Finance Friday: What's an LRAP?
If you're thinking about going to law school and then entering into a career in the legal public interest or public service path, you're also probably worried about how you'll be able to pay off your law school loans.
With many students graduating law school with a loan burden of $80,000 or more, and public interest/public service jobs starting anywhere from $40,000 to $50,000, your worries are well founded. However, law schools (and state bar associations, some states, and the federal government) have responded to this financial conundrum by creating Loan Repayment Assistance Programs--LRAPs--for law school graduates entering the legal public interest and public service workforce.
What exactly are these LRAPs, and how can they help you cope with your law school debt burden?
Let's start first with what the ABA's Standing Committee on Legal Aid and Indigent Defendants (SLAID) has to say about LRAPs:
Loan repayment assistance programs ("LRAPs") have emerged as a solution for relieving the debt burden of some law graduates. LRAPs provide loan repayment or forgiveness, lower interest rates on loans, or postponed payment of law school loans to graduates entering specific types of employment, usually law-related public interest jobs. Most LRAPs contain limits on the amount of income a recipient can earn while participating in such a program. There are various types of LRAPs, administered by law schools, state bar associations and foundations and federal and state governments, providing debt relief to some law graduates. The number of these programs has begun to increase recently, but still do not meet most of the need of many attorneys who would like to work in public interest.
So how exactly do these programs work? Let's take a look at the basics for some of the different LRAPs out there:
Georgetown University Law Center
Georgetown Law students who work for U.S.-based government agencies or nonprofit 501(c)(3) organizations for 10 years after graduation in a legally related capacity (JD degree must be preferred or required), and whose incomes remain less than $75,000*, can borrow the entire cost of attending law school in the form of federally-guaranteed loans and have all of their loan repayments reimbursed by Georgetown Law and the remaining principal balance forgiven by the federal government. Georgetown Law benefits would continue on a diminishing basis for incomes exceeding $75,000.
Yale Law LRAP: The Career Options Assistance Program
In order to allow YLS alumni to choose jobs without having to worry about student loans, COAP is designed to assist graduates with their loan payments. COAP grants are calculated based on a graduate’s household income, indebtedness, and an imputed loan repayment schedule.
First, the graduate’s household income is adjusted to deduct retirement savings, childcare costs, etc. For graduates whose adjusted income is less than the “threshold” level ($60,000), COAP covers their entire imputed loan payment. Graduates who earn more than $60,000 annually are expected to contribute 25 percent of their income above $60,000 to their loan repayment. Unlike many programs, COAP grants cover not only loans for Yale Law School, but also some need-based undergraduate educational loans as well.
* A graduate with an adjusted income of $41,000 (below the $60,000 threshold) and annual imputed loan payments of $10,000 would receive the full $10,000 from COAP.
* A graduate with an adjusted income of $65,000 and the same $10,000 in annual payments would be expected to contribute $1,250 (25 percent of the $5,000 above the $60,000 threshold), and so would receive an award of $8,750.
For a listing of all schools with LRAPs and links to their respective programs and applications, you can check out the ABA's Directory of Law School Public Interest and Pro Bono Programs.
Essentially, graduates going into an array of public service and public interest options can get help from their law schools in the form of "awards" or "forgiven loan payments." The types of jobs that qualify for this kind of assistance vary; some schools have restrictions on the types of jobs that they will consider eligible (Georgetown Law, for example, lists Asylum Aid, The Children's Law Center, Catholic Legal Immigration Network Inc., Legal Aid, Public Defender Offices, Washington Legal Clinic for the Homeless, Rocky Mountain Legal Defense Fund, ACLU, District Attorney, and County Prosecutor as some examples of eligible employment), while others (such as Harvard Law's Low Income Protection Plan (LIPP)) provide assistance to all graduates.
In addition to the law school-specific LRAP, the federal government also has loan repayment assistance available in a variety of forms, most recently new regulations discharging any remaining federally-guaranteed loans after 120 consecutive loan payments (10 years) made while employed in public service. This is a huge boon that, combined with the law school LRAP, can significantly lighten the load for law graduates seeking public interest or public service employment.
In addition, the armed forces also provide some assistance. The U. S. Army has an entire website devoted to educational loan management and their Loan Repayment Program, as does the Judge Advocate program.
LRAPs are a great source of assistance for those students seeking to enter into the public sector after law school. However, requirements for each law school's program definitely vary, and you should contact the Financial Aid Office of the schools you are interested in (or currently attend) in order to determine exactly what you have to do to be eligible. Don't just stop there, though. Make sure to also ask about federal and state-sponsored programs, as well as scholarships and grants that may be available.
Law schools pride themselves on the number of students that choose to go into public service, and they will do all they can to help these students out financially. If public service or public interest work is your dream, don't let finances stop you. Seek help--it's out there, and easier to find that you may think.