LRAP FAQs
Here are some answers to frequently asked questions. We also encourage participants to read the Program Description for a more thorough understanding of LRAP.
A. APPLICATION & ELIGIBILTY BASICS
C. DEBT & BENEFIT DETERMINATION
D. BENEFIT DISBURSEMENT & LOAN FORGIVENESS
F. PARTICIPANT RESPONSIBILITIES
A. APPLICATION & ELIGIBILTY BASICS
1. What is the Eligibility Period?
Participants must be NYU School of Law JD graduates to be eligible for LRAP benefits. Provided that all other Program conditions are met, participants may receive LRAP benefits for up to ten years following graduation.
The eligibility period begins upon the earlier of:
- the date the participant begins to repay his or her law school loans or
- January of the year following a May graduation.
2. When can I Submit my First LRAP Application?
You may submit an application at the quarterly entrance points listed here. Applicants must request access to the quarterly application by emailing the Office of Student Financial Services at law.lrap@nyu.edu.
The eligibility period for the majority of graduates begins in January; however, graduates may begin their eligibility and participation in the Program as early as the December following a May graduation if they have already begun loan repayment and provided that they meet all additional Program requirements.
For those graduates who graduate at times other than in May, the beginning of the LRAP eligibility period will be determined as appropriate considering the applicable loan grace periods but in no event earlier than six months following graduation.
3. Does the Program Offer Extensions to the Eligibility Period?
Participants may request Qualified Program Deferrals, to a maximum of 24 months, subject to the approval of the Program Administrator. Qualified Program Deferral periods will extend a participant’s eligibility period as otherwise defined above. The Program will consider requests for such deferrals for the following reasons: continuing education, economic hardship, involuntary unemployment, temporary disability and parental leave. Participants are not eligible to receive Program benefits during a Qualified Program Deferral period. Approval of a Qualified Program Deferral is at the discretion of the Program Administrator and the participant will be required to submit the request in writing and to submit such other documentation as may be requested.
4. When is the Annual Application Period?
Participants must apply annually to the program. The annual application period is from September 1 - October 15 of the calendar year prior to that for which benefits are being requested. Applications for the program are available at a secure online site. Please consult the website for the application enrollment periods and deadlines.
5. What are the Application Quarterly Enrollment Periods?
- First Quarter (Benefits for January, February, March) – you must apply during the annual application period – September 1st – October 15th.
- Second Quarter (Benefits for April, May, June) – Application period is February 1st – March 1st.
- Third Quarter (Benefits for July, August, September) – Application period is May 1st – June 1st.
- Fourth Quarter (Benefits for October, November, December) – Application period is August 1st – August 31st.
B. EMPLOYMENT
1. What are the Criteria for Qualifying Employment?
The following criteria are utilized to determine the eligibility of an applicant’s employment. ALL of the following criteria must be met for a graduate to be considered eligible to receive benefits from the Program:
- Participants must be full-time, paid employees (those who work 35 hours or more each week) in eligible positions, as defined below. Graduates in unpaid positions, such as internships or volunteer positions, are not eligible to receive benefits under the Program.
- Eligible positions include those in federal, state, and local governmental units (“governmental unit”) or domestic section 501(c)(3) and other not-for-profit organizations and international non-governmental organizations under the direction of a governmental unit or a section 501 (c)(3) organization.
- Eligible positions must “involve law,” as determined by NYU School of Law. Such positions typically require the employee to utilize his or her legal training to a significant degree, are positions that are often held by members of the legal profession (such as a policy position in government), and/or have a minimal educational requirement of a JD degree.
2. What if I Work for a Private or For-Profit Organization?
Applicants working in for-profit organizations may be eligible to participate in the Program but require special review and approval by the Program Administrator to ascertain whether the position is intended to further the practice of law in the public interest. It is expected that at least fifty-one percent of the work being done by the organization and graduate will serve underrepresented populations.
