T-14 LRAP Overview Forum

[Veil of Ignorance]

The best bet to maximize SLS benefits with 300k debt is to go under PAYE and cop PSLF forgiveness. They'll never pay a cent out of pocket until their income gets closer to $120k.

I'm not gonna do anymore of the work for you. Run the math and answer your own questions that can be answered with this data.

Hey, thank you so much for all this information! I was misunderstanding how LRAP works. I'll also look into PAYE and PSLF. I'm very grateful

[Nebby]

The best bet to maximize SLS benefits with 300k debt is to go under PAYE and cop PSLF forgiveness. They'll never pay a cent out of pocket until their income gets closer to $120k.

I'm not gonna do anymore of the work for you. Run the math and answer your own questions that can be answered with this data.

Hey, thank you so much for all this information! I was misunderstanding how LRAP works. I'll also look into PAYE and PSLF. I'm very grateful

I am a PI attorney utilizing CLS LRAP so I generally have a good idea how these programs work. If you have more questions let me know and I'll do my best to answer

[Veil of Ignorance]

In California, your take home pay on $100k would be $68,015/year (before any deductions/credits/adjustments).

For SLS, your adjusted gross income is whatever it was on the previous year's tax returns.

Federal tax brackets:
$37,450 - $90,750 25.00%
$90,750 - $189,300 28.00%

$40,773 - $51,530 8.00%
$51,530 - $263,222 9.30%

I'm sorry for belabouring the point, but just to put my initial question to rest: when you add up the marginal federal (25%), State (9.3%) and FICA (7.65%) taxes at/above $80k in San Francisco, California, you arrive at 41.95%. Given that 60% of yearly income above $80k is subtracted from Stanford's LRAP payment, it seems like moving from an $80k/year job to a $100k/year job wouldn't actually increase your take-home pay (gross - taxes - loan repayment), in San Francisco. It looks like it would actually slightly decrease it.

[Nebby]

In California, your take home pay on $100k would be $68,015/year (before any deductions/credits/adjustments).

For SLS, your adjusted gross income is whatever it was on the previous year's tax returns.

Federal tax brackets:
$37,450 - $90,750 25.00%
$90,750 - $189,300 28.00%

$40,773 - $51,530 8.00%
$51,530 - $263,222 9.30%

I'm sorry for belabouring the point, but just to put my initial question to rest: when you add up the marginal federal (25%), State (9.3%) and FICA (7.65%) taxes at/above $80k in San Francisco, California, you arrive at 41.95%. Given that 60% of yearly income above $80k is subtracted from Stanford's LRAP payment, it seems like moving from an $80k/year job to a $100k/year job wouldn't actually increase your take-home pay (gross - taxes - loan repayment), in San Francisco. It looks like it would actually slightly decrease it.

Think of your question in a different way.
All assumptions based on the 300k debt in the prior hypothetical.

Cali take home pay on 100k is $68,015/year and 80k is $56,405/year.
SLS LRAP pays out $18,150/year on 100k salary and $28,350 on 80k salary (39600 - 2250 - (0.5 x 15k)).

If you think of the SLS LRAP benefit as an addition to salary (which as I explain below is an incorrect way to categorize it), then your total "take home" on a 100k salary is $86,165 (68015+18150) and on 80k salary is $84,755. 100k salary "take home" is a tad higher than 80k.

However, LRAP benefits should not be thought of as take home income, since they can be used exclusively on paying down loans.

If the person with 300k does what I recommend, which is get on PAYE, then the LRAP benefit will more than cover their required payment up to a salary of $120k, and therefore the $100k and $80k person will not be paying anything out of pocket in loans. Therefore, the $100k person is still taking home ~$11,700 more a year than the $80k person.

[Veil of Ignorance]

In California, your take home pay on $100k would be $68,015/year (before any deductions/credits/adjustments).

For SLS, your adjusted gross income is whatever it was on the previous year's tax returns.

Federal tax brackets:
$37,450 - $90,750 25.00%
$90,750 - $189,300 28.00%

$40,773 - $51,530 8.00%
$51,530 - $263,222 9.30%

I'm sorry for belabouring the point, but just to put my initial question to rest: when you add up the marginal federal (25%), State (9.3%) and FICA (7.65%) taxes at/above $80k in San Francisco, California, you arrive at 41.95%. Given that 60% of yearly income above $80k is subtracted from Stanford's LRAP payment, it seems like moving from an $80k/year job to a $100k/year job wouldn't actually increase your take-home pay (gross - taxes - loan repayment), in San Francisco. It looks like it would actually slightly decrease it.

