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Loan Repayment Assistance Program

(LRAP)
 

LRAP Forms

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The purpose of the Loan Repayment Assistance Program (LRAP) is to provide financial aid to graduates with a high level of law school debt combined with employment in public interest, government, and other lower income organizations. The participants and amounts of the LRAP loans are determined by:

a. Level of indebtedness : The law school begins with the applicants total income as reported on his/her most recently filed U.S. Individual Income Tax Return. The applicant must also submit an Employer Certification form, completed by the employer, indicating dates of employment, job title and annual salary.

b. Eligibility for loan forgiveness under any federal loan repayment assistance program: Whenever possible, graduates are expected to take advantage of other loan repayment assistance program, such as those offered by states, bar foundations, fellowships, or employers before accepting the law school’s LRAP benefits.

If a graduate has received Federal Perkins loans and has accepted employment as a full time law enforcement officer or corrections officer in a local State or federal law enforcement or corrections agency, the graduate may be eligible for up to 100 % cancellation of loan. In addition, a graduate that accepts employment as a prosecuting attorney whose primary responsibilities are to prosecute criminal cases on behalf of public and law enforcement agencies are eligible for law enforcement cancellation benefits. All graduates who qualify for the cancellation of a Perkins Loan under the law enforcement provision may have the amount of funds available under the LRAP program reduced.

All graduates in the program must have no outstanding balance owed to Pace University. Loans generally range from $3,000 to $5,000 per year with $5,000 being the maximum loan awarded for one year.

c. Adjusted gross income of the graduate - spousal Income: When deciding whether a married graduate’s income falls within the program’s eligibility guidelines, the Law School considers spousal income if the spouse’s name is entered on the graduate's federal tax form.

Loan Forgiveness

Pace Law School will extend a loan to a graduate each year for the three years that the graduate remains in qualifying employment. The award year typically begins on January 1st and ends on December 31st. The law school will treat each year independently and forgive the loan at the end of each year, upon satisfactory completion of that loan period. To receive loan forgiveness each year, the participant must be in good standing for the complete year with regard to all LRAP eligibility requirements. If the graduate no longer meets eligibility at the end of the year and the loan is not forgiven, the maximum repayment term is five years with an interest rate not to exceed the federal student loan rate at the time qualifying employment ends. If the participant changes employment during the three – year period, payment will continue as long as the position qualifies for coverage under the program.

In the case the participant leaves qualifying employment, or for any other reason becomes ineligible for the LRAP program, before the end of a loan period in which the LRAP was made, the Law School will forgive the portion of the indebtedness (total loan amount plus interest accrued to date) calculated as the percentage of the year satisfactorily completed. For example, if a participant ceases employment at the end of the ninth month of the participation year, the law school would forgive 75% of that year’s LRAP Loan. Any remaining amount not forgiven must be repaid by the terms above. Please note that only full months of participation in the program count toward forgiveness: participation for any portion of the month does not qualify, i.e. five and one-half months of the participation year, the forgiveness would be calculated on the basis of five months of participation.

Tax Consequences

Pace believes that we have structured the LRAP program to provide maximum tax benefits to its participants while satisfying the requirements of the relevant federal tax law. The law defines as non-taxable the forgiveness of a loan that refinances pre-existing educational loan debt of recipients who perform public service work. Section 108 (f) of the Internal Revenue Code details the requirements for tax-free forgiveness. Generally participants working for an organization described in Section 501 (C )(3) of the Code will not have this forgiveness added to their income. Participants are reminded that they are responsible for any information reported on their own federal income tax returns. All participants are encouraged to consult with their tax advisors regarding the taxability of the forgiveness of these loans and seek legal advice for any questions about their particular situation.

Repayment Process

Once a participant has left qualifying employment or no longer is eligible to receive the loan, it is the responsibility of participant to notify the Dean for Students immediately. Once it is determined that the LRAP participant is no longer eligible for the loan, the Dean for Students in consultation with the Director of Financial Aid or his/her designee will send the borrower a disclosure statement indicating the exact amount of the LRAP loans borrowed, the amount forgiven and the amount due for repayment as well as repayment instructions and a repayment schedule. Contact the Dean for Students,  Angela D’Agostino, at (914) 422-4146 or adagostino@law.pace.edu.

Program Details

1. What office administers the program?
Office of Student Services [(914) 422-4136] in association with the Office of Financial Aid [(914) 422-4050].

2. Who sets the policy for the program?
The Dean for Students

3. Who determines the award recipients?
An LRAP Board of Directors comprised of the Dean for Students, Assistant Dean for Career Development and the Associate Director of Financial Aid.

4.  What is the maximum award per graduate per year?
Award amounts are determined by financial factors affecting each applicant and are approximately $3,000 to $5,000 per year for three years.

5. In what year was the program adopted?
2001.

6. In what year will the program begin distributing funds?
2003.

7. Is funding available for all graduates?
No.

8. If funding is not available for all graduates, what factors are utilized to determine which graduates will receive funds?

Applications are reviewed and recipients selected based:
          a) Level of indebtedness;
          b) Eligibilitly for loan forgiveness under any federal loan repayment assistance program;
          c) Adjusted gross income of the graduate.
          

