LRAP: University of Pennsylvania School of Law

How It Works
The University of Pennsylvania School of Law’s (Penn’s) Toll Loan Repayment Assistance Program (TolLRAP) is a program which provides graduates in eligible employment with an interest-free loan to help repay their educational loans. Loans disbursed under TolLRAP are forgiven one year later, assuming the graduate has remained in qualifying employment.1 The amount of the loan is dependent on the graduate’s expected contribution (based on income) and their debt obligation. TolLRAP meets the difference between these.

Graduates may enter the program anytime within ten years of the time when law school loans become repayable, and may remain for up to ten years after graduation.

Eligible Jobs
In order to qualify for Penn’s TolLRAP, the graduate must be employed:
(1) in a law-related position;
(2) in a public interest position, defined as

a) government work, or
b) nonprofit work for an organization that serves underrepresented clients, or
c) clinical law teaching which involves advocacy for underrepresented clients, or
d) private practice or self-employment in which over 50% of work provides underrepresented clients with reduced or no-fee representation.

Graduates must also be employed at least 20 hours a week. Graduates working between 20 and 39 hours per week will have their expected contribution calculated based on an imputed full-time salary.

While judicial clerkships are not covered, graduates may have their TolLRAP eligibility extended for an additional one or two years, depending on the length of the clerkship.

Eligible Debt
Loans taken to finance law school are the only TolLRAP-eligible loans. Undergraduate and other graduate debt does not qualify.

Calculation of Expected Participant Contribution
TolLRAP participants are expected to contribute a certain amount towards their loans based on their income. If married, the income figure used for calculations is either the participant’s income or one-half the joint income, whichever is higher.

Those whose income is below $45,000 annually are not expected to contribute anything. Graduates making in excess of $45,000 are expected to pay a portion of the income which exceeds this figure. Specifically, participants are expected to contribute 20% of anything between $45,000 and $50,000; 40% of anything between $50,000 and $55,000; and 60% of anything over $55,000. Please see further examples below.

Depending on funding, graduates may see their funding capped at $14,000 per year.

Participants receive an allowance/exemption (to be subtracted from income for calculation purposes) of $5,000 for the first minor child and $3,500 for each additional child. See Hypothetical Scenario Three below for an example.

Hypothetical Scenarios
Let’s explore a few hypothetical scenarios to see how TolLRAP 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.)

An unmarried graduate.
Salary: $45,000
Salary less Taxes: ($45,000 - $7,438) = $37,562
Actual Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Actual Yearly Debt Obligation: $13,810
Graduate’s Expected Contribution: $0 (does not meet $45,000 threshold)
TolLRAP Award: $13,810
Take-home Income: $37,562

Scenario Two
An unmarried graduate.
Salary: $75,000
Salary less Taxes: ($75,000 - $14,931) = $60,069
Actual Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Actual Yearly Debt Obligation: $13,810
Graduate’s Expected Contribution: (20% of $5,000 plus 40% of $5,000 plus 60% of $20,000) = up to $15,000
TolLRAP Award: $0
Take-home Income: ($60,069 - $13,810) = $46,259

Scenario Three
A married graduate. The couple has two children.
Graduate’s Salary: $70,000
Graduate’s Salary less Taxes: ($70,000 - $13,688) = $56,312
Spouse’s Salary: $85,000
One-Half Joint Income: ($70,000 + $85,000)/2 = $77,500
We will use the one-half joint income figure for calculation since it is higher. However, we also need to calculate the exemption for two children: ($77,500 - $8,500) = $69,000
Graduate’s Actual Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Graduate’s Actual Yearly Debt Obligation: $13,810
Graduate’s Expected Contribution: (20% of $5,000 plus 40% of $5,000 plus 60% of $14,000) = $11,400
TolLRAP Award: ($13,810 - $11,400) = $2,410
Graduate’s Take-home Income: ($56,312 - $11,400) = $44,912

Final Thoughts on the University of Pennsylvania School of Law Toll Loan Repayment Assistance Program
While many students will be thankful that TolLRAP does not require enrollment in IBR, some graduates may still need to consider it. Those with debt of $150,000 or more and a salary of around $80,000 would be expected to cover $18,000 of their debt obligation. This may prove difficult for some.

Additional Financial Support for Public Interest
Penn awards three fellowships to support graduates in their public interest ventures: http://www.law.upenn.edu/pic/gradfellow/

i If the graduate does not complete the full year of public interest employment, the loan will become repayable the next January on a one year schedule (currently) at 6% interest.