Think of your question in a different way.
All assumptions based on the 300k debt in the prior hypothetical.

Cali take home pay on 100k is $68,015/year and 80k is $56,405/year.
SLS LRAP pays out $18,150/year on 100k salary and $28,350 on 80k salary (39600 - 2250 - (0.5 x 15k)).

If you think of the SLS LRAP benefit as an addition to salary (which as I explain below is an incorrect way to categorize it), then your total "take home" on a 100k salary is $86,165 (68015+18150) and on 80k salary is $84,755. 100k salary "take home" is a tad higher than 80k.

However, LRAP benefits should not be thought of as take home income, since they can be used exclusively on paying down loans.

If the person with 300k does what I recommend, which is get on PAYE, then the LRAP benefit will more than cover their required payment up to a salary of $120k, and therefore the $100k and $80k person will not be paying anything out of pocket in loans. Therefore, the $100k person is still taking home ~$11,700 more a year than the $80k person.

Good point. After reading about these programs, I'm surprised that people are so debt averse when it comes to top schools, particularly HYSC. A LRAP + PAYE + PSLF combination seems pretty great.

[Nebby]

In California, your take home pay on $100k would be $68,015/year (before any deductions/credits/adjustments).

For SLS, your adjusted gross income is whatever it was on the previous year's tax returns.

Federal tax brackets:
$37,450 - $90,750 25.00%
$90,750 - $189,300 28.00%

$40,773 - $51,530 8.00%
$51,530 - $263,222 9.30%

I'm sorry for belabouring the point, but just to put my initial question to rest: when you add up the marginal federal (25%), State (9.3%) and FICA (7.65%) taxes at/above $80k in San Francisco, California, you arrive at 41.95%. Given that 60% of yearly income above $80k is subtracted from Stanford's LRAP payment, it seems like moving from an $80k/year job to a $100k/year job wouldn't actually increase your take-home pay (gross - taxes - loan repayment), in San Francisco. It looks like it would actually slightly decrease it.

Think of your question in a different way.
All assumptions based on the 300k debt in the prior hypothetical.

Cali take home pay on 100k is $68,015/year and 80k is $56,405/year.
SLS LRAP pays out $18,150/year on 100k salary and $28,350 on 80k salary (39600 - 2250 - (0.5 x 15k)).

If you think of the SLS LRAP benefit as an addition to salary (which as I explain below is an incorrect way to categorize it), then your total "take home" on a 100k salary is $86,165 (68015+18150) and on 80k salary is $84,755. 100k salary "take home" is a tad higher than 80k.

However, LRAP benefits should not be thought of as take home income, since they can be used exclusively on paying down loans.

If the person with 300k does what I recommend, which is get on PAYE, then the LRAP benefit will more than cover their required payment up to a salary of $120k, and therefore the $100k and $80k person will not be paying anything out of pocket in loans. Therefore, the $100k person is still taking home ~$11,700 more a year than the $80k person.

Good point. After reading about these programs, I'm surprised that people are so debt averse when it comes to top schools, particularly HYSC. A LRAP + PAYE + PSLF combination seems pretty great.

It is great, but you have to be committed to it. It takes someone with a pretty strong sense of self and foresight to commit to that path, and law students don't typically have those qualities. Let alone most 0Ls who literally don't know shit

[katthegreat11]

.

[Nebby]

So y'all are saying, if your regular loan payment is let's say $3300 a month (using your earlier estimates), and you make $100k a year, SLS will give you a loan for 45% of that payment, approximately $1512 a month, which still leaves you $1815 out of pocket. BUT, you can also go on PAYE, which will reduce your monthly minimum payments to ~$684.83 a month instead of $3300 (using that calculator). So then SLS is giving you a monthly loan of $1512 for $684.83 payments, so you don't pay anything out of pocket plus you're paying more than the minimum monthly payments. Is that correct? And how does PSLF factor into that?

And then how do repayment periods work? SLS's LRAP has a max of 10 years, PAYE/REPAYE is 20/25 years. When do you stop? What happens when you're no longer eligible for LRAP?

Also, while PSLF requires a full 10 years of public service, SLS's LRAP does not; you can enter and re-enter as much as you'd like within 10 years, which makes the total commitment a little less intimidating.

