Loan Repayment and Assistance Programs
Many law school applicants dream of using their law degree to serve the public interest. Whether you hope to represent battered women, advocate for the poor, or any one of the many other worthy public interest causes, a law degree can be an invaluable tool to help you affect other people’s lives. However, a law degree comes at a cost, and public interest positions generally don’t provide enough income to justify the expense.
The Basics of Loan Repayment Assistance Programs
Enter the various LRAP programs. Many law schools, along with the federal government, recognize the benefit of encouraging law students to use their degree to help the public. As such, many schools have developed programs to help offset the cost of attending law school. In fact, some graduates receive full repayment of the entire cost of law school!
In 2007, Congress passed the College Cost Reduction and Access Act. Two particular sections of the act are important for public interest candidates: Income Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF.)
Income Based Repayment Programs
IBR is a program that allows students to pay back federal student loans based upon their income and family status at the time of repayment. There is a set formula to determine the payments and it can be accessed at https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action. Note that the IBR program is available to all graduates, regardless of whether they are working in a public interest position or not. More information on the IBR program can be found on the federal student aid website at http://studentaid.ed.gov/repay-loans/understand/plans/income-based.
Public Service Loan Forgiveness
PSLF offers complete loan forgiveness after a graduate has made a fixed number of payments. For graduates working in public interest positions, this happens after 10 years; for all other positions, after 25 years. See http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service for more information on the PSLF program.
Combining the IBR and the PSLF can be very attractive for a public interest graduate. IBR allows the graduate to make the minimum monthly payment possible, and after 10 years of payments, when a significant balance still remains on the loan, the entire remaining balance is forgiven.
School Based Loan Repayment Assistance Programs
To take the incentive to work in the public interest to the next level, many schools have instituted their own Loan Repayment and Assistance Programs (LRAP.) These programs, which work in conjunction with the federal programs, typically cover the minimum monthly payments under the IBR program. Programs vary from school to school, but most have an income ceiling, below which the school covers the entire payment.
For amounts over the ceiling, many schools provide a partial subsidy, which disappears entirely once the graduate reaches a predetermined maximum income level. To qualify for LRAP, most schools mandate that the job require a JD, and that it is either a government agency or a qualified non-profit organization. For examples of LRAP programs, visit the Georgetown website at https://www.law.georgetown.edu/admissions-financial-aid/office-of-financial-aid/lrap/ or Berkeley at https://www.law.berkeley.edu/194.htm.
As a result of these programs, when a law student graduates from law school having borrowed federal funds to cover all of their expenses (including a laptop and bar prep course) and then works in public interest law, the situation is far from dire: in the best case scenario, the law school will reimburse them for their monthly IBR payments through the LRAP program, and the entire loan balance will be forgiven after 10 years by the PSLF.