Loan Repayment Assistance Program (LRAP)
Each year graduates with federal law school debt who secure and maintain eligible positions earning a salary up to the cap may apply for loan repayment assistance. For tax purposes, this assistance comes in the form of a forgivable loan. Graduates who are deemed eligible for the LRAP will be required to sign and submit a promissory note for the total amount of the loan assistance offered. This loan will be forgiven at the end of the year as long as the graduate completes the required nine months of full-time work, as explained below. The University of Chicago Law School LRAP works along with the Income Based Repayment (IBR) and the Public Service Loan Forgiveness (PSLF).
Employment Covered by LRAP
A graduate must be a paid full-time employee working at least nine months in the calendar year in which the assistance is requested. A graduate must be: (a) engaged in the full-time practice of the law, or in a position normally requiring a law degree; (b) working for the public interest broadly defined; and (c) working for a non-profit organization, defined as a 501(c)(3), government office, or judicial clerkship, other than academia. Graduates who participate in the University of Chicago post-graduate fellowship or public service initiative programs are also eligible for funding through LRAP.
Graduates employed by the Law School, or those with unpaid positions such as internships and volunteer positions, do not qualify for assistance. Those with questions about eligible positions should contact the Financial Aid Office.
All federal loans processed by the University of Chicago Student Loan Administration (SLA) and used to cover the standard cost of attendance at the Law School will be considered eligible debt. Private alternative loans, personal loans, credit card, and consumer debt are not covered under LRAP. Educational loans acquired at other institutions are also excluded.
Please note: All loans must be in good standing and in active repayment.
Required Repayment Plan
LRAP requires participants to place all of their eligible debt into Income-Based Repayment (IBR) offered by the Department of Education. Graduates who participate in IBR are never required to pay more than 15% of their discretionary income towards their loans. LRAP will not cover loan payments for loans placed in other repayment plans.
All participants with qualifying employment and salaries will be eligible to participate in the Law School's LRAP for ten years after graduation. These years do not need to be contiguous; a graduate may enter and exit the program at will. However, to reenter LRAP, graduates must continue to be enrolled in IBR.
Graduates with incomes up to $80,000 will be considered eligible, provided they meet all other requirements. The income cap considers only the applicant’s income and excludes all assets and spousal income.
The Law School will offer an annual loan equal to the amount of the total eligible yearly IBR payments. A participant will never be awarded more than the amount that he or she is required to pay by the Department of Education. Extra payments towards loans will not be supported under LRAP.
Federal Public Service Loan Forgiveness (PSLF) Program
Graduates who secure and maintain positions that are eligible for PSLF will have their remaining debt discharged after ten years (120 on time payments) under PSFL. Graduates combining IBR and PSLF with the Law School's LRAP can have no loan debt without making any loan payments.
Negative Amortization Assistance
Graduates who choose to exit IBR will be subject to negative amortization by the Department of Education. This means that there will be an increase to the outstanding debt balance. Depending upon when a graduate exits, this could be a significant amount added to their debt load. To assist with this issue, the Law School will offer graduates who have completed at least five years of public service in LRAP a one-time $10,000 payout. Clerkship years are included in the five years required for the payout.
PLEASE NOTE: 2011 and 2012 graduates are able to choose between the Hormel Public Interest Program (HPIP) and LRAP. If you are a recent graduate, and are unsure about which program to apply for, please contact the Financial Aid Office.
IMPORTANT: If you need to consolidate your loans, please note that Direct Lending is estimating a wait of 8 weeks. It is important to contact them as soon as possible if you need to have them process any paperwork for you.