RE: the bolded
Yes, that is a correct summation of how to combine PAYE and LRAP.

PSLF factors into it because, after after making 120 consecutive PAYE payments (10 years), the rest of the federal debt will be forgiven. This syncs up with the 10 year period of the SLS LRAP, which has a max of 10 years (120 months worth of benefits). This method obviously only works for someone who stays in PSLF employment, which is a position one has to be really committed to.

[katthegreat11]

.

[Nebby]

So y'all are saying, if your regular loan payment is let's say $3300 a month (using your earlier estimates), and you make $100k a year, SLS will give you a loan for 45% of that payment, approximately $1512 a month, which still leaves you $1815 out of pocket. BUT, you can also go on PAYE, which will reduce your monthly minimum payments to ~$684.83 a month instead of $3300 (using that calculator). So then SLS is giving you a monthly loan of $1512 for $684.83 payments, so you don't pay anything out of pocket plus you're paying more than the minimum monthly payments. Is that correct? And how does PSLF factor into that?

And then how do repayment periods work? SLS's LRAP has a max of 10 years, PAYE/REPAYE is 20/25 years. When do you stop? What happens when you're no longer eligible for LRAP?

Also, while PSLF requires a full 10 years of public service, SLS's LRAP does not; you can enter and re-enter as much as you'd like within 10 years, which makes the total commitment a little less intimidating.

RE: the bolded
Yes, that is a correct summation of how to combine PAYE and LRAP.

PSLF factors into it because, after after making 120 consecutive PAYE payments (10 years), the rest of the federal debt will be forgiven. This syncs up with the 10 year period of the SLS LRAP, which has a max of 10 years (120 months worth of benefits). This method obviously only works for someone who stays in PSLF employment, which is a position one has to be really committed to.

Hm okay so since you are only eligible for SLS LRAP for the 10 years after graduation, if you did private work for 2 years, then switched to public interest, you would get 8 years of LRAP + PAYE and then 2 years of out of pocket PAYE payments (but only $684 assuming you don't start making over $120k)? And then apply for PSLF (because PAYE counts as a qualifying repayment plan) after those 10 years, and poof bye bye remaining debt?

Under that scenario, you'd pay ($3300 * 24 months in private = $79200) + ($0 for 8 years) + ($684 * 24 months with PAYE but without LRAP = $16416) = $95616 out of pocket total, 14 years after graduation. Potentially less if you got on PAYE for those two years in private too. Does that sound correct?

Yes.

[katthegreat11]

.

[Nebby]

Yes.

Haha thank you! It's a lot to wrap your head around, I appreciate your time

It can be very confusing! But you go to law school to learn how to wrap your head around complex concepts and make them simple.

[20171lhopeful]

Is NYU's LRAP tied to PSLF?

[Rigo]

Is NYU's LRAP tied to PSLF?

If you're eligible for it, yes.

[Nebby]

Is NYU's LRAP tied to PSLF?

Read yourself
http://www.law.nyu.edu/financialaid/lra ... ls#PROGRAM TERMS

[airwrecka]

Is NYU's LRAP tied to PSLF?

If you're eligible for it, yes.

^yes.

Also, I emailed the LRAP program office at NYU and asked about what would happen if PSLF were discontinued, and they used very strong language to reassure me that LRAP at NYU would continue and NYU is very committed to helping PI-oriented students with their debt, regardless of federal policies. basically everyone would switch over to their standard LRAP (which you're in right now if you don't qualify for PSLF anyway)

[20171lhopeful]

Is NYU's LRAP tied to PSLF?

If you're eligible for it, yes.

^yes.

Also, I emailed the LRAP program office at NYU and asked about what would happen if PSLF were discontinued, and they used very strong language to reassure me that LRAP at NYU would continue and NYU is very committed to helping PI-oriented students with their debt, regardless of federal policies. basically everyone would switch over to their standard LRAP (which you're in right now if you don't qualify for PSLF anyway)

PSLF doesn't count international employment as eligible and that's what I'm aiming for. If I don't qualify and join NYU's LRAP, would my loans still be forgiven in 10 years even if I'm not in PSLF?

[Nebby]

Is NYU's LRAP tied to PSLF?

If you're eligible for it, yes.

^yes.