Program Eligibility

  1. What factors determine level of indebtedness?
     
    Participation in LRAP requires that a graduate satisfy a minimum law school debt requirement at the time of application in the program. Eligible graduates must have minimum debt equal to the sum of the full amount of federal Stafford loans (both subsidized and unsubsidized) that were available to the graduate while they were a law student. For satisfying the debt requirement, only loans approved by the Law School are considered. These include subsidized and unsubsidized Federal Stafford Loans, Federal Perkins Loans, and supplemental loans from recognized lenders such as Access Group, Citibank, CitiAssist. All institutional loans used for educational expenses. Loans from family and other private sources are not eligible. For students enrolled in a joint degree program only the law school portion of the joint degree debt is considered. For students who attended and paid tuition to another law school while earning a JD from Pace Law School , i.e. those who transferred to Pace or visited elsewhere while at Pace, only the loans borrowed to pay tuition directly to Pace are considered.
     
  2. Does the program have an income ceiling?
    Yes, $55,000
  3. Does your program have a sliding scale for payments such that if a participant’s salary increases, the payments decrease?
    No.
  4. Does the program initially issue a grant or a forgivable loan?

    A forgivable loan. Payments are made as reimbursements to recipients for their educational loan debt payments. Payments are made at the end of each year. ( see full description included)

  5. What happens when a person leaves eligible employment?

    Loans granted to graduates under the LRAP program are not repayable as long as the graduate remains in qualifying employment for a three year period and submits the appropriate documentation each year. LRAP loans become repayable when the graduate ends the qualifying employment prior to the three-year commitment. The maximum repayment term is five years with an interest rate not to exceed the federal student loan rate at the time the qualifying employment ends. (For specific repayment information see section included)

  6. What is the maximum number of years the program will pay a participant’s debt?
    Three years.
  7. Programs qualifying for employment 

    Legal Services

    X

    Non-Profit Organizations

    X

    Government

    X

    State/District Attorney

    X

    Judicial Clerkships

    X

    Private Practice

     

    Non-Legal

     

    Other

     

     

  8. How does the program treat self-employment?

    Does not meet qualifying employment. Participants must also be employed in the legal field and have been admitted to practice law within the first year of the program.
     

  9. What is included as income?

    Salary

    X

    Interest Dividend Earnings

     

    Side Practice or Job

     

    Schedule C earnings(self-employment)

     

    Other

     

     

  10. What factors go into adjusting income? 

    Deduction for dependents

    X

    Spouse’s Income

    X

    Spouse’s Debt

     

    Assets

     

    Domestic Partner’s Income

    X

    Childcare Expenses

    X

    Medical Expenses

     

    Other

     

  11. Does your program allow for a leave of absence?

    Yes, If a participant is required to leave the qualifying employment for a period not to exceed one year for the purpose of childcare and/or related responsibilities he/she may do so without penalty. During that period the program benefits are not available however the participant is not required to begin repayment during this time as long as there is a firm commitment to return to the qualifying employment.

  12. If so, for what purpose?

    Pregnancy

    X

    Family Leave

    X

    Childcare

    X

    Further Education

     

    Illness

    X

    Unemployment

     

    Disability

    X

    Part-time work

     

    Job Change

     

     

  13. What is the maximum leave time?
    Per Occurrence One Year
  14. Is the loan cancelled due to death or permanent disability?

    Yes. If an LRAP recipient dies or becomes permanently disabled, the participant’s obligation to repay any or part of the loan is cancelled. A copy of the original death certificate or certification of the permanent disability from a qualified physician is required for loan cancellation.

  15. Is there a deferment process during repayment?

    Under extraordinary circumstances a participant may request a deferment of up to six months. A written request must be sent to the Dean for Students explaining why payments cannot be made. Extraordinary circumstances would include extreme hardship, prolonged illness, total unemployment, family leave or military service.

Application Timeline

Applications must be submitted to the Dean for Students after January 1st and no later than January 31st of each year. Disbursements will be made semi-annually, one-half of the award in February and the other half in the first week of June. Loans are in the form of checks issued by Pace University, payable to the borrower.

It is the responsibility of the applicant to ensure that the application is received by January 31st to be considered for benefits. All documentation will be reviewed by the Director of Financial Aid or his/her designee to determine if all required financial documents have been received.

Graduates continuing their participation in the program must submit an Employment Cerification Form and a new promissory note each year before new benefits can be disbursed. If the upcoming year's employment certification form is not received by January 31st, the Dean for Students and the financial aid office will assume that the participant is no longer in qualifying employment and will promptly place the borrower into repayment if necessary.

All matters concerning program eligibility and repayment issues rest with the Dean for Students. Questions should be sent in writing to Angela D'Agostino, Dean for Students, Office of Student Services, Pace Law School, 78 North Broadway, White Plains, NY  10603.

 

Application Materials:

  1. Completed Application
  2. Proof of qualifying employment – completed Employment Certification Form
  3. Verifiable income data from the employer
  4. Statement of educational debt from the loan servicer
  5. Most recent federal income tax return with all schedules. A spouse’s /domestic partner's return may be required if  filed separately.

For more information contact the Office of Student Services at (914) 422-4136 or the Office of Student Financial Services at (914) 422-4050.