Loan Repayment Assistance Program

Albany Law School has always been committed to making rewarding public interest careers more viable to its graduates. To further that commitment, the Loan Repayment Assistance Program (LRAP) was launched in December 2004. This program is designed to help alleviate the financial burden of educational loan repayment upon students who wish to pursue careers in public interest law, as well as city, county and state attorney's offices, and agencies operated by a city, county or state.

The LRAP allows JD graduates from the 3 most recent graduating classes to apply for forgivable loans of up to $10,000 per year for a maximum of three years. The full program description and application are available below. Applications will be accepted yearly from Jan. 31 to March 31.

What is the LRAP?

The LRAP is a forgivable loan program designed to help alleviate the financial burden of student loans on graduates who wish to pursue careers in public interest law.

What is the application procedure/due date?

Applications will be accepted from January 31 through March 31.

When will qualified applicants be notified of their award?

On or before May 1, qualified applicants will receive a promissory note to complete and return. Upon receipt of the completed promissory note, Albany Law School will mail a check for the amount awarded.

What is the maximum award?

$10,000 per year for up to three years. (Graduates must reapply each year.)

Who is eligible to apply?

Qualifying applicants must:

  • have graduated from Albany Law School as a JD within the three years prior to applying
  • have secured full-time employment (at least 35 hours per week) in a qualified public interest law-related position (as defined below)
  • must have countable assets which are both less than the unpaid balance of the applicant’s law school educational loans and less than $10,000 after the allowable asset deduction (set forth below)
  • must have total projected annual adjusted gross income as defined below
  • must have a principal law school loan balance of at least $50,000
    • other private loans approved by the Law School Financial Aid Office qualify under this program. Educational debt owed to family or non-institutional sources would not be eligible for the program.
  • must have exhausted other means of assistance, including, but not limited to, assistance provided through the Perkins Loan forgiveness, federal agency loan forgiveness programs, and other private and public loan forgiveness programs.
    • Note: If an applicant qualifies for another loan assistance program(s) which provides a loan less than would be provided for under these guidelines, the loan that the applicant would otherwise receive pursuant to Albany Law School’s LRAP will be reduced by the loan received by the other source(s).
  • must not be in default on any educational loan

What is a qualified public interest law-related position?

  • Legal advocacy positions funded by the Legal Services Corporation as well as advocacy positions with other private not-for-profit organizations that qualify for a tax exemption under IRS Code Sections 501(c)(3), (4), or (5). Such positions may include prisoners’ legal aid or campus legal services; legal advocacy positions at private non-profit agencies, including religious, social service, fund-raising, community service, or cause-oriented organizations such as the Children’s Defense Fund, United Way, and Red Cross Chapters.
  • Full-time legal positions with a county or city District Attorney’s Office or equivalent offices in other jurisdictions and bar-sponsored or government-sponsored full-time public defender positions.
  • Other legal positions in federal, state, county, city, or town/village government offices.

How are countable assets defined?

Countable assets include the combined assets of an applicant and an applicant’s spouse or domestic partner from the following sources:

  • Cash, savings, and checking accounts.
  • Networth of investments including real estate (other than primary residence), trust funds, money market funds, mutual funds, certificates of deposit, stocks, stock options bonds, other securities, college savings plans, installment, and land sale contracts (including mortgages held), commodities, and similar assets.
  • Net worth of business and/or investment farm (market value of land, buildings, machinery, equipment, inventory, and similar assets, less those debts for which the business or investment farm was used as collateral).
  • Any interest in an annuity or life insurance policy, but being named a beneficiary in a life insurance policy shall not be considered an asset.
  • Any assets in an individual retirement account recognized for preferential tax treatment under the Federal IRS Code that exceeds the amount allowed by the Federal Code. Income deposited into the individual retirement account prior to graduation from law school will not be considered in the calculation of assets.

Countable assets will NOT include:

  • Any equity in primary residence or automobile.
  • The value of personal tangible property (furniture, electronic equipment, jewelry, antiques, and similar items).

How is adjusted gross income defined?

Adjust gross income is defined as gross income minus allowable deductions. Gross income is the greater of the graduate’s annual salary and income from countable assets or one-half the combined annual salaries and assets of an applicant and spouse or domestic partner.
Allowable deductions:

  • $3,500 for each dependent child under the age of 18.
  • $10,000 for individuals living in the Metropolitan New York City area and other large cities with relatively high costs of living, as determined at the discretion of the Program Administrator.
  • The annual amount of a spouse’s or domestic partner’s educational debt payments, not in deferment, up to a maximum of $4,000.
  • If an applicant’s gross income includes income and assets attributed to a spouse or domestic partner, deductions shall be subtracted from the combined gross income and the applicant’s adjusted gross income shall equal one-half that amount.

Applicant must have an adjusted gross annual income at or below the following amounts, based on years since graduating from law school:

  • First-year: $61,000
  • Second-year: $63,000
  • Third-year: $65,000

How is the amount of individual loans calculated?

Awards will vary from year to year based on the number of applicants and the amount of funding available.

No student shall receive a loan of more than $10,000 for any year.

No student shall participate in the program for more than three years. Accordingly, no student shall receive more than $30,000 in loans from the program.

