|Pre-law Personal Statements LSAT Dean Interviews TLS Stats TLS Programs|
LRAP: New York University School of Law
Published May 2010
Melvyn and Barbara Weiss Loan Repayment Assistance Program
How it Works
NYU School of Law graduates in eligible employment are given an interest-free loan to cover the amount between their expected contribution and their qualifying debt service. These loans are disbursed quarterly and forgiven after three years of participation in the Loan Repayment Assistance Program (LRAP). All subsequent loans are forgiven one year after disbursement. If the participant leaves eligible employment prior to loan forgiveness, interest begins to accrue at 8% and the full loan amount must be repaid. Participants must be within ten years of graduation to participate.1
In order to qualify for LRAP, the graduate must be employed:
(1) in a paid position full-time2
Private sector work may qualify if the graduate and organization serves underrepresented clients over half of the time. Self-employment is treated on a case-by-case basis.
Judicial clerkships are only covered if the graduate intends to pursue eligible employment afterward. As opposed to the interest-free loans generally given to participants, loans disbursed to judicial clerks accrue interest at 8% annually. If the graduate does indeed continue on to eligible employment, the interest is forgiven after one year and the clerkship period counts towards the three years needed for loan forgiveness. Loans become immediately payable if the clerkship is not followed by eligible employment.
Law school loans approved and recognized by NYU are covered under LRAP. Loans for up to $10,000 for bar-related expenses are also covered. No personal loans, parental loans, or consumer debt is eligible.
The amount of “qualifying debt” used for LRAP calculations is either the graduate’s actual debt3 or the maximum LRAP-eligible debt (an amount equal to three years of the student budget minus aid received minus the student contribution4), whichever is less.
For example, let’s say a student has $140,000 in law school debt. This is their actual debt. The maximum LRAP-eligible debt would be three years of the student budget (~$200,000) minus any aid amount received (let’s say $30,000 over three years) minus the expected student contribution. Having made $22,000 after 2L summer, $7,000 of that is added to the original student contribution of $7,000. So the maximum LRAP-eligible debt for this student is $156,000 ($200,000 minus $30,000 minus $14,000). Since this student’s actual debt ($140,000) is less than their maximum LRAP-eligible debt ($156,000), the actual debt figure is used for calculation of LRAP benefits.
LRAP benefits are calculated using an imputed or actual ten-year repayment plan on the amount of the qualifying debt.
In order to be eligible for LRAP, the graduate cannot have a net worth (assets minus debts) of more than $20,000. For most with significant law school debt, this should not pose much of an issue. If married, half of the combined net worth must not exceed $20,000. Retirement accounts are protected from consideration.
Calculation of Expected Participant Contribution
For single graduates, the figure used for LRAP benefits calculation is simply any income from employment. If the graduate is married or has a domestic partner, either the graduate’s income or half of the joint income is used, whichever is higher. In calculating the spouse’s income, up to $5,000 in undergraduate student debt obligation is subtracted. If two NYU LRAP participants are married, their income is treated separately.
If a graduate’s income is less than the income “base” dictated by the LRAP program, the graduate is not expected to contribute anything towards his/her qualifying debt obligation. The base is currently set at $50,770. The graduate is to contribute 40% of any additional income between $50,770 and $70,770 and 50% of any additional income between $70,770 and $80,770 to qualifying debt service. Those with incomes above the cap of $80,770 are not eligible for LRAP benefits.
The base is to go up at least 10% in the fourth and seventh years after graduation to allow for salary raises. The difference between the base and cap will remain at $30,000 and expected participant contribution will be calculated accordingly.
Up to $5,000 per year is directly subtracted from the expected contribution based on annual educational debt service from undergraduate or other graduate debt. See Hypothetical Scenario Three to see an example of this.
Let’s explore a few hypothetical scenarios to see how NYU’s LRAP might work. (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.)
Final Notes on the NYU Loan Repayment Assistance Program
There are certainly many scenarios under which an LRAP participant would benefit greatly from the Program. In some cases, the total amount awarded could match the entire loan amount of over $100,000. However, those who do not qualify because they make more than the current cap of $80,770 may experience difficulty paying off over $15,000 of student loans per year.
Additional Financial Support for Public Interest
In addition to LRAP, NYU offers guaranteed funding for 1L and 2L summers for those working in a qualifying public interest position for at least ten weeks. The amount of this funding is not listed on the website. For more information, see http://www.law.nyu.edu/financialaid/summerfunding/index.htm.
There are also a number of prestigious and large scholarships assigned to incoming students with a desire to enter public interest law. See http://www.law.nyu.edu/financialaid/scholarships/jdscholarships/index.htm for details.
i Or up to twelve years after graduation in the case of deferments, which may be granted for up to two years for continuing education, economic hardship, involuntary unemployment, temporary disability, or parental leave.
LRAP: Yale Law School
LRAP: Harvard Law School
LRAP: Stanford Law School
LRAP: Columbia Law School
LRAP: University of Chicago Law School
LRAP: New York University School of Law
LRAP: Berkeley School of Law
LRAP: University of Pennsylvania School of Law
LRAP: University of Michigan Law School
LRAP: University of Virginia School of Law
LRAP: Duke Law School
LRAP: Cornell Law School
LRAP: Northwestern University Law School
LRAP: Georgetown University Law Center
LRAP: University of Southern California Law School
LRAP: Vanderbilt University Law School
LRAP: Washington University School of Law
LRAP: The University of Texas School of Law
LRAP: Emory University School of Law
LRAP: George Washington University Law School
LRAP: Notre Dame Law School
LRAP: Boston College Law School
LRAP: Boston University School of Law
LRAP: University of Illinois College of Law
LRAP: University of California, Los Angeles Law School