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LRAP: Georgetown University Law Center

Published June 2010, last updated August 2010

Loan Repayment Assistance Program

How it Works
Georgetown University Law Center (GULC) graduates enrolled in the Loan Repayment Assistance Program (LRAP) are awarded loans to cover the difference between their expected contribution to law school loan repayment under the federal government’s income-based repayment (IBR) plan and the actual amount of the payments. These loans are awarded and subsequently forgiven every six months. Graduates must apply within two years of graduation.

Eligible Jobs
Eligible positions are full-time, paid positions in government or with a nonprofit agency. The position must prefer or require the use of a J.D.

Judicial clerkships are not eligible but you may enter LRAP after completion.

Eligible Debt
Since the LRAP requires enrollment in IBR, eligible loans must be federal loans (e.g. Stafford, GRADPlus). Law school debt is covered, as is other educational debt if that debt has been consolidated under IBR.

Calculation of Expected Participant Contribution
GULC will cover the full amount of your IBR payment if your salary is under $75,000. This is not a strict cap, as some with higher salaries may still receive pro-rated benefits.

If you are married and file jointly, IBR payments may go up because of your spouse’s income. For this reason GULC expects that, if married, you will file your taxes separately. If you still file jointly, GULC will calculate your LRAP benefits as if you had filed separately.

The cap of $75,000 is increased by 150% of the HHS Poverty amount for each additional dependant child or non-working spouse (currently $3,740).

You can find a more thorough introduction to IBR here, but here are some of the basics:

Payments under IBR are capped at 15% of everything above 150% of the federal poverty line. The federal poverty line varies with family size. For example, if your income is $60,000 and you have two people in your family (yourself and a spouse), your payments under IBR would be 15% times ($60,000 – (150% of $14,570)) = $5,722.

The downside of IBR is that you may be making little to no progress on your loans. Because your monthly payments can be so low, it is possible that your payments only go towards interest instead of the principal balance. If you do not end up having your loans forgiven (most likely because of leaving qualifying employment before ten years), you may have as much or even more debt than you had to start.

Hypothetical Scenarios
Let’s explore just a few hypotheticals to see how GULC’s LRAP might function. (On the table of contents page you will find links to websites I used to calculate federal tax burden and yearly student debt obligations. Using these, you can input your own variables. Keep in mind that the take-home income amount does not reflect state or local taxes. Treat all hypothetical scenarios and amounts as approximations.)

Scenario One
An unmarried graduate.

Salary: $45,000
Salary less Taxes: ($45,000 - $7,438) = $37,562
Law School Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Yearly Debt Obligation (on ten-year repayment): $13,810
Yearly Debt Obligation under IBR: (($45,000 – 1.5*$10,830)*.15) = $4,313
LRAP Award: $4,313
Graduate’s Contribution: $0
Take-home Income: $37,562

Scenario Two
An unmarried graduate.

Salary: $65,000
Salary less Taxes: ($65,000 - $12,438) = $52,562
Law School Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Yearly Debt Obligation (on a ten-year repayment): $13,810
Yearly Debt Obligation under IBR: (($65,000 – 1.5*$10,830)*.15) = $7,313
LRAP Award: $7,313
Graduate’s Contribution: $0
Take-home Income: $52,562

Scenario Three
A married graduate with two children. The spouse works but has filed taxes separately.

Graduate’s Salary: $80,000
Graduate’s Salary less Taxes: ($80,000 - $16,522) = $63,478
Graduate’s Law School Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Graduate’s Yearly Debt Obligation (on ten-year repayment): $13,810
Yearly Debt Obligation under IBR: (($80,000 – 1.5*$22,050)*.15) = $7,039
LRAP Award: $7,039 ($75,000 income cap moved to $86,220 due to two dependent children)
Graduate’s Take-home Income: $63,478

Final Thoughts on the Georgetown University Law Center Loan Repayment Assistance Program
The GULC LRAP is one of the most straightforward and generous programs of those that require enrollment in IBR. Those who commit to ten years in public service and maintain a salary below $75,000 can have the entirety of their IBR payments covered by GULC and the remaining balance forgiven by the federal government.

iCurrently:
Number in Family || Poverty Guideline

              1                      $10,830

              2                      $14,570

              3                      $18,310

              4                      $22,050

              5                      $25,790







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