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USF Keta Taylor Colby Public Interest
Loan Repayment Assistance Program (LRAP)
Option 2: Income-Based Plans

The purpose of the LRAP program is to assist recent University of San Francisco (USF) School of Law graduates with their educational loan repayment to enable their pursuit of law careers in the public interest. The program offers qualified participants short-term loans which are forgiven at the end of the calendar year if all terms are met.

LRAP Option 2 (Income Based Plan): Guidelines and Terms for 2015 Funding

Only option available for students who began law study in Fall 2013 or later.

Eligibility

  1. New applicants must be alumni of the USF School of Law who received their Juris Doctor degree within the last five years, (i.e., Dec. 2009 through May 2014).
  2. Assuming continued eligibility and availability of funding, participants are eligible for recertification of funding for a maximum of four years. Recertification requires submission of a new LRAP application and all relevant documents in a timely manner each year.  The amount of a recertified loan award may change from year to year.
  3. Alumni with gross incomes of $65,000 or less are eligible to apply for LRAP. Those earning more than $65,000 who feel there are extenuating circumstances must submit a “petition for a waiver” for consideration by the Social Justice Committee, which oversees the LRAP program. The petition must explain their circumstances and be accompanied by relevant supporting documentation. Relevant factors include, but are not limited to: the need to provide financial support for others; expenses for dependents; and lack of alternative sources of support (assets or family assistance). An area’s cost of living is relevant in combination with other factors but will not, on its own, justify a waiver. Please provide detailed budget information to assist the Committee’s deliberations. (Note that LRAP’s calculation of gross income takes into account the income of partners with whom the applicant shares expenses, as explained below, and that information about household burdens and income is relevant to our consideration of waivers for applicants with such partners.)
  4. For the purposes of determining the eligibility of a graduate who has a spouse, domestic partner, or anyone else who contributes significantly to household income, the Committee uses an annual gross income figure. The gross income shall be the higher of: (1) the applicant's annual salary; or (2) the two salaries combined and divided in two. The partner's income will be reduced by the annual amount of the partner’s student loan debt repayment. Modifications to this calculation will be considered for special circumstances, which must be explained in detail. Note that the School of Law’s approach to determine eligibility differs from the IBR program’s approach to determining eligibility and monthly payments.
  5. The allowance for children, non-earning spouses, or other dependent family members is $5,000 per dependent, which will be deducted from the total household income for purposes of determining the eligibility and amount of LRAP funding.
  6. Applicants must be engaged in public interest work. Public interest work is defined as any work providing legal assistance to poor or under represented people or interests, or work in support of peace and social justice issues.
    1. Preference will be given to applicants working at not-for-profit agencies as defined by 501(c) (3) of the federal tax code, as well as to individuals working in and on behalf of under-represented or impoverished communities.
    2. Government positions providing legal assistance to the poor or under represented will be considered. For other types of government employment, eligibility shall be determined by the Committee on a case-by-case basis, and the applicant must include information in their personal statement detailing how their work serves the public interest.
    3. Individuals working on environmental issues will be considered.
    4. The eligibility of private public interest employment shall be determined by the Committee on a case-by-case basis. The employer must submit written verification of the nature of the applicant’s work and the percentage performed on a pro bono, reduced, or court-awarded fee basis. Detailed supporting documents may be required to determine eligibility.
  7. A program participant must engage in law-related work to be in and remain eligible for the program. To qualify as “law-related,” the applicant’s legal education must have contributed substantially to the applicant’s ability to obtain and/or perform the job. Jobs that are equally available to non-lawyers or that do not require legal skills do not qualify as “law related”.
  8. A program participant must work at least two-thirds (2/3) time in paid public interest work to be in and remain eligible for the program. Exceptions to the two-thirds time requirement may be made to provide some funding to participants who can only work part time. This includes participants who are caring for children or other relatives, etc. If funding is provided for part-time work, it will be proportional to the amount worked.  Applicants who must work part-time must provide a statement explaining the circumstances.                            
  9. An applicant’s loan repayment must be up-to-date. However, applicants who are not current in their payments may apply for LRAP and be considered on an individual basis. Applicants who are not current should include, in their application materials, full information about the loans that are not current, the reasons for their status, and the steps they have taken or intend to take to make them current. They must also contact the Assistant Dean for Academic Services at the School of Law for loan counseling.
  10. The eligible income level (currently $65,000) may be adjusted in future years to take into account increases in the cost of living.

