 per calendar year, subject to a cumulative lifetime maximum of $60,000, consistent with the provisions of P.L. 108-123 (November 11, 2003). "

Basically, they'll pay a max of 6k/year, up to a lifetime total of 60k.

So if you have more in loans + 10 years interest than 60k + your payments, then the remainder will be forgiven after 10 years.

The real advantages would be (1) if you decide not to stick around for 10 years, less to pay (notwithstanding payback provisions if you break a 3 year commitment); and (2) Less of a tax bomb with the forgiveness since your total will be, in theory, 60k less.

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A. Nony Mouse
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Re: DOJ Attorney Student Loan Repayment Program

Postby A. Nony Mouse » Sun Mar 22, 2015 9:26 pm

If the forgiveness is through PSLF, there's no tax bomb.

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XxSpyKEx
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Re: DOJ Attorney Student Loan Repayment Program

Postby XxSpyKEx » Sun Mar 22, 2015 10:38 pm

moocow54 wrote:Google is your friend:

http://www.justice.gov/oarm/attorney-st ... nt-program

"The Department’s policy requires a minimum aggregate loan balance of $10,000 to initially qualify. The ASLRP is intended as a supplement to the individual attorney’s loan repayment obligations, not as a substitute therefor. The Department matches payments rendered by the individual attorney, up to a maximum of $6,000. Attorneys with annual base salaries below $84,000 automatically qualify for the maximum payment without consideration of the amount they paid. However, once an attorney’s annual base salary reaches the “matching funds” threshold of $84,000, the Department considers the amount of annual loan repayments rendered by the individual when determining the ASLRP benefit. The ASLRP contemplates that attorneys will continue making personal payments toward their federal student loans while participating in the program."

"The Department has established a payment ceiling, per attorney, of up to $6,000 per calendar year, subject to a cumulative lifetime maximum of $60,000, consistent with the provisions of P.L. 108-123 (November 11, 2003). "

Basically, they'll pay a max of 6k/year, up to a lifetime total of 60k.

So if you have more in loans + 10 years interest than 60k + your payments, then the remainder will be forgiven after 10 years.

The real advantages would be (1) if you decide not to stick around for 10 years, less to pay (notwithstanding payback provisions if you break a 3 year commitment); and (2) Less of a tax bomb with the forgiveness since your total will be, in theory, 60k less.


Well, it depends on how they apply that "matching" towards your student loans. In theory, it could cut what you pay out of pocket towards your IBR/PAYE payments in half, since ASLRP would cover the other half. But if they do something stupid like match your yearly payments as a one-time lump sum payment that's paid directly to your student servicer outside of the due dates for any of your payments, then it's probably less useful (unless you leave for private practice, in which case it would reduce your tax bomb at the end of the 20/25 years).

012grad
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Re: DOJ Attorney Student Loan Repayment Program

Postby 012grad » Mon Mar 23, 2015 10:06 am

A. Nony Mouse wrote:Well, it depends on how they apply that "matching" towards your student loans. In theory, it could cut what you pay out of pocket towards your IBR/PAYE payments in half, since ASLRP would cover the other half. But if they do something stupid like match your yearly payments as a one-time lump sum payment that's paid directly to your student servicer outside of the due dates for any of your payments, then it's probably less useful (unless you leave for private practice, in which case it would reduce your tax bomb at the end of the 20/25 years).



This is the issue that I was curious if anyone could clarify. Anyone know how these matching payments are made?

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seizmaar
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Re: DOJ Attorney Student Loan Repayment Program

Postby seizmaar » Mon Mar 23, 2015 10:46 am

i've been looking at this as well, and i believe they make the payment in the lump to your loan servicer, so it does not have the effect of halving you net amount of repayment. unfortunately...

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Re: DOJ Attorney Student Loan Repayment Program

Postby Anonymous User » Mon Mar 23, 2015 11:15 am

seizmaar wrote:i've been looking at this as well, and i believe they make the payment in the lump to your loan servicer, so it does not have the effect of halving you net amount of repayment. unfortunately...


A lot of agencies used to do lump sums but changed the process in 2014 to take advantage of PSLFP. Hopefully DOJ will follow suit soon.

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Re: DOJ Attorney Student Loan Repayment Program

Postby Anonymous User » Mon Mar 23, 2015 9:10 pm

Is there any advantage to this program over a law school-sponsored LRAP program?

