Income-Based Debt Management FAQs

In order to participate in our program, our graduates must first enroll in one of the U.S. Department of Education’s Income-Driven Repayment plans (IDR). The IDR plans (which cap your payment at 10-15% of your income) require a certain level of annual payment depending on income and, if you work for 10 years in a public interest or public sector job (or 20-25 years in the private sector), the federal government will forgive your outstanding loans entirely. You must then apply to our LRAP program each year to receive benefits in the following calendar year.

Our LRAP links our benefit calculations to the federal pay scale, in particular, the General Schedule GS-11 rate at which entry-level federal government attorneys are hired ($62,107 in 2024). For graduates whose incomes are at that rate or lower, we will provide an annual payment equivalent to the entire annual IDR payment. In other words, graduates at that income level will make no out-of-pocket payment toward their loans. Graduates with higher salaries, up to 175 percent of the GS-11 rate, will also receive an IDR stipend from us, on a sliding scale (those with salaries up to 150 percent of the GS-11 rate could be eligible for full loan payment coverage, depending on debt level).

In addition, for LRAP participants at income levels of GS-11 or below, if your annual IDR payment is too low to cover the annual interest accrual on your debt, the Law School will set aside an amount equivalent to your annual unpaid interest in an escrow account. For participants at higher income levels (up to 150 percent of the GS-11 rate), unpaid interest is escrowed on a sliding scale. In the event you stop participating in our program before your loans qualify for federal loan forgiveness, you may request that we remit to you the funds in your escrow account, so long as you have been in the program for at least two consecutive years and you are not on track for the government’s 10-year Public Service Loan Forgiveness Program (PSLF). This ensures that for most participants in our program, the amount of principal you owe will not be higher if you leave the program prior to total loan forgiveness. (Because IDR payment levels are set according to income only, without regard to the borrower’s total debt, it is possible for participants with particularly high debt levels and income over the GS-11 rate to accrue unpaid interest. To avoid this scenario, we encourage students to seek counseling from the Financial Aid office early in your law school career to discuss strategies for reducing your total borrowing.)

Example 1: $60,000 MLaw Debt

Example 2: $125,000 MLaw Debt (~average MLaw Debt among borrowers)

Example 3: $200,000 MLaw Debt

This program is for the entering class of 2011 and later. Students from the entering classes of 1984–2010 may choose to apply for this program if they wish to do so.

The numbers vary from year to year, but typically 300 people participate. We do not, however, have any ceiling on the number of graduates we will cover in a given year.

As mentioned before, our calculations are tied to the GS-11 rate, which varies annually according to changes in the cost of living. Our cap is 175 percent of the GS-11 rate for that year. As an example, in 2024 the GS-11 base rate is $62,107, so the cap would be $108,687.

Our program has been designed to cover the vast majority of debt for the vast majority of our students. Federal loans (Direct Subsidized, Direct Unsubsidized, and Grad PLUS loans) taken out during your time at Michigan Law will all be eligible for coverage under the program. Private loans will not be covered unless you were ineligible for federal loans because you were on visa status while attending law school.

You must be employed full time in law-related work. In very general terms that means if a JD is required for the job, then your job qualifies you for the program. The only exceptions to this are judicial clerks, temporary jobs, and fellowships funded by U-M, which do not qualify for the program at all. 

No, we do not require that employment be in public interest or public service. We really want our graduates to do the legal work they want to do, whether that is for a public interest organization, the government, or a small law firm in a sparsely populated area. The breadth of our program distinguishes it from most other similar programs.

No, it does not. We have had recipients in Thailand, Lebanon, Korea, and Pakistan, just to name a few. However, if your employer is not the U.S. government or a public interest, not-for-profit employer based in the U.S, you might not qualify for Public Service Loan Forgiveness (PSLF) from the Department of Education. (Our understanding, for instance, is that the United Nations does not qualify for PSLF).

No, but you must enter within five years of graduation. For example, if you graduated in May 2023, your first opportunity to apply was Fall 2023 for Debt Management in 2024. Your fifth and final opportunity to apply will be Fall 2027 for 2028 support. Graduates whose first job is a clerkship are granted an extension for the duration of the clerkship (usually one or two years).

You may be enrolled in our program for a total of 10 years. These years do not need to be consecutive.

You apply to our LRAP program annually, and you don’t need to make any long-term commitment to our program. You can move in and out of the program and do not need to be enrolled in consecutive years. It is to your benefit, however, to stay in the federal IDR program, even if you don’t remain in ours. Under the IDR guidelines, if you remain in a public interest or public service job for 120 months, the remainder of your unpaid loans is forgiven. For those in the for-profit sector, forgiveness of the remainder of your loan debt comes at 20 or 25 years, depending on the repayment plan.

Each year you are in the program you receive an interest-free loan from the Law School. If you remain in your same eligible job for that year, the loan is forgiven at the end of the calendar year. If you leave your job during that calendar year or receive a substantial raise that makes you ineligible for the program, though, you will have to pay a prorated amount back to the program. 

Our online instructions provide more details about our program. For more information about the federal government’s programs, please visit the StudentAid.gov website.

Applications for our program are made available each year in the fall, and graduates must submit their forms by the application deadline. You must reapply annually.