Loan Repayment Assistance Program (LRAP) Policies and Guidelines
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 has established a Loan Repayment Assistance Program (“LRAP” or “the program”). The LRAP is designed to provide financial assistance to graduates who accept lower paying public interest employment but who require assistance repaying high educational loan debt.
For those graduates who take traditionally low-paying public interest positions and have substantial educational debt, Seattle University School of Law will lend eligible applicants an estimated $3,000.00 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 and maintains applicable student loans in good standing, the loan made by the Law School will be forgiven. Applicants may apply annually for a total of five years of LRAP funding.
Neither the existence of the program nor the formula used by the program is guaranteed. The program may be adjusted as the program budget, participation rate and indebtedness of participants change. Participants may receive more or less funding in succeeding years. Limited funding is allotted by awarding the same percentage to eligible, on-time applicants.
The advantage of a loan repayment forgiveness program over a grant program may be that the payments to the recipients are not taxable as income. Under current law, IRS Code section 108(f) has been interpreted to exempt from taxation student loans that are canceled for citizens in public service employment. It is recommended that recipients consult a tax advisor.
LRAP is premised upon assisting graduates who choose full time public interest legal careers and are licensed attorneys. We define Public Interest Law as work using legal skills that is intended to:
- secure justice for disadvantaged and underserved individuals or communities;
- assert, protect and defend human rights, civil rights and civil liberties;
- preserve and protect the world’s health and resources for the benefit of the public good
Private sector work generally is not considered public interest work, nor is pro bono work at private firms. However, private firms that provide substantial public interest work may be considered on a case by case basis.
Government employees, prosecutors and district attorneys, judicial clerks, the self-employed, employees of Seattle University and members of the military are not eligible for this program.
Length of service in qualified employment may be considered as a factor in determining qualified applicants.
Final determination of qualifying employment will be made by the LRAP committee.
Only Seattle University School of Law graduates may apply for the LRAP; students may not apply until they have graduated and are licensed attorneys.
The LRAP program is open to all eligible Seattle University School of Law graduates. All eligibility requirements pertain regardless of graduation date. The funding is for the application year only and is not retroactive.
Ordinarily, graduates must begin and maintain public interest employment directly out of law school, with the exception that graduates are extended eligibility until immediately after completion of judicial clerkships, fellowships, parental leave, or other comparable factors.
If available, graduates must first take advantage of other LRAP programs (e.g., federal, employer and state programs).
Eligible law school debt cannot exceed the total institutional cost of attendance for the applicant’s in-school years (with the exception of a bar loan, if applicable). The “total institutional cost of attendance” is set by the Law School at the start of each academic year, and includes tuition, books, and living expenses.
LRAP awards are intended to assist in the repayment of loans for law school expenses that were disbursed under institutionally approved and certified loan programs, including federal Stafford loans (both subsidized and unsubsidized), federal Perkins loans, federal Grad PLUS and supplemental private loans. These supplemental private loans will be included only if the budget for the program allows, after first taking account of Stafford and Perkins loans.
Personal loans from banks or from family members, and credit card and consumer debt are not covered by LRAP, even when used to finance legal education. Other loans not covered are commercially available educational loans not certified by Student Financial Services, including Direct to Consumer loans, and loans taken out by parents to finance a student’s education.
For joint-degree programs, only the Law School portion of the joint-degree debt is covered.
The LRAP does not cover educational indebtedness from undergraduate education or from any other graduate education.
The qualifying income limit is a maximum of $54,000 annually.
Income to be included for purposes of LRAP benefits calculation includes adjusted gross income (AGI) as determined by the required year federal IRS tax form, plus any untaxed income and voluntary retirement contributions. The calculation allows the same deduction for dependents as allowed on the applicant’s income tax return. Consideration for other deductions (such as medical) must be reflected on Schedule A of IRS 1040. LRAP reserves the right to adjust eligibility as it sees fit, due to significant assets.
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, their income and debt will be treated separately, or as one-half of the total income and debt for each spouse.
Income documentation includes the federal IRS tax form for the required year and income verification from current employer.
The income maximum will be reviewed periodically. Factors considered in adjusting the income ceiling of $54,000 are the inflation rate and the average starting salary at public interest agencies.
Eligible applicants notified
Promissory note due
LRAP funds disbursed
If a participant works in qualifying employment within the LRAP guidelines for at least one year after the June funding is disbursed and maintains all applicable student loans in good standing, the participant’s LRAP loan will be forgiven after June 30 the following year. Prior to loan forgiveness, the participant must verify that they have remained in qualified public interest work and that their educational loans have remained in good standing by submitting a LRAP Employer Certification for Forgiveness Form and LRAP Lender Verification for Forgiveness Forms.
If a participant exits the program because they discontinue qualified employment, the LRAP loan must be paid back in full. However, if a participant remains in qualified employment for at least six months, a percentage of the loan must be returned and a portion will be partially forgiven.