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Re: DOJ Attorney Student Loan Repayment Program

Postby Anonymous User » Mon Mar 23, 2015 11:07 pm

Anonymous User wrote:Is there any advantage to this program over a law school-sponsored LRAP program?


Yes. The vast majority of law school programs top out once your salary is around 80k. At DOJ, your salary will be around 90k after two years, and you will find that your LRAP benefit is minuscule to nonexistent depending on your school. At that point, the DOJ program will be useful. It makes sense to use your school's program for the first two years and then switch to the DOJ program.

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XxSpyKEx
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Re: DOJ Attorney Student Loan Repayment Program

Postby XxSpyKEx » Tue Mar 24, 2015 12:31 am

Anonymous User wrote:
Anonymous User wrote:Is there any advantage to this program over a law school-sponsored LRAP program?


Yes. The vast majority of law school programs top out once your salary is around 80k. At DOJ, your salary will be around 90k after two years, and you will find that your LRAP benefit is minuscule to nonexistent depending on your school. At that point, the DOJ program will be useful. It makes sense to use your school's program for the first two years and then switch to the DOJ program.


Well, not really, since the DOJ's payments is a one yearly lump sump payment directly to your loan servicer (based on what the above posters said). You'd pretty much use your law school's LRAP program to repay your IBR/PAYE payments for the first couple years, and ASLRP would dump a once yearly payment into your account that doesn't impact your monthly IBR/PAYE payments in any way (unless they just happen to make the payment when a bill actively pending, in which case it would count towards a total of one IBR/PAYE payment). After you're phased out of your law school LRAP, you'll be paying out of pocket for your IBR/PAYE payments, and ASLRP will dump a matching contribution (at best) once a year. It's kind of a worthless repayment program if you do IBR/PAYE and wind up sticking around for 10 years, where you could use PSLF (since the remaining money would have been forgiven anyways). Only way it seems like it would be useful is if you were either to leave for private practice in fewer than 10 years, or if you were on the standard 10 year repayment plan (since it would knock your principal down $6k each year that you qualified for ASLRP). Obviously, if you do IBR/PAYE, it makes sense to take the matching from the DOJ, since it could become useful if you decide you don't want to stick around in PI for 10 years.

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Re: DOJ Attorney Student Loan Repayment Program

Postby Anonymous User » Tue Mar 24, 2015 3:25 am

XxSpyKEx wrote:
Anonymous User wrote:
Anonymous User wrote:Is there any advantage to this program over a law school-sponsored LRAP program?


Yes. The vast majority of law school programs top out once your salary is around 80k. At DOJ, your salary will be around 90k after two years, and you will find that your LRAP benefit is minuscule to nonexistent depending on your school. At that point, the DOJ program will be useful. It makes sense to use your school's program for the first two years and then switch to the DOJ program.


Well, not really, since the DOJ's payments is a one yearly lump sump payment directly to your loan servicer (based on what the above posters said). You'd pretty much use your law school's LRAP program to repay your IBR/PAYE payments for the first couple years, and ASLRP would dump a once yearly payment into your account that doesn't impact your monthly IBR/PAYE payments in any way (unless they just happen to make the payment when a bill actively pending, in which case it would count towards a total of one IBR/PAYE payment). After you're phased out of your law school LRAP, you'll be paying out of pocket for your IBR/PAYE payments, and ASLRP will dump a matching contribution (at best) once a year. It's kind of a worthless repayment program if you do IBR/PAYE and wind up sticking around for 10 years, where you could use PSLF (since the remaining money would have been forgiven anyways). Only way it seems like it would be useful is if you were either to leave for private practice in fewer than 10 years, or if you were on the standard 10 year repayment plan (since it would knock your principal down $6k each year that you qualified for ASLRP). Obviously, if you do IBR/PAYE, it makes sense to take the matching from the DOJ, since it could become useful if you decide you don't want to stick around in PI for 10 years.


Completely true. Although with many agencies recently changing their programs to distribute the lump sum over the course of a year so that their attorneys get more of a benefit through PSLFP, I'd be surprised if DOJ doesn't match them soon. And of course, for anyone who works at DOJ who wants to use this program, you should let the people running it or the union that negotiated it know about the PSLFP problem. At my agency (SEC) it was fixed in January after a bunch of people complained to the union.




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