LRAP: Notre Dame Law School

Published July 2010, last updated August 2010

Loan Repayment Assistance Program

How it Works
Notre Dame Law School graduates enrolled in the Loan Repayment Assistance Program (LRAP) receive a forgivable loan to help meet law school loan repayment. A percentage of loan payments are eligible for assistance depending on the graduate’s income.

LRAP loans are forgiven in their entirety after three years of eligible employment. Graduates may remain in the program for a maximum of five years, starting the January after graduation.

Eligible Jobs
Eligible positions must make use of the “skills and knowledge” obtained from the graduate’s legal education. Positions with governmental bodies or nonprofits that serve the public good qualify for assistance.

Part-time positions are eligible but will be reduced proportionately.

Judicial clerkships are not eligible (but will serve towards the years required for loan forgiveness). Notre Dame may disqualify “employment that contradicts the teachings of the Catholic Church.”

Eligible Debt
Graduates must have at least $10,000 in need-based law school loans. Only law school loans are eligible.

Calculation of Graduate’s LRAP Award
If the graduate’s income is below $34,000, s/he is eligible to receive an LRAP loan covering 100% of payments on eligible loans. The amount for which s/he is eligible will decrease by .005% for each dollar made by the graduate. The following table shows the percentage eligible for each $2,000 increment:

The calculation of this income is done differently for married and unmarried graduates. Unmarried graduates should take their gross income and subtract annual non-law school educational loan payments, an exemption for each dependent child (equal to the amount claimed on the federal tax return), contributions to retirement plans (up to 10% of gross income), and any contributions to health and dental care.

Married graduates should compute each person’s income as above (subtracting law school debt obligation for the spouse and adding any spousal loan repayment assistance). The income used for calculations is then the higher of the graduate’s income or ½ the joint income.

Assets
For the purposes of the following calculations, assets include cash, savings, investments, property less amounts owed on property. Retirement accounts and the first $50,000 in equity on the primary residence are exempted.

Each year after graduation, a graduate is allowed $5,000 of protected assets. If the graduate has assets exceeding this protected amount, Notre Dame will reduce the benefit amount the graduate is eligible to receive. The benefit amount is reduced by a percentage equal to the amount of unprotected assets divided by the total unpaid balance of eligible loans.

For example, a graduate has $25,000 in assets and graduated three years ago, meaning she has $15,000 in protected assets and $10,000 in unprotected assets. She has $75,000 remaining on her eligible loans. $10,000 divided by $75,000 is 13.3%, and this is the percentage by which her maximum award eligibility is reduced. For example, if she was previously eligible for 80% of her loans to be covered, she is now eligible for only 69.3% of her loans to be covered (13.3% of 80% is 10.7%).

Loan Forgiveness
As stated above, LRAP loans are not completely forgiven until three years of participation. If you remain in the program for one year, 1/3 of your LRAP loan will be forgiven and 2/3 if you remain for two years. Graduates must repay any LRAP loans not forgiven over a five-year repayment period.

Hypothetical Scenarios
Let’s explore just a few hypotheticals to see how Notre Dame’s LRAP might function. In all situations below I assume the graduate receives the full amount for which s/he is eligible. It is advised that you consult with the Notre Dame Financial Aid Office to determine the likelihood of this occurrence. (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.
Salary: $30,000
Salary less Taxes: ($30,000 - $4,081) = $25,919
Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Yearly Debt Obligation (on ten-year repayment): $13,810
LRAP Award: $13,810 (100% of eligible loans)
Take-home Income: $25,919

Scenario Two
An unmarried graduate.
Salary: $45,000
Salary less Taxes: ($45,000 - $7,438) = $37,562
Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Yearly Debt Obligation (on ten-year repayment): $13,810
LRAP Award: (45% of eligible loans ($13,810)) $6,215
Take-home Income: ($37,562 - $7,595) = $29,967

Scenario Three
A married graduate with no non-law school educational debt. The couple has two children. The spouse has $3,000 per year in educational loan repayment.
Graduate’s Salary: $50,000
Graduate’s Income (for LRAP purposes): ($50,000 - $3,000 [1/2 dependent deductions]) = $47,000
Graduate’s Salary less Taxes: ($50,000 - $8,681) = $41,319
Graduate’s Debt: $100,000 on a ten-year repayment plan at 6.8% interest
Graduate’s Yearly Debt Obligation (on ten-year repayment): $13,810
Spouse’s Salary: $60,000
Spouse’s Income (for LRAP purposes): ($60,000 - $3,000 - $3,000 [1/2 dependent deductions]) = $54,000
Income used for LRAP Calculation: ½ joint income, or $50,500
LRAP Award: (17.5% of eligible loans ($13,810)) = $2,417
Graduate’s Take-home Income: ($41,319 - $11,393) = $29,926

Final Thoughts on the Notre Dame Law School Loan Repayment Assistance Program
Notre Dame takes care to warn potential LRAP applicants that no graduate is guaranteed funding, even if they may have received it in a previous year. While some funding will be available each year, the level of funding may fluctuate. Increased demand may also decrease available funds.