Top Law Schools

Hi folks,

Is University of Michigan's LRAP as good as it seems?
https://www.law.umich.edu/financialaid/ ... grams.aspx

LRAP seems comforting in the face of sticker price at top law schools. Am I missing something? What are the catches?

Well, let me start by saying that I don't think either one is really "good", but they both are pretty standard and pretty similar.

Differences:

-Michigan's plan is income based, not employment based, so as long as you're not making more than their cap, 175% of GS-11 fedgov salary, you can get some help.
- Michigan has a way to offset your accrued interest should you exit the program, this means when you leave, your outstanding balance should be the same as the day you entered at worst.

Why they aren't great:

- Both plans force you into IBR/PAYE, so your loan will negatively amortize (you'll owe more the longer you're in the program), but Michigan works actively to offset this effect to neutral.

I'm another 0L and am researching LRAPs myself, so take this with a grain of salt. But from what I've gathered, yes; many LRAPs are comforting in the face of sticker debt. However, these are the issues:

1) Every LRAP (aside from a select few) rely on IBR/PSLF/PAYE, and also what is known as negative amortization. What this means is that a) the LRAP is reliant upon the federal government, which could potentially revoke some of the benefits. However, I will say that this seems unlikely to many, and even more unlikely that it will affect those who are already relying on them (basically meaning its a small consideration at this time). But, more importantly, b) those LRAP programs basically make your debt go up until the full 10 years are up. This is what I was referring to earlier with negative amortization.

2) With that in mind, these programs basically force you into a PI career for 10 full years (because its not like your debt is slowly getting lower as you make your way through the 10 years, its actually getting higher). That's obviously a pretty hefty commitment, and it will depend on a number of factors as to how dire a situation that is. Meaning if someone isn't 110% committed to PI, for example, its an extremely risky move because you could be locking yourself into 10 really, really shitty years and beyond.

3) Schools' LRAPs vary quite a bit in terms of the fine print, as you've already pointed out in terms of UCLA's counting spousal income and Michigan's not. I haven't done too much research on those schools in particular (and so my apologies for not being able to answer your questions specifically relating to them) but it is definitely worth reading every single fine print you can find and asking as many questions as possible so that you know exactly what you're getting yourself into before you commit.

EDIT: Fliptrip feel free to correct me on any if this if I'm off-base.

^ something else has good advice there but I'd like to add a few things, different LRAPs allow you to enter the program at different times (some allow for you to not enter for a number of years). Also they have different payback schedules if you drop out of a qualifying job before 10 years.

somethingelse55 wrote:
EDIT: Fliptrip feel free to correct me on any if this if I'm off-base.

You look spot-on to me. LRAP is terrific if you are 100% sure you're going to be able to do the 10 years in PI. It's important, though, to know the financial consequences of dropping out of the program before you hit the 10-years.

I would talk LRAP over thoroughly with the schools representative. Don't assume that you can just start a firm and get approved by Michigan or that you can just start your own non profit and get approved by UCLA. It is not that simple.

In another thread, someone suggested that Michigan's LRAP won't accept you if your loans are below a cutoff. Can anyone confirm/deny this? If it's true, do they coandiwe undergrad loans as well?

RZ5646 wrote:In another thread, someone suggested that Michigan's LRAP won't accept you if your loans are below a cutoff. Can anyone confirm/deny this? If it's true, do they coandiwe undergrad loans as well?

I don't think any one of us can tell you for sure, it factors in debt amount and income level, etc. so it doesn't, at least on the face, appear to have a cut off for loan amount on its own. You should talk with financial reps one on one for each school though to get more information. I would also give them as much information as possible.