LRAP Eligibility Guidelines – Through 2012

LRAP Eligibility Guidelines for Graduating Classes of 1997 Through 2012

Program Overview
1. Qualifying Employment
2. Participant’s Annualized Income and Adjustments
3. Imputed Contribution
4. Eligible Loans
5. Length of Program Participation
6. Loan Repayment Terms (Calculation of Program Assistance)
7. Medical and Family Leave
8. Application & Forgiveness Procedures
9. Consultation and Appeals Process
10. Limited Funds Contingency and Right to Modify

The Berkeley Law Loan Repayment Assistance Program (LRAP) is designed to aid Berkeley Law graduates who earned the Juris Doctor (J.D.) degree and are undertaking qualifying public service employment for nonprofit public interest organizations or government agencies. Under this program, Berkeley Law will provide one or a series of forgivable loans over a period not to exceed 10 years to cover educational student loan payments to be made in the six-month period following the granting of each LRAP loan. Each LRAP loan, with the exception of the ones for judicial clerkships of less than two years (see Qualifying Employment), will be either partially or fully forgiven at the end of the LRAP contract period and a new loan will be issued if all program requirements have been met.

The following guidelines are for the graduates of the Classes of 1997 through 2012 that provide two options for program participants. The first is the Standard Track that Berkeley Law has provided from 1997 through 2009, and the second is the Income-Driven Repayment (IDR) Track that is designed to provide greater support than the Standard Track because it integrates LRAP with the federal government’s income-driven repayment plans (IBR and PAYE) and Public Service Loan Forgiveness (PSLF) of federal Direct loans. The integration allows the LRAP to provide support for student loan debt greater than $100,000 if the borrower elects to make the low monthly student loan payments provided by the IDR option.

Please be sure to read this entire document before completing the LRAP application.

 

Program Overview

LRAP provides financial support to graduates who earned the J.D. and are employed in public service settings, where salaries are significantly lower than in the private sector. Graduates may participate in the program for up to 10 years. Participants must have entered LRAP within 3.5 years of graduation to be eligible for support.

LRAP constitutes a core component in Berkeley Law’s effort to serve as a public law school, in this case by increasing the ability of its graduates to enter into public service legal jobs and careers and lowering the student debt barrier. The program aims to ease the financial burden imposed by the escalating costs of a legal education on recent alumni who might otherwise be excluded by economic considerations from accepting relatively low-paying public sector work. The program recognizes the value of public service as a goal for the law school itself and for the lawyers it trains generally, as well as the importance of freedom of career choice for Berkeley Law graduates.

To qualify for LRAP, a graduate must work for a nonprofit organization or an agency of government in law-related employment that makes substantial use of legal skills.

LRAP loans will be granted on a semiannual or annual basis, assisting participants with all qualified student loan payments to be made in the following months. At the end of an LRAP contract month, the LRAP loan will be forgiven (canceled) when the participant demonstrates that they have met the employment and income requirements and made all the qualified educational loan payments. (See exception for participants in judicial clerkships of less than two years under Qualifying Employment.)

 

1. Qualifying Employment

To be eligible for LRAP, an applicant must work in qualifying employment. Only loan payments made while working in qualifying employment will be eligible for LRAP assistance and the subsequent LRAP loan cancellation.

Qualifying employment for LRAP purposes is defined as greater than half-time work for a nonprofit organization or an agency of government in law-related employment. It includes but is not limited to prosecutors, public defenders, military JAG corps, legislative staff, and administrative agency staff that make substantial use of legal skills, for example, by requiring a J.D. and/or passage of the Bar or otherwise drawing heavily on law school training. Non-tenure and tenure track academic positions at nonprofit educational institutions, including clinical instructors and research fellows, can also qualify, so long as the positions are law-related and meet our salary requirements The inclusion of tenure track academic positions begins with the Class of 2012 JSP graduates who earned their JD at Berkeley Law. A preliminary review of prospective jobs by the LRAP Advisor is available and encouraged (you can email lrap@law.berkeley.edu or make an LRAP appointment).