Loan Forgiveness & Default

Interest shall accrue on loans awarded at the prime rate as of January in the year the loan is made, but shall be forgiven if the underlying loan is forgiven. The interest rate for new loans will be reset annually.

Repayment Schedule

Applicant Leaves Position in... Amount of Loan Due
0-12 Months 100%
13-24 months 25%
More than 24 months 0%

If the applicant leaves qualifying employment within 45 days of their final cancellation, the LRAP committee may use its discretion to grant a pro-rated cancellation of the remainder.

In addition, if the applicant leaves a qualifying position within 60 days of receipt of a loan, the applicant must repay 100% of the most recent loan awarded.
LRAP recipients may take leaves of absence from qualified employment for up to six months for:

  • pregnancy or disability of themselves, a spouse or dependent
  • job change
  • unemployment
  • geographic relocation
  • other compelling reasons

At the discretion of the LRAP Committee, loans may continue during the leave of absence.

College Cost Reduction and Access Act of 2007

This Act established a new public service loan forgiveness program. This program discharges any remaining debt after 10 years of full-time employment in public service. The borrower must have made 120 payments as part of the Direct Loan program in order to obtain this benefit. Only payments made on or after October 1, 2007, count toward the required 120 monthly payments. (Borrowers may consolidate into Direct Lending in order to qualify for this loan forgiveness program starting July 1, 2008.)

Public Service Loan Forgiveness

(This text was provided by and additional information can be found at www.ibrinfo.org) Public Service Loan Forgiveness is a new program for federal student loan borrowers who work in certain kinds of jobs. It will forgive remaining debt after 10 years of eligible employment and qualifying loan payments. (During those 10 years, the Income-Based Repayment (IBR) plan can help keep your loan payments affordable.)

Who can get Public Service Loan Forgiveness?

This program is for people with federal student loans who work in a wide range of "public service" jobs, including jobs in government and nonprofit 501(c)(3) organizations. What are eligible jobs?

In most cases, eligibility is based on whether you work for an eligible employer. Your job is eligible if you:

  • are employed by any nonprofit, tax-exempt 501(c)(3) organization;
  • are employed by the federal government, a state government, local government, or tribal government (this includes the military and public schools and colleges); or
  • serve in a full-time Americorps position.

If you don't meet these criteria, you may still be eligible in certain circumstances. The Department of Education's draft regulations create a two-part test:

  1. your employer is not "a business organized for profit, a labor union, a partisan political organization, or an organization engaged in religious activities, unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing;" and 
  2. your employer provides any of the following services: emergency management; military service; public safety; law enforcement; public interest law services; public child care; public service for individuals with disabilities and the elderly; public health; public education; public library services; and school library or other school-based services.

Please note that these definitions of eligible jobs reflect the outcome of negotiations concluded in April 2008, but they may be revised before the Department of Education finalizes its rules for Public Service Loan Forgiveness by November 1, 2008.

What kinds of loans does it cover?

It covers federal Stafford, Grad PLUS, or consolidation loans as long as they are in the Direct Loan program. Borrowers with loans in the Guaranteed (or FFEL) loan program must switch to the Direct Loan program to get this benefit.

When does the 10-year clock start, and which payments count?

Only payments made after October 1, 2007, count towards the 10 years (120 monthly payments, not necessarily consecutive) required for Public Service Loan Forgiveness. Qualifying payments must be made through the Direct Loan program and include Income Contingent Repayment, Standard (10-year) Repayment, or Income-Based Repayment (available in July 2009).

To count, these payments must be made while you're working full-time in an eligible job. "Full-time," according to the latest information from the Department of Education, means an average of 30 hours per week or the standard for full-time used by the employer, whichever is greater. In professions such as teaching, annual contracts that include at least eight months of full-time work will be treated as the equivalent of a full year's employment. If you meet all the criteria, the earliest your remaining debt could be forgiven is October 2017.

What if I've already paid off my loans by then?

This loan forgiveness program will only benefit people who still owe money on their federal loans after 10 years of eligible payments and employment. If your income is low relative to your debt, and you qualify for reduced payments under IBR (or Income Contingent Repayment) at any time during those 10 years, you will likely have debt left to forgive.

Income-Driven Repayment Plans

An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size.  There are currently four income-driven repayment plans available:

  • Revised Pay as You Earn Repayment (REPAYE Plan)
  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

If you'd like to repay your federal student loans under an income-driven plan, you need to fill out an application.  Please contact your servicer for information. If you'd like to get additional details and compare plans, visit: https://studentaid.gov/manage-loans/repayment/plans

Perkins Loan Cancellation

This program cancels a percentage of a borrower's outstanding Perkins's loan debt for performing certain kinds of public service jobs. In Conference Committee, language was added extending this program's reach to "a full-time attorney employed in a defender organization established with section 3006A(g)(2) of Title 18", i.e., (A) federal public defender, and (B) community defender. The program cancels 15% for the first or second year; 20% for the third or fourth year, and 30% for the fifth, or 100% forgiveness for 5 years of service.  https://studentaid.gov/manage-loans/forgiveness-cancellation/perkins#ot…