Educational Loan Repayment Options / Loan Consolidation

  1. Option 2, Income based applicants are not required to enroll in the federal loan forgiveness and/or the income based (IBR or PAYE) plans. However, under Option 2, the School of Law will compute loan repayment obligations as though the applicant were enrolled in IBR, PAYE, or other similar programs (using the School of Law’s approach to borrowers with partners and dependents as discussed under Eligibility Guidelines #4, #5 above). 

    Note: Option 2 applicants are not required to enroll in IBR or PAYE because low-income borrowers in these plans confront the risk that the monthly payments will be less than the monthly interest due, which could cause the principal to increase. That is less of a concern for those who intend to practice public interest law for ten years and have their loan forgiven. It is, however, a factor that those practicing public interest law for less than ten years should consider before enrolling in an income based repayment plan. 
  2. For educational loans which offer flexible monthly payments (i.e. borrowers can  adjust their monthly repayment), LRAP funding eligibility will be based on past payment history. If monthly payments are reduced during the award period, the full amount of the LRAP award must be used to repay the educational loan(s) during the period in which it was disbursed, i.e. January-June or July-December. If monthly payments decrease during the first disbursement period, the second disbursement amount will be reduced to reflect this new payment pattern.
  3. If participants consolidate their loans, and decrease the amount they pay per month towards educational loan debt, LRAP funding eligibility will be based on the actual monthly payment for the consolidated loan. If consolidation takes place during the award period, the second disbursement amount will be reduced.

Qualifying Educational Loans

  1. Government-guaranteed loans such as Stafford, Graduate Plus SLS, and Perkins qualify for IBR and for School of Law repayment of IBR-based debt. University of San Francisco loans and private educational loans (i.e., Law Access and Law Loans) also qualify for the loan repayment program, but will be considered only if the applicant received these private loans after exhausting his/her federal loan eligibility. Loans from friends and relatives are not eligible. As USF financial aid policies and government loan availability and amounts change, the Committee will reexamine its policies for determining qualifying loans. Note that USF’s LRAP funding formula for private loans differs from the funding formula for income based eligible debt. (See Amount and Disbursement Guideline #2 below.)
  2. Government guaranteed and private undergraduate loans that meet the conditions noted above, also qualify for the loan repayment assistance program.

Application Process

  1. The applicant must submit a completed USF LRAP Application and provide all supporting documentation in a timely manner.
  2. Applications and all relevant documents are due by October 6, 2014.
  3. The Committee will determine each person’s funding based on the merits of his/her application and funds available.

Amount and Disbursement

  1. Income Based Repayment (IBR) or Pay As You Earn (PAYE) Eligible Loans -- federal or federally guaranteed loans: 
    1. For participants with adjusted gross incomes under $50,000 per year, the LRAP program may cover up to the full amount of the IBR or PAYE repayment.
    2. Participants with adjusted gross incomes between $50,000 - $65,000, will be expected to contribute a minimum of 35% of their income which exceeds $50,000 to loan repayment. The School of Law may cover the remainder or portion thereof.
    3. Depending on the number of eligible applicants and the amount of money available for distribution, awards may be capped. In any event, awards are generally capped at $10,000 per year.
  2. Private Loans:  If law school and undergraduate private loans were obtained because the applicant had no alternative to taking out private loans, their repayment will be covered to the extent sufficient funds are available and subject to the terms below:
    1. Participants could be required to pay up to 10% of their income toward loan repayment (including their contribution to the income based payment (if any), and private loan repayment. 
    2. If the participant’s total payment into IBR/PAYE and private loan repayment exceeds 10% of income, the School of Law may cover the remainder (up to $10,000 per year and to the extent sufficient funds are available).
    3. If the total participant payment for IBR/PAYE and private loan repayment is less than 10% of income, the School of Law may fund the IBR/PAYE payment pursuant to the IBR/PAYE coverage described in #1 above. The participant will be responsible for private loan repayment. 
    4. An applicant’s assets will be considered in determining the amount awarded.

