HARVARD KENNEDY SCHOOL | STUDENT FINANCIAL SERVICES Federal Public Service Loan Forgiveness (pslf) Program and Harvard Kennedy School Loan Repayment Assistance Program (lrap) Federal Public Service Loan Forgiveness (pslf) Program* The United States Congress created the pslf Program to Which public service organizations qualify? encourage domestic borrowers to pursue careers in public service. The pslf Program forgives student loans, tax free, — U.S. federal, state, local, or tribal governments, including if borrowers work full time in a qualifying public service the military, public schools, and colleges position for at least 10 years while repaying loans through — Tax-exempt 501(c)(3) nonprofit organizations an income-driven repayment (idr) plan. Details about the program are available at https://studentaid.ed.gov/sa/ — AmeriCorps or Peace Corps repay-loans/forgiveness-cancellation/public-service. If an organization does not meet the above criteria, it may qualify so long as it meets two conditions: How does the PSLF Program work? 1. It is not “a business organized for profit, a labor union, a The amount forgiven through the pslf Program is a partisan political organization, or an organization engaged borrower’s remaining loan balance after he or she makes in religious activities, unless the qualifying activities are 120 qualifying payments through an income-based unrelated to religious instruction, worship services, or any repayment plan. The amount to be repaid is between 10 form of proselytizing” (CFR 685.219). and 15 percent of a borrower’s discretionary income, 2. It’s primary purpose is to provide for: early childhood depending on the payment plan. education; emergency management; individuals with Sample forgiven loan amounts* disabilities or the elderly; law enforcement; military service; public education; public health; public interest adjusted gross amount borrowed amount borrowed law services; public library services; public safety; or income (agi) $70,000 $130,000 school library or other school-based services. $40,000 $73,117 $196,839 * Congress has proposed discontinuing pslf. Students will receive updates as more information becomes available. $60,000 $25,607 $143,444 $80,000 $3,961 $88,676 Loan repayment for federal employees $100,000 $0 $45,420 Some U.S. federal agencies provide their employees with loan repayment assistance of up to $10,000 per year or a * Factoring in an annual 3% salary increase for cost-of-living adjustment, a 15% raise every three years, and loan balances with a 7.5% interest rate. maximum of $60,000. Employees must serve in their Monthly payments under the standard 10-year plan are $830 for $70,000 positions for at least three years to be eligible. Visit www. borrowed and $1,544 for $130,000 borrowed. opm.gov/oca/pay/studentloan/index.asp for details. Which loans qualify? Only direct federal loans qualify for forgiveness. Perkins and other federal loans borrowed from private lenders must be consolidated into a direct loan to qualify for the pslf. HARVARD KENNEDY SCHOOL | STUDENT FINANCIAL SERVICES pslf and lrap HKS Loan Repayment Assistance Program (lrap) The mission of Harvard Kennedy School is to train enlight- Income determination ened public leaders and generate the ideas that provide Income is defined as an applicant’s gross annualized income solutions to our most challenging public problems. hks (monthly income x 12) as well as that of his or her spouse or recognizes graduates often must balance significant education registered domestic partner. Income also includes any debt with working in modest-paying public sector jobs. lrap housing benefits, per diem payments, location adjustments, helps graduates — domestic and international — who are income-generating assets (i.e., interest payments, stock working in the public or nonprofit sectors with repaying their dividends, trusts, etc.), rental income, gambling winnings, traditional educational loans borrowed to attend hks. and other types of recurring sources of financial support. Recipients may participate in the program for up to five years. hks reserves the right to change the program’s terms; limit lrap also considers assets as part of a participant’s income. participation, which may include funding only a portion of All assets, excluding primary residences and formal retirement a participant’s need; limit the number of years a participant plans, are included. Single participants receive $10,000 may take part in the program; and limit the maximum in asset protection while those who are married receive annual funding. $15,000. Any asset values above these protections are added to the household income to arrive at an “eligible Eligible employment lrap income.” Applicants must be employed full time directly by a nonprofit A spouse or registered domestic partner’s required annual or government employer, and positions must be at least six loan payments are subtracted from the household income months in