Loan Repayment Assistance Program
The legacy of the late Dean Howard B. Eisenberg is important to the future of Marquette University Law School. This is true in the general sense that Dean Eisenberg worked tirelessly to inculcate in students a sense of the important public interest that lawyers serve. It is true as well in the more specific sense that the Howard and Phyllis Eisenberg Fund is a way of ensuring that today's students have the means of acting on the ideals of the profession by undertaking public interest work.
The Howard and Phyllis Eisenberg Fund is an endowed fund held by Marquette University that provides income each year for the purpose of law school loan repayment assistance. Dean Eisenberg himself established the Loan Repayment Assistance Program in the spring of 2001. After his death, the program was renamed to serve as a lasting memorial and was enhanced through memorial contributions and other donations.
Every year, a number of Marquette University Law School graduates dream of a career in public service. But these new lawyers face a substantial challenge. Jobs in public interest law, particularly those providing civil legal assistance to indigent populations, often pay far less than the median starting wage in other sectors of the legal market. Thus, it is difficult for new law graduates with substantial student loan debt to take public interest jobs that would enable them to pursue their dream. The Law School recognizes that the legal community has a responsibility to help provide services to people who cannot afford representation. This program has been adopted in the hope that it may remove an obstacle to graduates interested in choosing a career serving the poor and underserved. According to a 2002 joint report by Equal Justice Works, the National Association for Law Placement and Partnership for Public Service, "survey results suggest that some of the best solutions to the educational debt crisis are loan repayment assistance programs (LRAPs) . . . ." Under The Howard and Phyllis Eisenberg Loan Repayment Assistance Program (LRAP), participating graduates receive a forgivable loan to relieve a portion of their debt obligation.
What is the Loan Repayment Assistance Program?
The Loan Repayment Assistance Program provides direct financial assistance to qualifying Marquette University Law School graduates who enter public interest careers by issuing a forgivable loan to offset ongoing student loan payments. A committee appointed by the Dean administers the program.
What is the Value of LRAP?
The average starting salary for a Marquette graduate practicing in the public interest sector was $42,644. The median starting salary of a Marquette University Law School graduate in 2006 was $52,000 while the average debt was $88,202. Each year the Eisenberg LRAP Fund provides almost $25,000 to help relieve this debt burden. The LRAP is an important step towards ensuring that the next generation of Marquette lawyers will include graduates able to afford public interest careers.
Marquette University Law School graduates of May 2002 or later may qualify if they meet the requirements for "qualifying employment" and "qualifying income."
Qualifying Employment. Marquette University Law School graduates must work full-time (at least 32 hours per week) for a public interest or public service employer and engage in the practice of law or sustantive law-related activites. This includes private and public employers such as legal aid offices, public defenders, prosecutors, and military attorneys.
Qualifying income. A graduate may earn no more than the median gross income of the past year's graduating class, with modifications as explained below.
How much does LRAP pay?
The Loan Repayment Assistance Program provides a forgivable loan equal to fifteen percent of the difference between the past year's MULS graduating class' median starting salary and the gross income of the applicant as adjusted in accordance with these policies and the applicant's financial circumstances, not to exceed the total of loan payments the applicant actually makes during that year. Of course, the amount of funds available for LRAP may not equal the needs of all qualifying applicants, and in all events the Law School has discretion to determine the recipients of funding and the funding levels.
The Loan Repayment Assistance Program ("LRAP") is administered by the LRAP Oversight Committee (the "Committee"), a committee appointed by the Dean of the Marquette University Law School and consisting of the Dean or his/her delegate, two faculty members, two students, and two alumni (at least one of whom is a public interest lawyer). The Committee's responsibilities include but are not limited to:
- Interpreting and promulgating LRAP rules and regulations ;
- Notifying all LRAP participants of LRAP requirements once the application is complete;
- Reporting annually to the Law School community on the progress of LRAP, on any eligibility changes, and on the financial condition of LRAP;
- Considering any special requests for exceptions to stated LRAP eligibility poolicies; and
- Reviewing and adjusting annually the various schedules contained in this document in consideration of prevailing economic conditions.
In addition, the Committee meets separately without its two student members for the purpose of recommending to the Dean the student(s) who will receive funds through LRAP. The student members do not participate in either the deliberation or determination of those who are recommended as recipients of LRAP funds. After reviewing the committee's recommendation, the Dean shall make the final decision.
