Eligible borrowing includes annual law school education loans certified by HLS Student Financial Services, up to the approved student financial aid budget minus the calculated LIPP Student Contribution and any HLS Grant assistance. Borrowing done to replace assessed parent resources is eligible for LIPP assistance. In addition, up to $2,000 in borrowing for purchasing a computer (when done through the computer reimbursement/cash advance process) and up to $10,000 in borrowing for bar-related expenses are LIPP eligible. Up to $30,000 of combined undergraduate debt and debt incurred while pursuing an eligible joint degree with another Harvard graduate school is also eligible for LIPP coverage.
LIPP Eligible Borrowing
Student Financial Services calculates a student contribution based on income and assets each year that you are a student to determine eligibility for need-based HLS Grant aid, and a separate LIPP Student contribution to determine the eligibility of loans for LIPP coverage. For students who worked a full year or more after completing an undergraduate degree and prior to entering HLS, we protect (exclude) $8,000 of assets for each full year (consecutive 12 months) worked when calculating the LIPP Student Contribution. Borrowing done to replace non-protected assets and any student contribution from income continues to be ineligible for LIPP assistance.
Current students interested in their LIPP eligible borrowing amount for the current academic year should log into MyHLS Financial Aid; maximum LIPP Eligible borrowing information may be found on the “Messages” tab. Alumni will not have access to this site and will need to contact the LIPP Staff for information regarding their eligible borrowing.
LIPP Ineligible Borrowing
LIPP assistance is not available for loans from family and friends, for personal loans from banks or other sources, or for other graduate school debt except as specified above. Undergraduate and joint-Harvard-degree borrowing in excess of $30,000 is not eligible for LIPP coverage. Loans taken out to replace one’s own unprotected assets or imputed summer savings (based on documented summer earnings), or for living expenses above the standard financial aid budget, are also not eligible for LIPP. For married students, the spouseâ’s contribution is considered part of the student contribution and borrowing to replace this amount is not eligible for LIPP.
There is no retroactive LIPP assistance and no LIPP assistance available for periods of loan forbearance, deferment or during grace periods. Interest accrued due to forbearance, deferment, significantly extended repayment terms (i.e. interest only plans), or other periods of non-payment, and penalties for late payment or default on education loans are not eligible for LIPP coverage. In order to remain eligible for LIPP, graduates must provide proof of good standing from the servicers of all applicable loans, including undergraduate/joint degree loans, and may not have an outstanding term bill balance with Harvard University.
LIPP Consolidation and Refinance
Consolidation and refinancing can be a beneficial way to reduce the overall and monthly costs of your educational borrowing. For this reason, so long as the consolidation/refinance is specific to your education loans and maintains the basic characteristics of an education loan it will not affect your eligibility for LIPP assistance. To ensure your new loan will remain eligible for LIPP you should contact the LIPP office prior to initiating the consolidation/refinance. In order to remain LIPP eligible, your new consolidated/refinanced loan must meet the following conditions:
- It must have a repayment term of no less than 10 years
- It must have a fixed interest rate (some consolidation loans offer variable rates which carry substantial risk of significant interest rate increases in the future)
For your own protection, the benefits that you should be most concerned about maintaining are the 10 year repayment term, the ability to pre-pay on your loans, and your forbearance and deferment options. You should be aware that a consolidation will make you ineligible for the Federal Public Interest Loan Forgiveness Program, since only Federal student loans are covered by that program. Additionally, many consolidation or refinance loans do not offer forbearance or deferment options. There is a substantial risk to giving up these options, because you will not be eligible for a temporary suspension of payment should you need one for financial reasons such as unemployment or returning to school. Should you choose to return for a PhD you will not be eligible for LIPP coverage during the first 2 years of your PhD program on any consolidated/refinanced loan which does not have an in-school deferment option; you would need to make arrangements to cover those payments without LIPP assistance.