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Hello all!

I'm just trying to get a solid understanding of University of Virginia's loan forgiveness program for public service. I've read the online information https://www.law.virginia.edu/public-ser ... orgiveness but I've never done any type of loans before and I just want to make sure I understand it. This could be what decides where I go for school.

I understand that I have to fill out the FASFA and that's how I see loan amounts. I know VLFP only applies to federal loans which I'm told should be fine (I've been told that I can take out loans for the full cost of attendance regardless of any income or other restrictions).

1. From what I've read about some loan forgiveness programs, they seem to only kick in after 10 years. It doesn't look like that's the case with this but I wanted to verify. Does the assistance (full coverage if <$55k, other coverage if <$75k) begin immediately after graduating/submitting the application or is there a waiting period?

2. I see that the loans have to be placed in IBR or PAYE. I'm not sure what those are or what the process would be for doing that. I would love some additional information.

3. What happens to remaining loans after the conclusion of the 10 year program?

I'm hoping to find someone who has used this program. Again, I really don't know much about student loans so any information would be extraordinarily helpful. How much is expected to be repaid in a month/year (if it's related to income, assume like $60k or something)? Can anyone speak to what "other coverage" might be when income exceeds $55k? Does this program usually cover all of the loans or will there still be a large amount to be repaid after the ten years?

I'm assuming no scholarship award from UVA and I'm trying to limit the debt I'm in. I want to make sure I get all of my bases covered before I make a decision. I don't anticipate making a lot of money (likely headed to public defender's office) after graduating and I don't want to be forced into Big Law just to pay off my debt.

Also, if I theoretically went into private firm or started my own before the conclusion of the 10 years, am I no longer eligible even if my income is still under the threshold?

Thank you so much for any information you can provide! I've been reading the description over and over but I'm not understand it too much.

FWIW, public interest jobs are often just as competitive as biglaw or more so, so I’d caution against banking on heading to your local PD or even getting PI in general after graduation. You very well may, but I’d be skittish to *assume* you will.

Halp wrote:FWIW, public interest jobs are often just as competitive as biglaw or more so, so I’d caution against banking on heading to your local PD or even getting PI in general after graduation. You very well may, but I’d be skittish to *assume* you will.

Point being, I won't be making a lot of money. I'm really just looking for information about the loan forgiveness program but decided I'd throw some extra info in there since people usually ask.

Thanks!

I don’t know anything about UVA specifically, but to put loans in IBR/PAYE all you do is fill out a form online that you submit to your lender, with paperwork to verify your income. You do this once you’ve graduated and your obligation to start making payments kicks in. You have to re-verify your income once a year so they can recalculate your payment (or if your income changes significantly you can change the payment partway thru the year.) You don’t have to worry about it till after graduation.

What I suspect the program is doing (this is the case with many LRAPs) is giving you money to pay your loans during the 10 years it takes to earn public service loan forgiveness on federal loans through the government. There’s one of two ways this usually happens: your loan payment is set at the standard 10-year repayment plan, you have to pay some percentage every month and the school kicks in the rest, and at the end of 10 years, your loans are gone because between you, you paid everything; or your loan payment is set at the income-based rate under IBR or PAYE, the school pays (or gives you money to pay) the income-based rate, and at the end of the 10 years you apply for public service loan forgiveness to get the rest of the loan forgiven (assuming you qualify for forgiveness, but the presumption is that the conditions required to qualify for UVA’s public service repayment plan will qualify for forgiveness from the feds).

I can’t remember what percentage of your income IBR/REPAYE require you to pay, I think it’s 10% or 15% of your income. Depending how large a loan you take out, this is definitely not going to pay off your debt. (I am on one of these and my debt is larger now than when I graduated).

As for joining a firm/starting one before the 10 years are up, you would make yourself ineligible for public service loan forgiveness from the feds. I suspect it would also kick you out of the UVA program. If the UVA assistance is based on the second scenario I outlined, where they’re making payments on the assumption that you’re going to get forgiveness from the feds, going private would wreck that (but even if it’s the first scenario I’m pretty sure private practice would be per se not public service. If you started a non-profit offering legal services that might still apply, but you’d be getting into murky waters).

(Also: IBR is income-based repayment and REPAYE is another income-based repayment plan but I can’t remember the words behind the acronym. Both are payment plans offered by the federal government where loan payments are capped at some percentage of your income, I think 10%. Anyone can get on these programs and after 25 (IBR) or 20 (REPAYE) years of payments, whatever’s left is forgiven, BUT you have to pay tax on the forgiven amount as if it’s income you received.

The public service wrinkle is that if you make 120 monthly payments - they don’t have to be consecutive - under IBR/REPAYE, and you are employed by a qualifying public service employer, you are eligible to get whatever is left of your loan at that point forgiven by the feds with no tax bomb.

Caveat is that they’ve been hugely nit picky about forgiving the loans so far so you need to make sure you’re on the right plan and your employer qualifies and so on. The first waves of people trying to qualify for forgiveness have not done very well, but admittedly it wasn’t well understood when it first came out so people didn’t always get on the right kind of payment plan right away etc. So it’s unfortunately possible that you could work for 10 years for very low pay in the most noble of public service positions but none of those payments count if you didn’t get the right plan put in place.)

First off, I just want to say thank you. This was so incredibly helpful and I really appreciate it. I get to go do some math now and crunch the numbers. I think I'll be able to figure this all out now thanks to you so honestly thank you so much.

nixy wrote:(I am on one of these and my debt is larger now than when I graduated).

To clarify, does this mean the payments you're making are less than the interest that's being added to your loan? Do you mind speaking to this financial situation a little bit more? (If not, that's okay, I'm not trying to pry into your financials).

bciara96 wrote:

Halp wrote:FWIW, public interest jobs are often just as competitive as biglaw or more so, so I’d caution against banking on heading to your local PD or even getting PI in general after graduation. You very well may, but I’d be skittish to *assume* you will.

Point being, I won't be making a lot of money. I'm really just looking for information about the loan forgiveness program but decided I'd throw some extra info in there since people usually ask.

Thanks!

Yeah, I just mention it because (as other posters have detailed) the details of your job and the programs really matter, so to the extent they depend on being in these competitive positions (as opposed to not making a lot of money for any reason whatsoever) you should be aware of that. Very best of luck figuring out all this...I wouldn’t want to have to do so.