Financial Aid Programs
There are a variety of programs that provide assistance to law school graduates who have borrowed student loans while earning their degrees. These programs are made available by the University of Michigan Law School, the federal government, and, in some instances, employers. This section of our website brings some of these resources together to make your search easier.
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Michigan Law’s Loan Repayment Assistance Programs (LRAPs)
The Debt Management Programs at the Law School provide graduates with maximum flexibility to choose jobs from any law-related area (excluding judicial clerkships and U-M funded fellowships), including modest-paying public interest positions, while still maintaining a reasonable lifestyle and remaining current on outstanding loan obligations.
Graduates whose combination of income and debt make them eligible receive assistance in meeting their loan obligations incurred during law school. A special note for those pursuing Presidential Management Fellowship (PMF) positions: On rare occasions, the job you receive may not be law-related and, therefore, makes you ineligible for the Law School's Debt Management Programs.
The Office of Career Planning will work with you as much as possible to avoid this, but if you are in doubt about it, please consult the Financial Aid Office to discuss your eligibility. For further information, select the correct program below for your entering class.
Entering Classes 2011–Later
Income-based Debt Management Program
Income-based Debt Management FAQ
Income-based Debt Management Information and Instructions
Apply for the Income-based Debt Management Program
Entering Classes 1984–2010
You may choose between the income-based option above or traditional option below.
Traditional Debt Management Program
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Income-based Repayment (IBR)
The College Cost Reduction and Access Act (CCRAA) of 2007 established, among other things, a new repayment plan for federal loans that will be of particular interest to graduates going into low-paying jobs. Income Based Repayment (Section 203 of the Act) allows borrowers to pay back their federal loans on the basis of their income and family size at the time of repayment.
Borrowers will be eligible for loan forgiveness after 25 years of qualifying payments or 10 years for those who are working full-time in eligible public service employment (see PSLF below).
The Federal Student Aid website offers further information, including a FAQ, and calculator for estimating IBR payments. Our CCRAA FAQ also provides more details about this program.
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Pay As You Earn (PAYE)
Pay as You Earn is a newer version of Income Based Repayment that became available for certain federal Direct loans in December of 2012. PAYE offers lower monthly payments and forgiveness after 20 years of qualifying payments instead of 25 years.
Payments made under PAYE can qualify for the government's 10 year public service loan forgiveness program (see PSLF below). Eligibility is limited to recent federal loan borrowers who: 1) have received a disbursement of a Direct loan on or after October 1, 2011 and 2) had no outstanding balance on a Direct or FFEL loan when a new Direct or FFEL loan was received on or after October 1, 2007.
The Federal Student Aid website offers details about eligibility requirements and a calculator for estimating payments.
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Revised Pay As You Earn (REPAYE)
Revised Pay as You Earn is the newest version of Income Based Repayment that became available in 2015 for all federal Direct loans. REPAYE offers lower monthly payments and forgiveness after 20 years of qualifying payments for borrowers repaying only undergraduate loans and 25 years for those repaying loans borrowed for graduate or professional education.
Payments made under REPAYE can qualify for the government's 10 year public service loan forgiveness program (see PSLF below). All Direct loan borrowers are eligible regardless of the time their loans were borrowed.
The Federal Student Aid website offers details about eligibility requirements, a comparison of income-driven plans, and a calculator for estimating payments.
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The Public Service Loan Forgiveness Program (PSLF)
The Public Service Loan Forgiveness Program (Section 401 of the CCRAA) will forgive most federal Direct loans after 120 qualifying payments while employed full-time in eligible public service employment.
The 10 years do not need to be consecutive, but the borrower must be working in an eligible public service job at the time of forgiveness. Only certain repayment plans qualify for PSLF, including IBR and PAYE.
The following publications offer details about the requirements for forgiveness: Federal Student Aid website, help tool, and Q&A. There is also a form that borrowers can complete to track their progress.
About the Public Service Loan Forgiveness Program
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John R. Justice Student Loan Repayment Program
The JRJ Program provides funding for federal student loan repayment for eligible public defenders and prosecuting attorneys who agree to remain employed within Michigan for at least three years.
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Federal Loan Consolidation
Federal loan consolidation provides variable-rate loan holders an opportunity to lock in the current interest rate on their federal loans. Once federal loans have been consolidated, the rate cannot be adjusted again in the future.
If it seems that most borrowers' loans are already set at a fixed interest rate, this is because most borrowers have already consolidated, or their loans disbursed after July 1, 2006, which is when the federal loan program changed from offering variable to fixed-rate loans.
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Private Loan Consolidation
Private loan consolidation should not be confused with federal loan consolidation. Fees may apply and, in some cases, the interest rate is variable. The rates that are offered will be based on your credit score or require a cosigner.
If you are considering private loan consolidation, proceed with caution and feel free to contact us with any questions.
Note: Many states, legal services programs, and public defender offices have Loan Repayment Assistance Programs (LRAPs). The ABA maintains a list of state and employer LRAPs. You should check with your employer to see if there is an LRAP available to you.
Comparing Loan Repayment Assistance Programs
This document will assist prospective law students in analyzing the LRAPs of the law schools they may be considering, as loan repayment looms large in the decision to attend law school and the selection of one. The table below offers a manageable rubric to learn about LRAPs generally and Michigan Law’s in particular. This should not be taken as a substitute for reading our FAQ when the time comes, the application guidelines (password restricted).