duration. For-profit employment is not eligible for before determining the “eligible LRAP income.” lrap even if the work being performed is for a nonprofit or governmental entity. For example, an individual working for LRAP examples an employment agency but assigned to a long-term position Single participant with $5,000 in liquid assets and an annual with an eligible employer would not be eligible for lrap. $10,000 loan payment. Applicants working on political campaigns must serve in Income: $38,000 a paid position for at least six months to qualify. Unpaid volunteer positions are not eligible. Liquid assets (after protection): $0 Participation in lrap is limited to five years. Participants Eligible lrap income: $38,000 cannot receive lrap support beyond this timeframe. Percentage of coverage: 85% Eligible loans Annual lrap award: $8,500 Only educational loans certified by the hks Student Financial Married participant with $23,200 in liquid assets and an Services (sfs) office that were borrowed to attend hks will be annual $10,000 loan payment. considered. Assistance is not provided for loans incurred to attend other programs, including joint and concurrent degree Income: $45,000 programs. Applicants will not qualify for lrap if they have Spousal income: $33,600 defaulted or are delinquent on their loan payments. Liquid assets (after protection): $8,200 A borrower’s lrap coverage is based on the lesser of: Spouse’s annual loan payments: ($6,800) — His or her required monthly payment on loans borrowed to attend hks Eligible lrap income: $80,000 — The monthly amount paid if he or she had selected a Percentage of coverage: 25% 10-year repayment plan upon initially entering repayment Annual lrap award: $2,500 PAGE 2 HARVARD KENNEDY SCHOOL | STUDENT FINANCIAL SERVICES pslf and lrap Income Level and Percentage of Loan Covered Single participants LRAP application process Gross annualized income and assets (above cap) Applicants must submit the following documentation dated $32,000 100% $46,000 65% $60,000 30% no earlier than October 1 for the January-June application or June 1 for the July-December application: $33,000 98% $47,000 63% $61,000 25% $34,000 95% $48,000 60% $62,000 25% — Completed lrap application $35,000 93% $49,000 58% $63,000 25% — Statement of purpose $36,000 90% $50,000 55% $64,000 25% — Employment certification form $37,000 88% $51,000 53% $65,000 25% — Most recent federal tax return (including all schedules) $38,000 85% $52,000 50% $66,000 25% — Loan statement(s) $39,000 83% $53,000 48% $67,000 25% — Spouse/Partner income documentation (if applicable) $40,000 80% $54,000 45% $68,000 25% Application deadlines $41,000 78% $55,000 42% $69,000 25% Applications are due by November 15 for a December 15 $42,000 75% $56,000 40% $70,000 25% funding decision on January-June awards. Re-certifications $43,000 73% $57,000 37% $70,001+ 0% are due by June 15 for July-December awards. All applications $44,000 70% $58,000 35% must be received by these dates. Late applications will not be considered. $45,000 68% $59,000 32% Funding decisions Married participants Applicants are notified by December 15 of funding decisions if Gross annualized household income and assets (above cap) they submitted January-June applications; payments are prepared in January. If they submitted July-December $50,000 100% $64,000 61% $78,000 25% applications, payments are issued the end of July. $51,000 100% $65,000 58% $79,000 25% $52,000 97% $66,000 55% $80,000 25% Change in eligibility $53,000 94% $67,000 52% $81,000 25% If applicants leave qualifying employment during the period in which they receive assistance, they are required to notify $54,000 91% $68,000 49% $82,000 25% the hks Student Financial Services office to determine the $55,000 88% $69,000 46% $83,000 25% amount of repayment. Additionally, if income or required $56,000 85% $70,000 43% $84,000 25% monthly loan payments change, they must report these changes to reevaluate their eligibility. $57,000 82% $71,000 40% $85,000 25% $58,000 79% $72,000 37% $86,000 25% $59,000 76% $73,000 34% $87,000 25% $60,000 73% $74,000 31% $88,000 25% $61,000 70% $75,000 28% $89,000 25% $62,000 67% $76,000 25% $90,000 25% $63,000 64% $77,000 25% $90,001+ 0% PAGE 3 HARVARD KENNEDY SCHOOL | STUDENT FINANCIAL SERVICES pslf and lrap Facts for Domestic and International LRAP Participants Domestic International Average annual $3,678 $2,928 lrap payment Approx. 53% 83% percentage of loan payment covered by lrap Average $54,885 $35,858 combined income/ assets to be lrap eligible Average student $497 $289 monthly loan payment LRAP Participants by Sector Nonprofits Public State Domestic 47% and Local 49% 13% Public Federal 5% Public International International 51% 35% “ lrap gave me the financial confidence to take a career risk, leave the law firm world, and jump right into public service.” – Andrew Grotto, former lrap participant Student Financial Services Office Harvard Kennedy School 124 Mt.