3. Does LRAP Cover Self-Employment?
Applicants who are self-employed require special review and approval by the Program Administrator. Please refer to the self-employment guidelines and supplemental self-employment application for additional information. Applicants should bear in mind that each self-employment situation is unique and requires individual assessment by the Program Administrator.
4. Does LRAP Cover Parental Leave or Have Provisions for Graduates with Children?
Participants graduating in 2005 and beyond who are the primary caregiver for their dependent child(ren) up to the age of six and who are working less than full-time may continue to receive LRAP benefits from the Program subject to the following conditions:
- Such participants working at least half-time in eligible positions will receive benefits based upon Qualifying Income (see section C.5. of Program Description) calculated at the full-time equivalent rate for the position, and subject to all other conditions of the Program. Such periods will be included in the calculation of eligible time in the Program for purposes of Loan Forgiveness and Repayment as set forth further in section E. below.
- Such participants on approved parental leaves under the Family and Medical Leave Act of 1993 may continue to receive benefits for up to six months based upon Qualifying Income calculated at the participant’s full-time salary immediately preceding such leave, and subject to all other conditions of the Program. Such periods will be included in the calculation of eligible time in the Program for purposes of Loan Forgiveness and Repayment as set forth further in section E. below.
C. DEBT & BENEFIT DETERMINATION
1. How Does NYU Determine What Loans are Covered by LRAP?
LRAP recognizes debt service only on law school student loans approved and recognized by NYU. Law school student loans include formal educational debt disbursed within certified student loan programs and used to fund educational expenses in pursuit of the JD degree. LRAP does not recognize other debt including parental loans, personal loans (from financial institutions or individuals), consumer debt (including credit card and home equity loans). Loans to cover bar-related expenses up to $10,000 may be covered if all other criteria are met for determining qualifying debt.
The amount of debt qualifying for consideration by the Program (“Qualifying Debt”) is the lesser of:
- The original principal of the participant’s actual law school loans (“Actual Debt”), as defined above, or
- An amount equal to three years (six semesters) of the standard student expense budget less aid received and less the student contribution calculated according to NYU’s institutional formula (“Maximum LRAP-Eligible Debt”)
- Summer earnings in excess of $15,000 per summer which were received during the period in which the participant was in school or in the summer immediately following graduation are deemed to be an addition to the student contribution.
2. Does LRAP Cover Bar Loans?
For purposes of determining Qualifying Debt, the standard student expense budget may be increased by up to $10,000 to cover bar study loans for students with demonstrated need as determined by NYU. Such determination of need must be made prior to receipt of a bar study loan.
3. How does NYU Calculate My Student Contribution for LRAP Purposes?
NYU School of Law expects all students to contribute a significant portion of their personal assets towards their educational expenses over the course of three years. Individual student contributions are computed in accordance with federal and institutional guidelines, and therefore they will vary from one student to the next based on an individual’s assets and earnings. The amount of your student contribution will be based on the information that you provided on the NYU School of Law financial aid application and/or your FAFSA information upon entrance. If you did not complete the NYU School of Law application or the FAFSA, your assumed annual student contribution will be the cost of tuition. We do not recalculate or adjust a student contribution after the initial calculation, with the exception of summer earnings.
4. How Will My Summer Employment in the Private Sector Affect My LRAP Eligibility?
As noted above, when determining my LRAP “Qualifying Debt”, earnings in excess of $15,000 in either summer following your 1L or 2L years, as well as the summer following graduation will be added to your student contribution. For example, if you received a PILC grant your 1L summer and your 2L summer earnings totaled $24,000 then $9,000 would be added to your student contribution for LRAP purposes.
5. What if My LRAP-Eligible Debt is Less Than My Actual Debt?
Should it be necessary to exclude some of an applicant’s law school debt by virtue of the maximum debt cap (i.e., in cases where the participant’s actual original principal exceeds the calculated maximum), private loans will first be excluded, followed by Graduate PLUS loans, then unsubsidized Stafford loans, as necessary.