Program for “Low-Bono”/Union LRAP Coverage: The program described in this paragraph is available only to the classes of 2010 and beyond. Graduates from the classes of 2010 onward can receive LRAP support by working for a union or plaintiffs’-side firm, but these positions do not qualify for PSLF. “Low-bono” employment can qualify for LRAP support so long as the employer predominately provides services to underrepresented members of society in practices areas such as civil rights, human rights, criminal law, employment law, housing law, and immigration law, among others. LRAP also mandates that at least 50% of the work of both the employer and the applicant involve providing legal services on a pro bono, reduced-fee, or court-awarded fee basis to such underrepresented individuals or organizations. The Financial Aid Office may request a letter from your employer detailing how your position meets these two requirements. Graduates pursuing the low-bono option must opt for the IDR Track.

Judicial clerkships intended to last two or more years are considered qualifying employment. Judicial clerkships of less than two years qualify if the graduate intends to pursue public service employment immediately following the clerkship. The forgivable loan for the latter type of judicial clerkship during each LRAP eligibility period will have a four (4) percent interest rate and no requirement of payment so long as public interest employment is secured at the end of the clerkship. If the graduate fails to enroll in the LRAP on the cycle following the end of the clerkship, the entire remaining balance of the loan will become due within one year.

LRAP does not cover graduates whose employment has been deferred and are receiving a fellowship or stipend to do volunteer public interest work before joining their private law firms. The program is designed to provide assistance solely to graduates who are pursuing public interest work or government employment.

 

2. Participant’s Annualized Income and Adjustments

Eligibility for LRAP loans also depends on an applicant’s annualized full-time income. Gross income must be reported in the Financial Statement section of the LRAP application. Applicants must provide gross income before taxes, deductions, or adjustments. For most individuals this is equivalent to the published annually salary as reported on the LRAP Employer Verification Form. Applicants must also report gross income from all sources of income, including salaries, bonuses, interest income, dividend income, and rental income. For those applicants working less than full-time, it includes salary adjusted for the calendar period employed and the number of hours worked per week.

A married participant’s annualized full-time income will not be adjusted unless his or her spouse has a higher income, in which case the participant’s eligible income will be calculated based on half of the joint income of the couple.

For purposes of entrance into and participation in LRAP, those with dependents, as determined under federal income tax guidelines, shall receive a credit in the form of a downward adjustment of their annualized full-time income, by $6,000 for one dependent and by $4,000 for each additional dependent.

 

3. Imputed Contribution

For LRAP participants with annualized full-time incomes of $70,000 a year or less, LRAP will cover 100% of the participant’s monthly payments under an income-driven repayment plan. For LRAP participants with annualized full-time incomes between $70,000 and $100,000, LRAP support is prorated. Participants are expected to contribute 35% of their income over $70,000 to their own federal student loan payments out-of-pocket (your “imputed contribution”), with LRAP covering the remainder of the monthly income-driven loan payment.

Graduates with annualized full-time incomes of $100,000 or more (after any dependent deductions are applied) are not eligible for LRAP support unless and until their income decreases below $100,000.

 

4. Eligible Loans

Federal and private student loans provided by a U.S. lender qualify for LRAP. Federal student loans include Stafford subsidized and unsubsidized, Perkins, and Graduate PLUS loans. Except for the bar study loan, only private student loans that are certified by our office are eligible for LRAP.

The eligible loans will further depend upon whether the LRAP participant selects the Standard or IDR Track.

For graduates in the Standard Track, the LRAP will assist with repayments made on the principal and capitalized interest of federal and private educational loans borrowed for the J.D. Program. Any loan amount borrowed in excess of the student budget as determined by the Financial Aid Office for any particular year will not be eligible for LRAP assistance. The only exception is a bar study loan obtained for the post graduation period.

The overall cap on principal and capitalized interest for all loans covered by LRAP shall be $100,000 for law school loans, no more than $10,000 of which can be for bar study loans. 

If the graduates are in the IDR Track, the overall loan cap is removed if the participants utilize the federal government’s Income Based Repayment option for all of their federal student loans. They may include federal student loans acquired prior to attending Berkeley Law.

For participants in this track, LRAP will support the repayment of no more than $10,000 in bar study loans and only the private educational loans obtained while earning the J.D. at Berkeley Law.

Once participants select the IDR Track, they cannot go back to the Standard Track for the remainder of their participation in the LRAP.

 

5. Length of Program Participation

Graduates seeking to participate in LRAP must begin participating in the program within 3.5 years of graduation.

