I had the immense privilege of going to Stanford Law School. When I began to be known among my friend group as knowledgable on student loans, I started to get requests for student loan consultations from other SLS alums as well as our peers at Harvard Law School and Yale Law School. This has given me an on-the-ground insight into the three schools’ LRAP programs, which are an immense draw for students thinking of pursing a public interest career.
Understanding the different LRAP programs is fairly daunting for many admitted students and there is a lot of information to sort through. This post aims to compare the most important issues that I see arise for alumni based on the current program implemented at each school (at Yale, for instance, the program may differ depending on your graduation year). If you have other concerns about the LRAP programs, please let me know and I will supplement this post as best I can.
Of course, anybody in the position of choosing between these programs is already quite lucky. Each one of these is substantially more generous than any other LRAP program out there. As we get into the weeds, please keep in mind that I know having to compare these programs is a problem for only a few lucky people.
To enroll in LRAP at each school you must have full-time qualifying employment. Qualifying jobs differ across the schools
Stanford excludes academic jobs such as LRW positions from LRAP, whereas Yale and Harvard do not. Clinical positions should qualify under all three plans.
How much you will get under an LRAP program is a function of (1) your eligible loans; (2) the payment plan the school calculates for your eligible loans; and (3) your expected contribution. We tackle each of these in turn.
(1) Eligible Loans
Generally speaking the three programs cover the following loans:
(2) Payment Plan
How much money you get through LRAP depends on how much the school thinks you should have to pay every month. Each school calculates this monthly payment amount a little bit differently.
Because Harvard always bases its award on the plan you are actually enrolled in, if you are in a plan with a lower monthly amount than the 10-year standard, your award will decrease accordingly. This can hurt alums who have to make a substantial contribution on their own.
Yale makes up its own numbers. It artificially calculates a non-existent 15-year fixed repayment plan and gives you an award based on that monthly amount for the first 5 years. In the second 5 years of the 10-year LRAP program, it calculates a 5-year repayment plan to pay off your remaining balance. In other words, Yale’s award will most likely be quite a bit lower than either Harvard’s or Stanford’s for the first 5 years.
(3) Expected contribution
Once your school has calculated your expected monthly payment, the school then calculates how much it expects you to contribute. Each school expects you to contribute a particular amount based on a percentage of your adjusted or gross income. Here are the calculation tables according to each school’s program handbook:
Which looks a little bit like this side-by-side:
Harvard starts out expecting a much higher contribution. Yale and Stanford start neck-and-neck, but then Yale’s program expects marginally less at higher income levels.
Your actual LRAP award will be the total expected amount minus your personal contribution.
Compensation for Tax Liability in the Private Sector
One issue I see come up often is the effect of employment at a private-sector employer. Alumni who do not work for a 501(c)(3) or the government will be taxed on the LRAP income their receive. Stanford and Harvard try to offset this tax liability by increasing the award. Yale does not.
Transition between jobs
Luckily each program gives alums some grace period when transitioning between jobs. Harvard’s program is slightly less generous on this front, but all three programs offer some cushion.
Many HLS/SLS/YLS students hoping to take advantage of LRAP programs may take 1-2 years to clerk and then hope to transition to public interest employment. Harvard and Stanford prohibit using LRAP money to cover loans if a student is going to private-sector (i.e. firm) employment afterwards. However, both will offer loans to students that will then be forgiven if the student goes from the clerkship to eligible public interest employment.
YLS alums can use their LRAP for clerkships, but the LRAP money is not actually forgiven. Instead, that money is yet another loan that is added to the borrowers accumulated debt. After the clerkship, if a YLS alum enters qualifying employment, the clerkship loan will be included in the debts to be paid off over the course of participation in the program.
Last but not least, spousal income. Stanford and Harvard have a straight forward approach. They take greater of (a) his or her individual income; or (b) half the joint income.
Yale, on the other hand, will consider the joint income of the borrowers minus the spouse’s own education loan debt payments and minus $40,000. This can hit borrowers whose spouses have higher incomes particularly hard. (However, if both spouses are enrolled in LRAP, Yale consider’s half the joint income).
While I may be biased, I think the bottom line is that SLS has the best LRAP plan.
Harvard’s program expects a relatively high contribution early on and has less flexibility on repayment plans.
While Yale has an immense amount of employment flexibility, it does not provide the additional tax benefit to private-sector employees that SLS and HLS students get. Additionally, Yale’s clerkship program and 15-year/5-year amortization schedule, clerkship loan program, and treatment of spousal income is not as generous as Stanford’s and hits young alumni particularly hard.