6. Once My Qualifying Debt is Determined, What Loan Payments are Eligible?
To be eligible for inclusion in the program, repayment on loans must be current; payments on delinquent loans and loans in deferment or forbearance status are not eligible for consideration as qualifying debt service.
7. How Will A Consolidation Loan Affect My LRAP Benefits?
Participants may decide to consolidate their loans under the Federal Consolidation Loan Program, or may otherwise extend private loan repayment periods. However, LRAP will only make disbursements to participants for actual payments made or monthly payments that would be required on a 10-year schedule, whichever is less. Additionally, participants are not eligible for LRAP benefits for periods in which their loans are in deferment or forbearance.
8. What is My Qualifying Debt Service?
Once a participant’s qualifying debt is determined, qualifying monthly debt service, upon which LRAP benefits will be calculated, is determined to be the lesser of:
- Monthly debt service payments on qualifying debt required on a ten-year level repayment schedule or,
- Monthly payments on qualifying debt based upon the participant’s actual loan repayment schedule(s).
9. What is the “Participant Contribution”?
Participants are eligible for LRAP benefits for 100% of qualifying debt service if their qualifying incomes are less than or equal to the base qualifying income for their class. Participants with qualifying incomes that exceed the base but that are less than $30,000 in excess of the base qualifying income amount (the “Qualifying Income Cap”) are expected to contribute on an annual basis to the repayment of their qualified debt (the “participant contribution”) as follows:
- LRAP benefits will be reduced by a participant contribution of 40% of qualifying income between the base qualifying income and $20,000 in excess of the base qualifying income.
- LRAP benefits will be further reduced by an additional participant contribution of 50% of qualifying income between the base qualifying income plus $20,000 and the base qualifying income plus $30,000.
Note: Participants with qualifying incomes exceeding the base plus $30,000 will not be eligible to receive benefits, but may be eligible for LRAP loan forgiveness.
10. Is There Any Allowance for Non-Law School Debt Service?
The participant contribution, as calculated above, will be reduced for debt service paid by the participant on undergraduate and graduate/professional school educational loans at an amount not to exceed $5,000 annually. Participants with debt service that exceeds this limit may qualify for additional contribution offsets subject to a needs analysis to be completed by NYU.
11. What is My Qualifying Income?
A participant’s Qualifying Income is defined as the participant’s annualized gross income from employment, subject to the provisions for married participants outlined below. Gross income from employment includes, but is not limited to, wages, fees, bonuses, housing allowances, and income from self-employment, as may be applicable.
12. How can I Determine if I Might Be Eligible for LRAP Assistance?
Qualifying income scales for each graduating class, upon which LRAP calculations are based, will be determined annually by NYU, using a formula based upon public service salaries used by the federal government. The Base Qualifying Income (“Base”) figure for each year will be published in October of the preceding year. The qualifying income scales for participants who graduated in 2005 or later receive adjustments of at least 10% to the Base Qualifying Income for career progression during their fourth and seventh years following graduation. Applicants to LRAP must also meet all other program requirements.
13. How Does LRAP Treat Participants Who Are Married Individuals or in Domestic Partnerships?
Married and/or Domestic Partnered Program participants will have their Qualifying Income calculated subject to one of three scenarios:
- If the spouse’s/domestic partner’s annualized gross income from employment, as defined above and less the spouse’s/domestic partner’s undergraduate student loan debt service of up to $5000 annually, is less than the participant’s gross income from employment, the participant’s gross income from employment will be used as Qualifying Income; or
- If the spouse’s/domestic partner’s gross income from employment, as defined above and less the spouse’s/domestic partner’s undergraduate student loan debt service of up to $5000 annually, is more than the participant’s gross income from employment, the spouse’s/domestic partner’s gross income from employment less the spouse’s/domestic partner’s undergraduate student loan debt service of up to $5000 annually will be added to the participant’s gross income from employment and the sum divided by two to determine Qualifying Income; or
- If two Program participants are married or are in domestic partnerships, each will be treated as unmarried when calculating Qualifying Income