The maximum length of LRAP participation is 10 years. This length of eligibility provides LRAP participants in the Standard Track with financial support throughout the standard 10-year repayment plan. Participants who qualify for maximum assistance and who remain in the program for 10 years can expect to have LRAP pay off their entire educational student loan debt if the loans are scheduled for a 10-year repayment plan.

For graduates in the IDR Track, 10 years of LRAP support will enable them to apply for Public Service Loan Forgiveness of federal Direct student loans that the federal government provides to borrowers who meet the requirements of qualifying student loan payments and employment. Federal Family Educational Loan (FFEL) program loans and/or Perkins loans are not eligible for PSLF.

If a graduate attended Berkeley Law for only two years, the maximum number of years of LRAP support while in the Standard Track is seven years or two-thirds of 10 years because the graduate paid only two years or two-thirds of the Professional Degree Fee, the primary source of funding for the program, that all other graduates paid. However, if the graduate utilizes the IDR Track, 10 years of LRAP support will be provided for the IDR payments. 

 

6. Loan Repayment Terms (Calculation of Program Assistance)

On a semiannual or annual basis, LRAP will provide each participant a forgivable loan equal to his or her scheduled student loan payments less any imputed contribution to be made on the principal and capitalized interest of eligible loans during the subsequent LRAP contract period.

For participants in the Standard Track, payments made in excess of those due under a 10-year repayment schedule are not eligible for assistance. Although the program will assist with payments made on an amortization schedule greater than 10 years, the amount of LRAP loans forgiven will be no more than the actual scheduled loan payments made. Participants cannot apply for a LRAP loan based on a 10-year repayment schedule, make payments that are less than that, and expect the entire LRAP loan to be forgiven. To take maximum advantage of the LRAP, participants in the Standard Track are advised to structure the repayment of their debt with a standard 10-year repayment plan.

LRAP will not provide support in the IDR Track for student loan payments in excess of those scheduled for private loans, bar study loans, and income-driven repayment of  federal student loans. Full IDR repayment assistance is limited to single households or married borrowers who file separate federal tax returns. Although the program will assist with payments for non-federal loans made on an amortization schedule greater than 10 years, the amount of LRAP loans canceled will be no more than the actual scheduled loan payments made.

For the IDR Track, participants cannot apply for an LRAP loan based on a 10-year or more repayment schedule for their non-federal loans, make payments less than the ones scheduled, and have the entire LRAP loan forgiven. To make maximum use of the LRAP, participants are advised to structure the repayment of their student loan debt with a 10-year schedule.

 

7. Medical and Family Leave

Graduates may receive LRAP support during periods of paid and unpaid medical and family leave while employed in qualifying employment. This includes medical, parental, and family medical care leave. Parental leave includes birth, adoption, or foster care placement of a child. For family medical care leave, family members include spouse, children, parents, siblings, and grandparents.

So long as a participant is still employed, LRAP will provide up to six months of support during qualifying leave for each incidence of leave, with a maximum of 24 months of leave support during the 120 months of participation in the Program.

We encourage graduates who are unemployed or taking an extended period of unpaid leave to apply for forbearance or deferment. Alternatively, graduates can opt to have their income-driven monthly payment amount recalculated based on their updated income, which may be zero. If successful, graduates will not need to make student loan payments and therefore, will not need LRAP support, until they return to qualifying employment. Please contact an LRAP Advisor or your loan servicer to discuss which specific options are available to you.

 

8. Application & Forgiveness Procedures

Application Process

The Financial Aid Office processes LRAP applications on a first-come, first-served rolling basis throughout the year. Applications for LRAP support must contain all required information. Please refer to our How to Apply for LRAP webpage. All application forms can be found on the LRAP Forms webpage. To renew LRAP support, we recommend submitting a new LRAP online application at least 30 days before the end date of your current contract to ensure your new contract starts before your next payment is due. You must include an up-to-date Employer Verification Form (signed no more than 40 days prior to form submission).