Graduates must meet each of the following criterion:
- May 2002 or later graduate of Marquette University Law School;
- Employed full-time with a qualifying employer (see below);
- Gross annual income less than the median starting salary of the past year's graduating class,including income from salary, interest, child support, alimony or spousal/domestic partner support, or any other source;
- Must not be delinquent or in default on educational loans; and
- Judicial clerks are not considered during year(s) of clerkship.
Graduates must apply for loan repayment assistance within five (5) years following graduation. Time served in judicial clerkships, or as a volunteer with any agency which tolls the period for repayment under federal loan regulations, tolls the running of this time period. Loan repayment assistance will not be retroactive.
Awards are made twice each year, in June and December. To begin receiving payments in June, applications must be received no later than April 15. To begin receiving payments in December, applications must be received no later than October 15. Applications received after these dates will be delayed until the next payment cycle.
Duration of Eligibility
Participants receive benefits for no more than ten (10) years of qualifying employment. Participants are responsible for repaying any student loan debt still outstanding after their eligibility period has expired.
What is Qualifying Employment?
Qualifying employment includes work for Legal Services, non-profit organizations that qualify for tax exemption under IRS Code Section 501(c)(3), prosecutors, public defender offices, military judge advocate generals, and governmental offices that directly serve individuals with challenges to access to justice. The position must be one that requires a Juris Doctorate degree and admission to the bar. The Committee may consider employment that satisfies the purposes of the LRAP but are not 501(c)(3) nonprofit organizations or governmental organizations. Employers who have as their primary goal service to the traditionally underserved, who can demonstrate that their practice primarily serves the poor and near poor, and who qualify under section 108(f) of the Internal Revenue Code may apply to the program to have their practice deemed "qualifying employment."
Applicants must report income from all sources including salary, interest, alimony, child support, spousal/domestic partner support, or any other source. The Committee reserves the right to deny eligibility in any individual case if projected income does not appear to reflect an applicant's true financial need. In the event of insufficient funding, applicants with the greatest need, lowest income, and a demonstrated commitment to public interest work will be funded first. The size of the overall debt is not dispositive, however, and the Committee will consider whether the debt accumulated during law school was reasonable under the circumstances.
Spouse or Domestic Partner
Married graduates or those with a domestic partner (if residing in a state or local jurisdiction which gives legal recognition to domestic partners) are treated as having the higher of (a) his/her income, or (b) half the joint income if the spouse or domestic partner has a higher income than the graduate.
Example 1: Graduate makes $47,000 annually and spouse/domestic partner makes $30,000. The imputed income is $47,000.
Example 2: Graduate makes $40,000 annually and spouse/domestic partner makes $47,000. The imputed income is ($40,000 47,000) / 2 = $43,500.
If a graduate has one dependent child whom s/he supports and declares on his/her tax return, the Committee will subtract the applicant year's federally allowable dependent exemption from the graduate's allowable gross annual income. The Committee will subtract 1/2 of the federally allowable exemption for each additional dependent child the graduate supports and declares on his/her tax return, up to and including 5 children.
The Committee will add to the allowable gross annual income twelve percent (12%) of the value of a graduate's and a graduate's spouse's/domestic partner's combined assets over $15,000. Assets include equity in a house, other real estate and investment equity, cash, savings and checking accounts, stocks, bonds, and trusts, minus commercial and mortgate debts. If the equity in all assets minus allowable debts totals more than $15,000, twelve percent (12%) of the amount over $15,000 will be added to the adjusted gross annual income.
Short-term emergency loans awarded by the Marquette University Law School while enrolled at the school are specifically excluded from the LRAP program. payment on any other outstanding need-based institutional loan incurred
while enrolled at Marquette University Law School is considered:
- Stafford subsidized and unsubsidized loans borrowed to attend Marquette University Law School are included.
- Perkins or National Defense student loans borrowed to attend Marquette University Law School are included.
- Loans from the Law School or from an external lender are included.
- Bar-related loans are excluded.
- Loans to attend an institution other than Marquette University Law School are not included, except for loans covering participation in any direct cooperative educational program, which are included.