14. How is My Net Worth Calculated?
Participants must have total net worth (assets minus liabilities) of less than $20,000. In the case of married or domestic partnered participants, 50% of the combined net worth of the participant and his/her spouse/domestic partner will be considered to be the net worth of the participant. All applicants must submit disclosure statements of net worth annually as part of the application process (with their first application for participation in a given year), and as part of the information submitted for a change in marital status. Qualified Retirement Assets, such as 403(b), 401(k), or IRAs will be excluded from the net worth calculation for purposes of net asset qualification.
15. How Are My LRAP Benefits Calculated?
LRAP benefits are calculated on the basis of qualifying debt service, qualifying income, and the participant contribution. The monthly LRAP benefit will be monthly qualifying debt service less the monthly participant contribution. Please note that it is possible that applicants with qualifying income of less than the qualifying income cap will not receive a current monthly LRAP benefit if their expected participant contribution exceeds their qualifying debt service. In such cases, participants may remain eligible for LRAP loan forgiveness.
Please see the PowerPoint presentation called LRAP 101 for a more detailed explanation of how benefits are calculated. It is located here.
D. BENEFIT DISBURSEMENT & LOAN FORGIVENESS
1. Once My Application is Approved and My Benefits are Calculated, How are Benefits Disbursed?
LRAP benefits are distributed to participants as loans, which are forgiven by or repayable to the Program as outlined below. On the basis of the initial monthly LRAP benefit calculation for each year, a prospective annual LRAP benefit calculation will be completed, and will serve as the initial amount of the LRAP Loan to the participant for that year. On the basis of the initial monthly LRAP benefit calculation for each year, the amount of the participant’s initial LRAP Loan is determined, and the participant will sign a promissory note in that amount. The loan amount will be distributed to the participant on a quarterly basis in January, April, July, and October. The amount of the quarterly disbursement is typically three times the monthly benefit amount, and the amount of the initial LRAP Loan is typically 12 times the monthly amount.
2. When Are My LRAP Loans Forgiven?
LRAP loans are forgiven once participants accrue 36 months of eligibility in the program. At the end of the year during which a participant reaches 36 months of eligibility, all outstanding LRAP loans made by the program will be forgiven, and loans made in subsequent years to such participants will be forgiven annually.
Note: For purposes of determining eligibility for forgiveness, graduates will accrue service for each month for which they receive benefit distributions, as well as for each month during which they are no longer receiving current benefits but during which they have remained continuously in qualifying employment, as defined above and determined by NYU.
3. What if My Income Causes Me to “CAP OUT” of the Program Before My 36 Months of Eligibility?
Participants whose income precludes them from receiving current benefits but who remain in qualifying employment must complete an annual application to the program in order to continue to accrue months of eligibility.
4. What if I Exit the Program Voluntarily?
Participants who leave the LRAP Program prior to the forgiveness of their LRAP Loans must repay those loans to NYU School of Law. Loans which become repayable to the Program will be amortized on a monthly basis over ten years at an interest rate of 8% per year. To the extent that the monthly payment amount created by the ten year amortization is less than $50, the loan will be amortized over a shorter term, such that the monthly payment will be $50.
5. How is Interest Accrual Applied?
Interest begins accruing on the outstanding principal balance on the date the participant no longer qualifies for Program participation; repayment is expected to begin 90 days following departure from the Program. Please see section on Judicial Clerkships for treatment of these loans.
E. JUDICIAL CLERKSHIPS
1. Does LRAP Cover Judicial Clerkships?
NYU’s LRAP Program is not intended to provide benefits to graduates who choose to take judicial clerkships. The Program does make exceptions, however, for those graduates who intend to proceed to LRAP-eligible employment, as defined above, within 30 days following the end of their clerkships. Such graduates may apply to the Program for LRAP benefits, and such benefits may be paid to them for up to two consecutive years (24 months) of clerkship employment.
