Comparing LRAP Programs for Law Schools

Not all is lost if you do not qualify for aid at the beginning of your law program. Law schools also offer back-end aid through loan repayment assistance programs (LRAPs). This quick guide offers a broad overview of different types of LRAPs and how they work, so you know how to compare them and make the best choice for your circumstances.

What Is an LRAP? 

Loan repayment assistance programs (LRAPs) are an agreement between a student and their employer. The employer helps a student repay their loans through monthly payments to the lender, often in exchange for a certain number of years of service to an employer. One of the most popular LRAPs for law students and others is the Federal Public Service Loan Forgiveness Program. This program requires 10 years of public service and the Federal Government forgives student loans. Yet, not all LRAPs are tied to public service; nor are they tied to federal programs. The exact terms of an LRAP vary greatly among the top law schools in the United States.

Eligible Jobs Under an LRAP

Harvard's LRAP, called LIPP (Low Income Protection Plan) is one of the broadest programs among the top 14 law schools. LIPP, like others in the top five, offers a wide range of eligible jobs. LIPP covers the following:

• All public sector, government, and academic jobs, regardless of whether they are law-related

• Law-related private sector jobs with companies such as for-profit academic institutions and salaried legal counsel for businesses

Yale's LRAP program covers all employment. Other top-five law schools typically only cover law-related employment in their LRAP programs but sometimes include political campaign work.

Personal Finance After Law School for Those in an LRAP

The differences in the way each LRAP program works once you graduate law school and enter the workforce can greatly impact your personal finances. Some important factors to consider when comparing LRAP programs for law schools include:

• Eligible Debt. Stanford's LRAP program, as of 2020, covers all need-based loans at all levels of education, with no limit. This is not the norm. Most law schools LRAPs only cover debt accrued at their institution. Some law schools also allow for bar loans, typically for up to $10,000.

• Repayment Schedules. Most repayment schedules are 10 years and require graduates to be on Income-Based Repayment (IBR). The few schools that do not require IBR participation, still use it as a basis for calculating their monthly contribution to debt. Although numbers vary among law schools, those who make less than $50,000 per year typically do not have to make payments. Some schools have higher income floors at $75,000 to $100,000 before their LRAP requires them to make payments.

• Income Requirements. LRAP programs have varying income caps for eligibility. Among the top five law schools, only Chicago has an income cap, which is $80K. Among the top 14 law schools, income caps range from $75,000 to $100,000.

• Assets. Each law school figures your income differently for the purposes of repayment, especially when it comes to how they treat personal assets. For example, Stanford counts any assets over $130,000 as income, Chicago simply uses your Adjusted Gross Income (AGI) from your taxes, and Duke assesses anything over $15,000 as income. The vast majority of T14 schools do not offer asset allowances.

• Marriage Status. If you are married, the law school you choose may or may not count your spouse's income. If your spouse makes less than you, many times schools do not count the income, but this is not always the case.

• Dependents. Some law schools allow for income deductions if you have kids. Among the top five law schools, Yale, Stanford, and Harvard offer $8,000 deductions per child. Many T14 schools do not offer dependent deductions.

Choosing the Right LRAP for Your Circumstances

If you intend on funding law school with the help of an LRAP, you need to have a strong understanding of the programs that can benefit you in specific circumstances. Keep in mind that policies change and numbers change from year to year, but based on the most recent information, I've provided programs you should review carefully based on some specific scenarios:

I mentioned above that the top three law schools provide income deductions for dependents. If you are choosing other law schools in the top 14 or looking for a safety school, LRAP programs at the following schools provide at least $5,000 per child in an income deduction:

• Northwestern University

• Duke University

• University of California-Berkeley

If you are married and your spouse makes more than you, the vast majority of law schools add your spouse's income to yours and divide by two to calculate your income. The following law schools do not factor your spouse's income into their calculations.

• University of Pennsylvania

• University of Michigan

• Cornell University

• Georgetown University

PRO TIP: You should file taxes separately to ensure you keep you and your spouse's income separate to avoid any issues.

If you have accumulated assets throughout your earlier years, the vast majority of law schools use them to calculate income. In some cases, student loan balances offset your income, so they truly look at net worth. The only schools that offer any kind of asset deduction among the top 14 law schools are:

• Duke University

• Yale University

• Harvard University

• Stanford University

The above are only a few examples of personal circumstances that might influence your law school and LRAP applications. If you have further questions about where you should apply to law school or need assistance to weigh the financial implications of attending certain law schools, don't hesitate to contact me.