Comparing LRAP programs

mes08

I've been accepted to two T-14 schools and am now trying to compare the different LRAPs and general student debt assistance programs they offer. I'm unfamiliar with some of the terms and don't fully understand some of the conditions for the programs. Does anyone know where I can get a good, easy-to-understand, general explanation of how these programs work? Would be immensely grateful for the help

allison.gill.sanford

I've done a lot of research on LRAPs as well. I would definitely encourage you to go into the process with your eyes wide open - there are significant LRAP differences that will impact you later.
You do need to do your own research though, take the time to slowly read through the explanation section of the LRAP for a certain school, and then email or call the relevant office to get clarification on how the program works.
I would encourage you to pay special attention to how different schools will calculate the part of monthly repayment on your debt that you will be responsible for based on things like your assets, projected income level, spousal income (if relevant), dependents, etc. These are the factors that tend to really differentiate the LRAP programs, and could make one much more advantageous for you than another depending on your situation.

UsernameChange

Go to top law schools forums and click financial aid subforum. There is a spreadsheet with hypotheticals for every t14 school.

stepharizona

@UsernameChange said:
There is a spreadsheet with hypotheticals for every t14 school.

Awesome had no idea!

mes08

@UsernameChange Thanks, I had already come across that. But there are a couple things on the spreadsheet that I don't understand (What is amortization or negative amortization? What is IBR?) and was looking for somewhere I can find that explained more in depth.

Jonathan Wang

Amortization is paying off your debt over a period of time ("amortizing" your debt over 10 years, say). It wraps interest into its calculations, which is why it's not just a simple division problem. Negative amortization is when the monthly payment won't even cover the interest due, which has the impact of making your debt grow instead of shrink over time because any interest that remains at the end of the month is added on to your principal.

"Standard" repayment terms are amortized over 10 years, meaning you owe a flat amount each month for 10 years, and then you're done. But, if you don't make enough money, you can opt for IBR - income based repayment - which bases your monthly payments on how much you make. If you don't make that much money, your payments might not cover the interest on your loan, leading to negative amortization and owing more money in the long run.

Some schools are more generous than others. Harvard forgives your debt after every year, but Columbia structures their LRAP as a loan and requires you to serve 5 years in LRAP-eligible employment before they'll forgive it completely. There are various levels of income eligibility, job eligibility, amount of money they'll give you, forgiveness terms, etc. and it varies widely by school.

Word of caution - 10 years is a very, very, VERY long time. Honestly, I think anyone who says they know exactly what they'll be doing in 10 years is full of it, and law students are certainly no exception. You need to think long and hard about the possibility of one day leaving LRAP-eligible employment and how you'll deal with the consequences.

mes08

@"Jonathan Wang" Thanks so much, you're the best! Helped clear things up for me