There are many factors that comprise an LRAP; however, the type of jobs that are eligible, conditions on entry and re-entry, and the accounting for negative amortization are especially important for evaluating whether a program provides comprehensive, long-term, and flexible support to a law school graduate.
LRAP FACTORS |
CONSIDER … |
MICHIGAN LAW INCOME-BASED DEBT MANAGEMENT PROGRAM |
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Who |
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IBR-Required? |
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Latest Entry into Program |
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Maximum Number of Years Participation |
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Eligible Jobs |
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Excluded Sectors/Jobs |
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Judicial Clerkships |
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Part-time, Self-, and Other Employment |
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Full Coverage |
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Cap |
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Eligible Loans |
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How Often |
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Negative Amortization (or What Was Happening to All That Unpaid Interest?) |
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Deadlines During the Year |
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Factors Considered in Determining the Amount of the Benefit |
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Negative Amortization |
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Annual Forgiveness and Federal Tax Issues |
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Family Care Leave |
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Comparing Loan Repayment Assistance Programs
This document will assist prospective law students in analyzing the LRAPs of the law schools they may be considering, as loan repayment looms large in the decision to attend law school and the selection of one. The table below offers a manageable rubric to learn about LRAPs generally and Michigan Law’s in particular. This should not be taken as a substitute for reading our FAQ when the time comes, the application guidelines (password restricted).
There are many factors that comprise an LRAP; however, the type of jobs that are eligible, conditions on entry and re-entry, and the accounting for negative amortization are especially important for evaluating whether a program provides comprehensive, long-term, and flexible support to a law school graduate.
Who?
Consider:
- Which class years are eligible?
Michigan Law Income-Based Debt Management Program:
- Program is open to all Michigan Law JD entering classes ≥ 1984.
IBR-Required?
Consider:
- Is enrollment in the US Department of Education's Income-Based Repayment (IBR) program required?
- If it is not an IBR-based program, how is the outstanding debt in its entirety retired or forgiven (and by whom)?
Michigan Law Income-Based Debt Management Program:
- Yes, enrollment in federal IBR, PAYE, or REPAYE is required for all eligible debt (except for non-citizens).
- Graduate must be eligible for federal IBR, PAYE, or REPAYE using only loans received to attend Michigan Law.
- Government grants forgiveness for entire IBR loan, if all terms met, after 10 years for public interest and 20 (PAYE) or 25 years (IBR/REPAYE) for private employment.
Federal Income-Driven Repayment Plans Loan Forgiveness
Latest Entry into Program
Consider:
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What is the entry deadline (as flexibility will generally work to your advantage)?
- Are extensions available?
Michigan Law Income-Based Debt Management Program:
- Graduate may enroll any time within 5 years of graduation, subject to meeting application deadlines.
- Extension for a judicial clerkship (usually 1 or 2 years) is automatic.
How Often
Consider:
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How are entry and re-entry into the program handled? Is re-entry prohibited or conditions placed on it?
- Are there penalties for exiting the program that require repayment of money loaned prior to the current year? What is the interest rate?
Michigan Law Income-Based Debt Management Program:
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Participant may enter and exit the program as needs change, subject to deadline dates.
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No long term commitment to remain in LRAP. No penalties.
- However, the graduate benefits from remaining in IBR because of debt forgiveness by the government.
Factors Considered in Determining the Amount of the Benefit
Consider:
Whether and how the LRAP accounts for
- your spouse's income
- your spouse's educational loan payments
- assets (yours and/or your spouse's)
- dependent care and costs
- other debts
- past activities
Michigan Law Income-Based Debt Management Program:
- Tier 1: Graduate pays $0 at federal GS-11 pay rate (~≤ $55K).
- Tier 2: Graduate pays increasing share of principal & no interest from ~ $55K to ~$82K).
- Tier 3: Graduate pays all but a little of the IBR payment on a sliding scale from ~ $82K to ~$96K.
- Reserve account is created to account for unpaid interest.
- Only the participant's income is used to calculate the IBR payment level that determines program coverage.
- Even if the participant files a joint tax return and, thus, has a higher federal IBR payment than that derived from a single income, program coverage extends only to that derived solely from the participant's income.
- Program requires notification of changes during the year (e.g., employment, income, loan payments).
Comparing Loan Repayment
This document will assist prospective law students in analyzing the LRAPs of the law schools they may be considering, as loan repayment looms large in the decision to attend law school and the selection of one. The table below offers a manageable rubric to learn about LRAPs generally and Michigan Law’s in particular. This should not be taken as a substitute for reading our FAQ when the time comes, the application guidelines (password restricted).
There are many factors that comprise an LRAP; however, the type of jobs that are eligible, conditions on entry and re-entry, and the accounting for negative amortization are especially important for evaluating whether a program provides comprehensive, long-term, and flexible support to a law school graduate.
Eligibility
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Who?
Program is open to all Michigan Law JD entering classes ≥ 1984.
What to consider when comparing to other schools
- Which class years are eligible?
Entry, Exit and Re-entry
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Question here
Answer