Leaves of Absence
A participant in the LRAP is allowed to take a leave of absence from the program for up to one year for such purposes as pregnancy, family leave, care of small children, illness, disability, relocation, and other appropriate reasons as approved by the LRAP Oversight Committee. During this period the graduate is not eligible for new LRAP assistance or forgiveness of any previous loans, but repayment of LRAP loans is not necessary. If the participant does not return to the program within one year, LRAP loans become payable to the extent not forgiven.
Participants receive assistance in the form of a loan that is forgiven at the end of the year in which the loan is made as long as the participant remains in qualifying employment. On June 20, 2008, the Internal Revenue Service ruled that amounts forgiven under a law school's loan repayment assistance program (LRAP), including Marquette Law School's LRAP program), generally will not be treated as taxable income. Section 108(f) of the Internal Revenue Code details the requirements for tax-free forgiveness. However, participants are urged to consult a tax advisor about their awarded amount.
LRAP participants are issued two (2) checks per year, in June and December, each for one-half of the award amount. Participants are required to execute and return a promissory note prior to disbursement of the loan amount.
Participation in LRAP is on a year-to-year basis only. Once a graduate is admitted to the program, it is his/her responsibility to reapply each year for continued assistance and to certify at the end of every year that he/she has applied the LRAP loan to educational loan payments and has served the entire year in qualifying employment.
Changes in Graduate's Financial Condition
The amounts for which participants are eligible are based upon participant annual gross income and monthly loan payments on covered loans. If either of these figures changes, LRAP eligibility can be affected. Any changes in income or loan payments must be communicated to the Committee immediately or risk suspension from LRAP.
Termination of Participants for Cause
If upon verification the Committee determines that a participant has not used the LRAP proceeds for payment of educational loans, the Committee will terminate the recipient's participation in LRAP and will seek payment of the loan already made.
Repayment of LRAP Loans
Each year of participation in LRAP, the participant will receive a loan for the amount for which s/he is eligible under LRAP regulations. Ordinarily, this loan is forgiven at the end of the eligibility year as long as the participant remains in qualifying employment. However, eligibility can be reduced at any time due to financial or employment changes. In such cases, if the participant does not refund excess money received, the amount of the over award will not be forgiven at the end of the year, and the participant will be obligated to repay that LRAP loan amount with interest within six (6) months thereafter.
At the end of each year for which a loan is granted, the participant is required to complete and submit to the Law School a Certificate of Compliance, certifying that the loan amount has been applied to student loan payments and that they have continued during that year in qualifying employment.
Applications should be submitted as soon as an applicant become eligible. The application must be supported by each of the following:
- federal tax return of applicant and spouse or domestic partner for the prior year, including W-2 statements;
- statement describing any facts that would cause the applicant and/or spouse's or domestic partner's adjusted gross income to differ by more than ten percent (10%) from the figure shown on the most recent tax return;
- employment certification form from the applicant's employer (see attached);
- lender certification form (see attached) for each of the applicant's covered loans; and
- list of assets.
If the applicant did not and was not required to file a tax return for the prior year, s/he must attach a separate sheet with the following statement:
"I hereby declare that by federal law I am not required to file, and did not file, a federal income tax return for the 20__ tax year and therefore cannot supply a copy to the Law School LRAP Oversight Committee as required."
The statement must be signed and dated.
Note: Lenders often take a long time to complete and mail the lender certification form, so applicants should mail the form to their lender as soon as possible.
Subsequent Application Procedure
Participation in LRAP will be on a year-to-year basis only. Once a graduate is admitted to the program, it is his/her responsibility to reapply each year for continued assistance. Each year, at least one month prior to the end of the award year, the participant must submit the following information:
- Federal tax return of participant and spouse or domestic partner for the prior year, including W-2 statements.
- Statement describing any facts that would cause the participant and/or spouse's or domestic partner's adjusted gross income to differ by more than ten percent (10%) from the figure shown on the most recent tax return.
- Employment certification form.
- List of assets.
- Certification of Compliance.
This information will be used to verify income projections reported for participation the previous year. Appropriate adjustments will be made if the information provided differs substantially from initial projections.
By implementing this program, Marquette University Law School makes no guarantees as to the future funding or permanent existence of this program. The Law School reserves the right to terminate or modify the program or any of its provisions at any time. Benefits will be paid only to the extent that funds are available and the program continues to exist.