Although current law has been interpreted to exempt taxation on forgivable student loans for public service employment, the receipt of an LRAP loan may create taxable income in the year of receipt or in the year that any loan amount is forgiven. Recipients are encouraged to consult with a tax expert to determine their tax liability throughout the program.
Repayment Due to Ineligibility
If a participating graduate ceases to be eligible for the LRAP program, a percentage of the LRAP loans must be repaid depending upon what time frame the participant leaves the program. All participants who owe a percentage or all of their LRAP loans are under a legal obligation to repay these loans to Seattle University School of Law based upon their signed promissory note.
The interest rate during repayment will be set quarterly (January 1, April 1, July 1 and October 1) at the One Month LIBOR rate plus 3.5%.
Participants who are no longer eligible and neglect to repay their LRAP loan as required may be assigned to a collection agency. Participants will be liable for the original balance of their loan, any interest fees charged by the University and all fees in relation to the collection of the debt.
Leave of Absence
A participant in LRAP may request in writing, with appropriate documentation, a leave of absence of up to two years for maternity and parental leave, relocation, further legal education, disability or other such purpose as approved by the LRAP committee. Those leaving public interest work for private sector employment do not qualify for a leave, and will be required to begin repayment of their LRAP loans. The graduate who has been granted a leave will not be eligible for a program loan during the leave, but LRAP loans received prior to an approved leave need not enter repayment. Interest will not accrue on the LRAP loan during an approved leave period. If the participant does not return to the program within two years, the LRAP loans not eligible for forgiveness become payable.
Loan Consolidation Programs
Graduates may enter a loan consolidation program, but LRAP benefits will only contribute for a maximum of five years. Benefits may be calculated based upon the actual monthly payment amount under consolidation.
Prohibition of Default and Delinquency
All participants in the LRAP must be current on their loan payments and have no outstanding balance on a Seattle University account. Default and delinquency will disqualify an applicant from participating and will terminate any further assistance for that participant.
The Business Office and Student Financial Services shall administer the LRAP program.
The Dean, Associate Dean of Student Affairs, Associate Dean for Finance and Administration, and the Assistant Dean for Student Financial Services set the policy for the program. Major changes to the program will be reviewed by the Director of the Center for Professional Development, the faculty advisor of the Public Interest Law Foundation (PILF), a student representative who is a PILF member, and the Access to Justice Institute Director.
The LRAP committee shall consist of the Associate Dean of Student Affairs, the Associate Dean for Finance and Administration, the PILF faculty advisor, the Assistant Dean for Student Financial Services, the Director of the Center for Professional Development, the Access to Justice Institute Director, and may include an alumni representative at the appointment of the Dean.
LRAP funding includes but is not limited to the following sources:
- Reserve account interest.
- School of Law operational funds.
- Student, alumni, faculty, administration contributions.
- Other sources that may contribute to this program.
Graduates must apply for a loan each year, for a maximum of five years of LRAP funding, by the April 1 deadline date. Award amounts are subject to the availability of funds and the number of applicants eligible for an award in each award period.
The LRAP application requires the following:
- Completed LRAP Application.
- LRAP Loan Indebtedness Form.
- Cover letter expressing public interest/non-profit involvement.
- Current resume.
- LRAP Employer Certification Form demonstrating proof of employment with a qualifying organization and salary.
- Recent pay stub.
- Income verification of any additional sources of income from January 1 through December 31 for the most recent year as specified.
- A signed copy of the graduate’s (and spouse’s, if applicable) IRS 1040 with all schedules and attachments and W2s for the most recent year as specified.
- LRAP Lender Verification Form(s) from each loan program that lists educational debts, including payment status, the name of the servicer, the month and year each loan went into repayment, the total amount borrowed, unpaid balance and the dollar amount of the monthly repayment obligation.
- A signed agreement that the graduate will apply loan proceeds toward the repayment of law school educational debt, maintain educational loans in good standing, and promptly advise the LRAP Committee of any change in employment and/or financial condition.
- Permission to publish recipient’s name and applicable biographical information in Seattle University School of Law publications and in the press.
- A signed promissory note in the amount of the annual LRAP loan.
- Additional documentation as requested.
The selection criteria include, but are not limited to, the following:
- Qualifying public interest employment.
- Qualifying income.
- Length of service.
- Debt level.
- Receipt of other LRAP program funds.
Decisions made by the LRAP committee are final.
Participants must apply every year by the deadline. Once admitted to the program, it is the responsibility of the graduate to re-apply each year for renewal and provide updated information. Prior LRAP recipients do not receive priority in the selection process.
The Business Office will distribute LRAP funds. Loan funds will be disbursed on or about June 30 of the qualifying year. Recipients must sign an annual promissory note.
This publication is intended for the guidance of Seattle University School of Law administration, students and faculty. It sets forth in general the manner in which the Law School intends to proceed with respect to the LRAP program, but the University reserves the right to depart without notice from the terms of this publication. This publication is not intended to be and should not be regarded as a contract.
For answers to any questions you have about financial aid, please contact Student Financial Services at firstname.lastname@example.org.
Policy and Guidelines Revised November 6, 2007.