Seattle University School of Law Loan Repayment Assistance Program (LRAP) application information and forms for the 2012-13 LRAP year are available. The 2012-2013 LRAP application deadline is April 1, 2013. The application information is below (click on Application Instructions).
Consistent with the Seattle University School of Law mission of preparing students who are committed to contributing to the common good by shaping an equitable legal system, Seattle University School of Law established a Loan Repayment Assistance Program (LRAP). The LRAP is premised upon assisting graduates who choose full time public interest legal careers and are licensed attorneys. The program mandates that employment be (a) law related and (b) public interest in spirit and content. The position must substantially utilize the legal training and skills of the graduate. The graduate must work for a non-profit entity that is dedicated to social justice, access, and non-discrimination and that has as one of its primary purposes the goal of providing legal services to or on behalf of persons or organizations that either could not otherwise afford such services or who are underrepresented in the legal system.
Seattle University School of Law will lend eligible applicants an estimated $3,000 each in LRAP funds to help meet the repayment of specified law school loans. If the graduate remains in qualifying public interest employment for at least one year after receipt of the loan, the loan made by the Law School will be forgiven.
The qualifying income limit is a maximum of $54,000 annually. In the case of married graduates, the income figure used for calculations will be either the graduate's income or one-half of the joint income, whichever is higher. In the event that both parties are eligible for LRAP, income and debt will be treated separately, or as one-half of the total income and debt for each spouse.
In October the College Cost Reduction and Access Act of 2007 (HR 2669) was signed into law.
This is good news for those in nonprofit or government careers, including public interest law services. It puts an annual limit on loan payments for borrowers with high educational debt compared to income level and helps borrowers who are employed in eligible public service make affordable monthly payments over a period of typically 10 years. After 120 on-time payments in an eligible repayment plan while in eligible employment, the federal government will forgive the eligible federal educational debt that remains (tax free).
It allows borrowers of Stafford, Perkins, Grad PLUS and Federal Consolidation (consolidation loans may not include any undergrad parent PLUS) loans to repay their loans on the basis of the income at the time of repayment (income-based repayment).
Income-Based Repayment and Pay As You Earn Repayment Plans
The following repayment plans are the optimum plans to consider for loan forgiveness, either after 20 or 25 years or after 120 eligible payments under the Public Interest Loan Forgiveness program.
Pay As You Earn (PAYE) is a repayment plan based on 10 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply), family size, and loan debt. After 20 years of repayment, any remaining balance on the loan will be forgiven, but you may have to pay taxes on the amount forgiven. You must be a new borrower after 10/1/07 and received a Direct Loan disbursement after 10/1/11. It is an eligible repayment plan for federal Public Interest Loan Forgiveness.
Income Based Repayment (IBR) is a repayment plan based on 15 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply). After 25 years of repayment, any remaining balance on the loan will be forgiven, but you may have to pay taxes on the amount forgiven. It is an eligible repayment plan for federal Public Interest Loan Forgiveness.
Public Service Loan Forgiveness
Public Interest Loan Forgiveness cancels the balance of any interest and principal due on any Federal Direct Loan - including Direct Stafford, Direct PLUS, or Direct Consolidation Loan - that is not in default for borrowers who:
- have made 120 monthly payments on a Direct Loan in a PAYE, IBR, income contingent or a standard repayment plan based on a 10-year repayment schedule
- are employed in a "public service job" and has been employed in a public service job during the 120 payment period.
A public service job is defined as a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education, social work, public interest law services, child care, public library sciences, or any other job at an organization that is described in section 501(C)(3) of the Internal Revenue Code of 1986.
Please note this is valid only with Federal Direct Loans, such as offered at Seattle University School of Law. However, if you have FFELP Stafford loans or FFELP consolidated federal loans (through a lender other than Direct Loans), you may reconsolidate into a Direct Loan (www.loanconsolidation.ed.gov) for the purpose of federal loan forgiveness.
Excellent resources with more information may be found at http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service, , http://myfedloan.org/, and askheatherjarvis.com.
If you have questions regarding the Seattle University School of Law LRAP, please e-mail the LRAP Committee at firstname.lastname@example.org or call Student Financial Services at 206.398.4250.
There are a variety of loan repayment options available that are discussed here: http://studentaid.ed.gov/repay-loans#repayment-plans or http://www.law.seattleu.edu/x1224.xml. However, only the Pay As You Earn (PAYE), Income Based (IBR), Income Contingent or 10 year Standard repayment plans qualify for public service loan forgiveness. We recommend you consider PAYE or IBR.
Federal Public Interest Loan Forgiveness documents are now available!
Alumni working in this area should note it's important to keep track of your on-time and eligible payments (in the right repayment plan) and eligible employment for 120 payments. This site by Heather Jarvis is a great resource. See http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp for more information on this program.