LRAP Plus Policies

One-Time Payments

Participants eligible for LRAP Plus who opt into the income-driven plan may, under certain circumstances, qualify for additional assistance to help cover negative amortization that can occur while enrolled in an income-driven repayment plan.  Negative amortization occurs when the payments made by a borrower are less than the interest due on the borrower’s outstanding debt. The amount of the one-time payment is designed to cover an eligible participant’s accrued unpaid interest as of the time they have left PSLFP-eligible employment.

In order to help address the issue of negative amortization, LRAP Plus participants [who opted into the income-driven plan] who have completed 36 months in eligible employment may receive a one-time payment to assist with the negative amortization on their LRAP-eligible federal law school loans.  For example, a participant who leaves LRAP Plus’ income-driven plan [because they have left PSLFP-qualifying employment] but otherwise remains in LRAP-eligible employment will receive this one-time payment once the participant has left PSLFP-qualifying employment. The one-time payment is calculated as of the time of the switch to PSLFP-ineligible employment.

Note:  Interest accrued due to forbearance, deferment (except while enrolled at NYU), or other periods of non-payment, and penalties for late payment or default on eligible law school loans does not qualify for one-time payment coverage.  Additionally, one-time payment coverage will cover the negative amortization (interest only) on qualifying law school debt minus any participant contribution. Any ambiguity or conflict within or question regarding the interpretation or application of these LRAP guidelines as they relate to the one-time payment or otherwise will be made by the Program Administrator at the Administrator’s sole discretion.