Also, I emailed the LRAP program office at NYU and asked about what would happen if PSLF were discontinued, and they used very strong language to reassure me that LRAP at NYU would continue and NYU is very committed to helping PI-oriented students with their debt, regardless of federal policies. basically everyone would switch over to their standard LRAP (which you're in right now if you don't qualify for PSLF anyway)

PSLF doesn't count international employment as eligible and that's what I'm aiming for. If I don't qualify and join NYU's LRAP, would my loans still be forgiven in 10 years even if I'm not in PSLF?

No. Forgiveness is a PSLF thing, therefore if you don't qualify you don't get forgiven.

[Rigo]

Is NYU's LRAP tied to PSLF?

If you're eligible for it, yes.

^yes.

Also, I emailed the LRAP program office at NYU and asked about what would happen if PSLF were discontinued, and they used very strong language to reassure me that LRAP at NYU would continue and NYU is very committed to helping PI-oriented students with their debt, regardless of federal policies. basically everyone would switch over to their standard LRAP (which you're in right now if you don't qualify for PSLF anyway)

PSLF doesn't count international employment as eligible and that's what I'm aiming for. If I don't qualify and join NYU's LRAP, would my loans still be forgiven in 10 years even if I'm not in PSLF?

No. Forgiveness is a PSLF thing, therefore if you don't qualify you don't get forgiven.

NYU kicks you onto their own LRAP program though similar to HYS (and the $50k non-integrated Columbia option) if you don't qualify for PLSF, so you could still get forgiven.
The poster should obviously sit down with NYU financial aid people to fully understand how it works though.

[Rigo]

And please tell me to stfu if I have a completely flawed understanding. I spent hours researching this stuff since I was starting from a zero knowledge baseline (I didn't even know what the word amortization meant), but I could still be missing a fundamental concept.

[cavalier1138]

And please tell me to stfu if I have a completely flawed understanding. I spent hours researching this stuff since I was starting from a zero knowledge baseline (I didn't even know what the word amortization meant), but I could still be missing a fundamental concept.

You're correct about NYU's program. The non-PSLF version is almost exclusively for international work, because that's the main kind of PI that doesn't qualify for PSLF.

[Nebby]

And please tell me to stfu if I have a completely flawed understanding. I spent hours researching this stuff since I was starting from a zero knowledge baseline (I didn't even know what the word amortization meant), but I could still be missing a fundamental concept.

You're correct about NYU's program. The non-PSLF version is almost exclusively for international work, because that's the main kind of PI that doesn't qualify for PSLF.

Yup.

I was being because I hate answering questions from posters who, had they read the respective LRAP policy, they would find the answer.

[20171lhopeful]

And please tell me to stfu if I have a completely flawed understanding. I spent hours researching this stuff since I was starting from a zero knowledge baseline (I didn't even know what the word amortization meant), but I could still be missing a fundamental concept.

You're correct about NYU's program. The non-PSLF version is almost exclusively for international work, because that's the main kind of PI that doesn't qualify for PSLF.

Yup.

I was being because I hate answering questions from posters who, had they read the respective LRAP policy, they would find the answer.

Yes, I could have read the whole term section in depth, but it's faster and easier to get a response through these channels, and it was. Next time, feel free not to respond.

[Nebby]

And please tell me to stfu if I have a completely flawed understanding. I spent hours researching this stuff since I was starting from a zero knowledge baseline (I didn't even know what the word amortization meant), but I could still be missing a fundamental concept.

You're correct about NYU's program. The non-PSLF version is almost exclusively for international work, because that's the main kind of PI that doesn't qualify for PSLF.

Yup.

I was being because I hate answering questions from posters who, had they read the respective LRAP policy, they would find the answer.

Yes, I could have read the whole term section in depth, but it's faster and easier to get a response through these channels, and it was. Next time, feel free not to respond.

Possible but not likely, just like entry level international PI employment

(I'll see myself out now)

[20171lhopeful]

And please tell me to stfu if I have a completely flawed understanding. I spent hours researching this stuff since I was starting from a zero knowledge baseline (I didn't even know what the word amortization meant), but I could still be missing a fundamental concept.

You're correct about NYU's program. The non-PSLF version is almost exclusively for international work, because that's the main kind of PI that doesn't qualify for PSLF.

Yup.

I was being because I hate answering questions from posters who, had they read the respective LRAP policy, they would find the answer.

Yes, I could have read the whole term section in depth, but it's faster and easier to get a response through these channels, and it was. Next time, feel free not to respond.

Possible but not likely, just like entry level international PI employment

(I'll see myself out now)

again, feel free not to respond.