2. To Qualify for LRAP, Must My Clerkship Occur Immediately Following Graduation?
No. Please consult with the Assistant Director for LRAP to discuss how a later clerkship may impact your eligibility for LRAP.
3. How do Clerkship Loans Differ from LRAP Loans?
Graduates will be expected to sign a “Statement of Intent” before LRAP benefits are paid during clerkships. These LRAP benefit distributions are subject to all other terms of the Program, as well as to the following additional conditions:
- Interest will accrue at 8% per year on the outstanding balance of all loans made by the LRAP Program during approved, eligible clerkship periods (“Clerkship Loans”). No repayment of Clerkship Loans is expected during such clerkship periods.
- Accrued interest on Clerkship Loans will be forgiven by the Program for participants who, following an eligible clerkship, proceed immediately to LRAP-eligible employment and otherwise participate in the LRAP Program, and who remain in such a position for twelve consecutive months. In addition, at such time as the accrued interest is forgiven, the period of time in which the student participated in the clerkship will be included in the calculation of eligible time in the Program for purposes of Loan Forgiveness and Repayment as set forth in Benefit Disbursement and Loan Forgiveness section.
- Clerkship Loans, plus accrued interest thereon, made to participants who do not enter LRAP- eligible employment within 30 days following their clerkships, or who do not remain in such employment for twelve consecutive months, become immediately repayable to the Program, subject to the LRAP Loan repayment terms outlined in Benefit Disbursement and Loan Forgiveness section.
F. Participant Responsibilities
All participants are expected to abide by the rules and requirements of the program. Failure to accurately disclose material information in a timely manner, as well as failure to utilize program distributions to repay law school loans may result in suspension from the program and ineligibility to receive future benefits. Please note that graduates should not rely on support from the Program prior to completing an application and receiving approval from the Program Administrator.
1. What are My Responsibilities?
Participants must notify the Office of Student Financial Services within 30 days of the effective date of a change in eligibility or within 30 days of the date upon which they became aware of such a change. Changes that must be reported include changes in salary, marital status, employment, and loan repayment status or amount. Participants will be required to submit supporting documentation to substantiate the change(s).
2. How do I Submit Changes in Status?
Changes are to be submitted to NYU via email, mail or the online application system. Failure to notify the Office of Student Financial Services within 30 days of a change will result in the loss of benefits or imposition of penalties.
3. How do Changes to My Status Affect My LRAP Benefits and/or Eligibility?
As noted, projected LRAP benefits and the LRAP Loan amount are calculated prospectively, based upon the information provided by the participant at the time the application is completed, and on that basis may be modified from time to time. LRAP benefits will be recalculated as of the effective date of a reported change, and the impact of the change will be reflected beginning with the next quarterly disbursement.
Participants who receive overpayments as a result of changes in eligibility will be required to return the amount of the overpayment to the program. The overpayment may be applied to a future disbursement or may become immediately repayable to the Program, depending on eligibility status.
Participants who are eligible for an increased monthly benefit amount will receive any retroactive adjustment as part of the next quarterly disbursement.
4. What if My Interest Rate Changes During the Year?
Changes to loan payments based solely on interest rate adjustments should not be reported, except on the annual application, and benefits will not be adjusted on that basis.
5. What if I Work at a Firm Before Entering LRAP?
For graduates entering the program following non-LRAP-eligible employment, NYU will make an adjustment which recognizes earnings during such period(s) of ineligible employment and anticipates accelerated repayment of law school debt on that basis. This adjustment deducts from qualifying debt as otherwise calculated as described above, an amount equal to 40% of the amount by which the participant’s gross income exceeded the qualifying base income amount(s) applicable during such periods of ineligible employment. Qualifying debt will be adjusted by this amount regardless of whether the participant actually made such payments.