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LRAP: Yale Law School

Published May 2010

Career Options Assistance Program

How it Works
Yale Law School (YLS) Career Options Assistance Program (COAP) participants are given assistance equal to the difference between imputed loan payments and their expected contribution based on income. Except in the case of judicial clerkships, this assistance is in the form of a direct award which the participant has no obligation to pay back.

Eligible Jobs
COAP eligibility is based on income and debt level. It appears nearly any job would qualify for COAP, although those working in government, nonprofits serving the public interest, academia, or low-wage private law practice are assuredly covered. Self-employment is treated on a case-by-case basis as are, presumably, other less traditional forms of employment.

Any qualifying position must be at least half-time. The income used for COAP calculations will be the imputed or actual full-time income.

Judicial clerkships are covered in more detail below.

Eligible Debt
Loans covered include any need-based loans processed through the YLS Financial Aid Office, up to $10,000 in bar expense loans, and up to $30,000 in undergraduate educational loans.

Loans not covered include those taken to replace student assets and summer savings, loans taken after graduation from YLS, and loans taken for amounts beyond the standard projected student budget.

Calculation of Expected Participant Contribution
COAP awards are based on an imputed loan repayment schedule that may not match the actual loan repayment schedule. In the first five years of COAP participation, awards (and therefore actual participant contributions) are based on a fifteen-year repayment schedule. For the next five years, COAP uses a five-year repayment plan based on the remaining principal and interest. In this way, COAP rewards YLS graduates who remain in the program while enabling them to pay off all eligible loans within ten years of joining COAP.

The amount a COAP participant is expected to contribute toward her loans differs depending on her marital status. Single participants with incomes below $60,000 are not expected to contribute anything.i For any income above $60,000, a single participant is expected to contribute 25% of that income. COAP will provide a direct award to cover the rest of the imputed (which may not fully match the actual) loan payment.

For married participants, COAP calculations are based on the household income. Household income is equal to the YLS graduate’s salary plus the spouse’s salary in excess of $40,000 minus the amount of spousal educational loan payments. For example, if the YLS graduate has a salary of $75,000 and is married to someone with a $65,000 salary and $10,000 of educational loan obligation per year, the household income is $90,000 ($75,000 + $25,000 - $10,000). If the household income is below $60,000, the participant again is expected to contribute nothing. 20% of any amount over $60,000 is to go towards loan payments. COAP covers the rest of the imputed loan payment.

If two COAP participants are married to each other, the income for each is calculated as half of the combined income and each is expected to contribute 25% of that adjusted salary above $60,000.

$8,000 per dependent plus up to $17,000 for reasonable expenses incurred for dependent care is deducted from the income figure.ii In addition to this, a $17,000 allowance will be added in cases where the participant’s spouse has foregone employment to take care of dependent children not yet in school.

Assets
While YLS has not published an asset contribution formula, “a portion of” assets are added to your income for purposes of COAP. A base amount of $6,000 plus $6,000 per year of COAP participation will be protected from consideration. Retirement accounts are also protected.

Judicial Clerkships
Rather than receiving a grant, those in judicial clerkships receive COAP benefits in the form of a loan. This loan amount is calculated in the same way as above, although the maximum amount is $10,000. The loan currently has an interest rate of 7.5%. If you continue in COAP-eligible employment after the clerkship, this loan is covered like other COAP-eligible loans. Once you leave COAP (or if you never enter COAP after your clerkship), the loan becomes repayable within a year.

Hypothetical Scenarios
Let’s explore a few hypothetical scenarios to see how COAP might function. Please note that these scenarios are based on a ten-year repayment plan. For some YLS graduates, it may be beneficial to enroll in a fifteen-year repayment plan since this is what COAP awards in the first five years are based on. (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 with no undergraduate debt within five years of entering COAP.

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
Imputed Yearly Debt Obligation Based on Fifteen-Year Repayment: $10,652
Graduate’s Expected Contribution: $0 (does not meet $60,000 threshold)
COAP Award: $10,652
Graduate’s Actual Contribution: ($13,810 - $10,652) = $3,158
Take-home Income: ($37,562 - $3,158) = $34,404

Scenario Two
An unmarried graduate with no undergraduate debt within five years of entering COAP.

