Comparing Loan Repayment Assistance Programs (LRAP) for Law Schools
If you are planning on heading to law school, you are likely concerned about the cost. Most law students need to rely on some type of aid to get them through the program. Law schools provide aid to exceptional students who have also scored well on the LSAT upon acceptance to the school. Yet, these grants, scholarships, and fellowships are typically merit-based and highly competitive.
Not all is lost if you do not qualify for aid at the beginning of your law program. Law schools also offer back-end aid through loan repayment assistance programs (LRAPs). This quick guide offers a broad overview of different types of LRAPs and how they work, so you know how to compare them and make the best choice for your circumstances.
What Is an LRAP?
Law schools, all over the United States, have Loan Repayment Assistant (LRAP) programs that are available for every prospective law student. Loan Repayment Assistance Programs began five to ten years ago in an effort to provide financial aid to law school graduates who go into lower-paying legal jobs. Not all Loan Repayment Assistance Programs are created equally, however. Some LRAP Programs are more strict than others on the type of employment you can have, eligible loans, and duration of the program.
Eligible Jobs Under an LRAP
Most LRAP Programs cover employment in the public sector, including government and non-profit work. Some programs cover public-interest work at for-profit organizations, and an even smaller number of programs also cover private-sector legal jobs under a certain income threshold. For schools that mainly cover jobs in the public sector, some programs have defined eligible jobs as those which would also qualify for the Federal Public Services Loan Forgiveness Program. According to PSJD, “in the seven years since the federal loan forgiveness and repayment legislation was enacted, law schools have restructured their existing LRAPs to coordinate with the Federal Forgiveness Programs.”
The following are the requirements for complying with the Federal Public Services Loan Forgiveness Program:
Employed by a United States organization - whether a federal, state, local, tribal, or a non-profit organization;
Works full time for that agency or the organization;
Has direct loans;
That such loans are paid under an income-driven repayment plan; and
That the applicant must make at least 120 qualifying payments.
Programs that do not mirror the Federal Public Services Loan Forgiveness program do not always require applicants to work full-time. Some LRAP programs cover part-time employment as well as special circumstances such as medical or family leaves of absences.
Schools that follow a non-PSLF structure often build in an income-based repayment model. For example, schools that follow this model will pay a proportion of a graduate’s loans based on their income until the graduate’s income exceeds a pre-set threshold.
Harvard's LRAP, called LIPP (Low Income Protection Plan) is one of the broadest programs among the top 14 law schools. LIPP, like others in the top five, offers a wide range of eligible jobs. LIPP covers the following:
All public sector, government, and academic jobs, regardless of whether they are law-related
Law-related private sector jobs with companies such as for-profit academic institutions and salaried legal counsel for businesses
Yale's LRAP program covers all employment. Other top-five law schools typically only cover law-related employment in their LRAP programs but sometimes include political campaign work.
Personal Finance After Law School for Those in an LRAP
The differences in the way each LRAP program works once you graduate law school and enter the workforce can greatly impact your personal finances. Some important factors to consider when comparing LRAP programs for law schools include:
Eligible Debt. Stanford's LRAP program, as of 2020, covers all need-based loans at all levels of education, with no limit. This is not the norm. Most law schools LRAPs only cover debt accrued at their institution. Some law schools also allow for bar loans, typically for up to $10,000.
Repayment Schedules. Most repayment schedules are 10 years and require graduates to be on Income-Based Repayment (IBR). The few schools that do not require IBR participation, still use it as a basis for calculating their monthly contribution to debt. Although numbers vary among law schools, those who make less than $50,000 per year typically do not have to make payments. Some schools have higher income floors at $75,000 to $100,000 before their LRAP requires them to make payments.
Income Requirements. LRAP programs have varying income caps for eligibility. Among the top five law schools, only Chicago has an income cap, which is $80K. Among the top 14 law schools, income caps range from $75,000 to $100,000.
Assets. Each law school figures your income differently for the purposes of repayment, especially when it comes to how they treat personal assets. For example, Stanford counts any assets over $130,000 as income, Chicago simply uses your Adjusted Gross Income (AGI) from your taxes, and Duke assesses anything over $15,000 as income. The vast majority of T14 schools do not offer asset allowances.
Marriage Status. If you are married, the law school you choose may or may not count your spouse's income. If your spouse makes less than you, many times schools do not count the income, but this is not always the case.
Dependents. Some law schools allow for income deductions if you have kids. Among the top five law schools, Yale, Stanford, and Harvard offer $8,000 deductions per child. Many T14 schools do not offer dependent deductions.
Choosing the Right LRAP for Your Circumstances
If you intend on funding law school with the help of a LRAP, you need to have a strong understanding of the programs that can benefit you in specific circumstances. Keep in mind that policies change and numbers change from year to year, but based on the most recent information, I've provided programs you should review carefully based on some specific scenarios:
You Have One or More Children
I mentioned above that the top three law schools provide income deductions for dependents. If you are choosing other law schools in the top 14 or looking for a safety school, LRAP programs at the following schools provide at least $5,000 per child in an income deduction:
Northwestern University
Duke University
University of California-Berkeley
You are Married and Your Spouse Makes More
If you are married and your spouse makes more than you, the vast majority of law schools add your spouse's income to yours and divide by two to calculate your income. The following law schools do not factor your spouse's income into their calculations.
University of Pennsylvania
University of Michigan
Cornell University
Georgetown University
PRO TIP: You should file taxes separately to ensure you keep you and your spouse's income separate to avoid any issues.
You Are an Older Student Who Has Accumulated Assets
If you have accumulated assets throughout your earlier years, the vast majority of law schools use them to calculate income. In some cases, student loan balances offset your income, so they truly look at net worth. The only schools that offer any kind of asset deduction among the top 14 law schools are:
Duke University
Yale University
Harvard University
Stanford University
The above are only a few examples of personal circumstances that might influence your law school and LRAP applications. If you have further questions about where you should apply to law school or need assistance to weigh the financial implications of attending certain law schools, don't hesitate to contact me.