 

Receiving LRAP Funding

If you meet the requirements to receive an LRAP forgivable loan, you will be sent 1) an award letter, 2) an Information Certification, and 3) a Promissory Note. LRAP participants are required to review the information for accuracy, read and understand the terms of the agreement, then sign and return the documents to the Financial Aid Office. Participants must mail a hard copy of the signed LRAP award documents with four (4) wet signatures to the Financial Aid Office, UC Berkeley, School of Law, ATTN: LRAP, 226 Boalt Hall, University of California, Berkeley, California 94720-7200. To reduce processing times, participants may also e-mail a scanned version of the documents to lrap@law.berkeley.edu prior to mailing the originals. The Financial Aid Office cannot issue LRAP funds until the award documents are signed and returned. Once you sign and return your LRAP award documents, we will initiate a payment request for your LRAP funds with the main campus. The UC Berkeley Disbursements department will either mail you a paper check or, if you set up EFT, disburse the funds directly into your account. The Financial Aid Office is not responsible for disbursing your funds.

 

Forgiveness/Cancellation of LRAP Loans

You must submit a cancellation (i.e. forgiveness) application within 30 days after your contract end date in order to have your LRAP loan forgiven. Otherwise, you will be billed back for the full amount of your LRAP loan.
Cancellation applications must contain all required information. Please refer to our How to Apply for LRAP webpage. All application forms can be found on the LRAP Forms webpage. Unlike LRAP applications, the Financial Aid Office processes cancellation applications on a quarterly basis.

Participants may not qualify to have their entire LRAP loan forgiven, and therefore may be billed back for all or a portion of the LRAP forgivable loan if they 1) did not make all of their monthly loan payments during their LRAP contract, and/or 2) had an increase in salary during their LRAP contract, and/or 3) left qualifying employment or otherwise did not meet LRAP requirements during their LRAP contract.

  1. If a participant did not make all of their monthly loan payments due during the LRAP contract period, or made smaller payments than expected when they applied for LRAP support, they will be billed back for the LRAP support received for those months. This does not include any previously-owed past due amounts or late fees; LRAP funds should be used only for payments due during the LRAP contract period.
  2. If a participant has an increase in salary during their LRAP contract, the Financial Aid Office will look at the participant’s salary during each month of their contract to determine if the participant was over-awarded. If a participant changes employment or salaries mid-month, LRAP will attribute the position or salary the participant held for the majority of the month to that month. The Financial Aid Office will then compare the participant’s estimated imputed contribution for each month (determined during the LRAP application and award stage) with their actual imputed contribution for each month. The difference between the estimated and actual imputed contribution will be totaled up for each month of the LRAP contract and added together, resulting in the total “missing imputed contribution,” which is the amount the participant will owe back to the University. If a participant’s increased salary results in an imputed contribution higher than their monthly payment amount, the participant will be billed back for the amount of LRAP support they received in those months. Participants will not be billed back for more than their IDR monthly payment amount for a single month. If a participant has a salary increase ≥$100,000 during an LRAP contract, they will owe back each month of LRAP support for which they received the ≥$100,000 salary for the majority of the month.
  3. If a participant exits qualifying employment during their LRAP contract, they will owe back each month of LRAP support for which they were not in qualifying employment for the majority of the month.

Should a participant be required to pay all or a portion of their LRAP funds back (because less than 100% of the LRAP loan is forgiven for any reason), they will be notified by the Financial Aid Office in advance of notifying the main campus and initiating the official billing-back process. Participants will be required to make payments through the University’s loan servicer, Heartland ECSI. Participants will have a four-month interest-free grace period on any amount due, although participants can make payments before interest begins accruing. The interest rate is currently 4.00% APR. Depending on the amount due, quarterly repayment typically lasts three years or less for each LRAP loan, although there is no penalty for early repayment. Failure to make payments on any amount due back to the University may result in loan default and may negatively affect your credit score.

 

9. Consultation and Appeals Process

The Financial Aid Office encourages students and graduates to consult with an LRAP Advisor regarding eligibility prior to submitting an application for LRAP or forgiveness if they have questions or concerns about their eligibility for the Program. If an application is denied, the applicant may submit an appeal to the LRAP Appeals Committee, which may include the Associate Director of LRAP, the Director of Financial Aid, and the Dean of Admissions and Financial Aid. If the appeal is denied, the applicant may submit an appeal to the Dean of the Law School.

 

10. Limited Funds Contingency and Right to Modify

LRAP is funded primarily by the Professional Degree Fee and is not dependent on state funding. However, the law school budget as a whole is not unlimited. In the event that funding is not sufficient to fully fund all qualified applicants in the manner anticipated above, the law school reserves the right to limit the number of Program participants. Any changes to LRAP will be announced to current and former students by the Financial Aid Office.

 

Last updated December 6, 2019

 

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