Salary: $85,000
Salary less Taxes: ($85,000 - $17,520) = $67,480
Actual Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Actual Yearly Debt Obligation: $13,810
Imputed Yearly Debt Obligation Based on Fifteen-Year Repayment: $10,652
Graduate’s Expected Contribution: (25% of $25,000) = $6,250
COAP Award: ($10,652 - $6,250) = $4,402
Graduate’s Actual Contribution: ($13,810 - $4,402) = $9,408
Take-home Income: ($67,480 - $9,408) = $58,072 iii

Scenario Three
A married graduate with no undergraduate debt seven years after entering COAP. The graduate’s spouse has $12,000 in educational debt obligation per year. 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
Household Income: ($70,000 + $45,000 - $12,000 - $16,000 for dependent allowances) = $87,000
Graduate’s Actual Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Graduate’s Actual Yearly Debt Obligation iv: $13,810
Graduate’s Expected Contribution: (20% of $27,000) = $5,400
COAP Award: ($13,810 - $5,400) = $8,410
Graduate’s Take-home Income v: ($56,312 - $5,400) = $50,912

Scenario Four
An unmarried graduate with $25,000 in undergraduate debt seven years into COAP.

Salary: $100,000
Salary less Taxes: ($100,000 - $21,720) = $78,280
Total COAP-Eligible Debt: $125,000 on a ten-year repayment plan at 6.8% interest
Total Yearly COAP-Eligible Debt Obligation: $17,262
Graduate’s Expected Contribution: (25% of $40,000) = $10,000
COAP Award: ($17,262 - $10,000) = $7,262
Graduate’s Take-home Income: ($78,280 - $10,000) = $68,280

Final Thoughts on the Yale Law School Career Options Assistance Program
The total amount awarded to COAP participant may be quite substantial. In some cases, the amount awarded over ten years of participation could well exceed $100,000. COAP is perhaps the most generous of all loan repayment assistance programs. As we saw in scenario four, even someone with a six-figure salary could receive a significant amount of COAP assistance given the completely reasonable assumption of $125,000 of COAP-eligible debt upon graduation.

For those who intend to remain in COAP for all ten years, it is likely a good idea to enroll in a fifteen-year repayment plan so that you are not stretched too thin in the first five years. Your loans can still be paid off early (after ten years rather than fifteen) if you remain in COAP. This would change hypothetical scenarios one and two above.

It is important to remember that, as with all LRAPs, COAP takes individual factors into consideration with respect to both eligibility and actual award amount.

Additional Financial Support for Public Interest
In addition to COAP, YLS offers Summer Public Interest Fellowships (SPIF) for students working in government, nonprofit, and public interest. Students are eligible for up to $500 per week for 12 weeks. If the work is in a different country, the student may also be eligible for a travel grant. For more information, see http://www.law.yale.edu/admissions/SPIF.htm.


i However, as you will see in the Hypothetical Scenarios, if you have your loans on a ten-year repayment plan, you may in fact need to cover a portion of them even if your income is under $60,000.
ii For two married COAP participants, the dependent allowance is split in half.
iii If the loan is put on a fifteen-year repayment schedule, the COAP award would still be $10,652, but this would meet your actual debt obligation. The downside is that if you do not remain in COAP for a significant amount of time, you are still on a fifteen-year repayment schedule and will pay much more in interest than if you were on a ten-year repayment schedule.
iv In this case (more than five years after entering COAP), the COAP’s imputed debt obligation is roughly equal to the actual debt obligation. This is because COAP uses an imputed five-year repayment plan on the remaining principal and interest after the initial five years of COAP participation have been met (see first paragraph of “Calculation of Expected Participant Contribution” section).
v This figure is in addition to the spouse income which would roughly be $55,480 after taxes and educational loan payments. This is assuming the couple files taxes separately. Both numbers should be higher if they file jointly.







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