3.  LRAP funding for 2015 will apply to educational loan repayment due from January 1 through December 31, 2015. Disbursed funds must be used in full to repay eligible loans during the period it was disbursed or returned to the School of Law. See LRAP Repayment section below.

4.  LRAP funding by the school is provided in the form of a short-term loan that the school will forgive for qualifying participants at the end of the calendar year. (See below for further information about the law school’s loan forgiveness.) The loan is payable in two disbursements: January 15 and July 15. Disbursements on these dates are contingent upon the participants’ continued eligibility, confirmation of education loan repayment, full and timely application of award to repayment and timely submission of required documents. Participants must sign a promissory note which obligates them to repay the loan amount on a prorated basis if they exit the program during the funding year. 

5.  Awardees must submit the following completed forms to the program administrator to receive the first disbursement:

  • LRAP Agreement
  • LRAP Promissory Note

To receive the second installment, awardees must submit these completed documents:

  • A “request for second disbursement” form
  • An updated employment verification form dated between June 1-15
  • Confirmation of current repayment of educational loans
  • If an award amount is adjusted due to a change in qualifying circumstances, an updated LRAP promissory note will be required.

Failure to submit any required documents in a timely manner could result in forfeiture of the award.

LRAP Forgiveness

  1. Program participants must work in qualifying employment for the calendar year covered by the LRAP award and apply the full amount toward loan repayment to obtain forgiveness for the award. Prior to loan forgiveness, the participant must verify that s/he has remained in qualified public interest work by submitting an Employer Verification (See Eligibility Section) and that his/her educational loans are in current repayment. 
  2. Although current law has been interpreted to exempt taxation on Law School loans funding student loan repayment for those engaged in public service, recipients are encouraged to consult a tax expert to determine their tax liability.

LRAP Repayment

  1. If a participant no longer qualifies for the program during the calendar year due to a change in or loss of qualifying employment, then the LRAP loan intended to cover the non-qualifying months must be repaid to USF School of Law.
  2. If the recipient becomes unemployed during the award period, his/her unique circumstances will be considered by the School of Law in determining the amount, if any, that must be repaid. The recipient must contact the USF LRAP administrator promptly and submit a detailed explanation to receive such consideration. 

LRAP/Social Justice Committee

The Social Justice Committee establishes the Loan Repayment Assistance Program guidelines and reviews them on an ongoing basis. The Committee examines applications, selects recipients and determines the award amounts. Committee members are appointed by the Dean pursuant to the Faculty By-laws. The student members are selected by the Student Bar Association. The Assistant Dean for Academic Services serves as the LRAP program administrator 

Reporting Requirements

  1. It is the responsibility of each LRAP funding recipient to keep the Assistant Dean for Academic Services informed of any changes relating to his/her work status, salary, address (both street and email), and telephone number.
  2. Recipients of LRAP funding may be asked to return to the School of Law to make presentations to students and/or faculty and/or write a description of their work in the public interest. These efforts will help to increase awareness of the program, stimulate interest in public interest work, and potentially assist the Law School in raising funds for the program.

Retroactive Application to Current LRAP Participants

The changes in the guidelines for the LRAP 2015 funding year apply to those seeking continuing funding as well as new applicants. The Committee reserves the right to change the guidelines.

Updated July 2014