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Participants in LIPP are expected to contribute a percentage of their monthly household income toward their monthly loan payments. Most participants find they are able to manage the participant contribution expected of them.

In an effort to demonstrate the potential long-term benefits of LIPP, we have created several examples to show how graduates in varying circumstances would fare under LIPP. For each of these examples we have made the following assumptions:

  • We used the 2019-2020 LIPP program guidelines and began deducting a Longevity Allowance as of the fifth year in LIPP for each example participant.
  • We assumed salaries are increasing with the cost of living (3% per year), except in the DOJ attorney example. If actual annual salaries increase by more than 3%, actual LIPP benefits will be lower than these estimates.
  • We used a total borrowing amount of $170,866, the average law school borrowing of the HLS class of 2020, which equates to 120 monthly payments of $2,067. The total amount repaid on this debt after 10 years will be $248,120 due to accumulated interest. Note that graduates with higher debt than this assumed average would receive more LIPP assistance, with all other assumptions being unchanged.
  • All loan repayments are calculated using the current interest rates on federal loans, assuming a 10-year repayment plan (120 payments total).
  • We assumed all borrowing was eligible for LIPP assistance.

Scenarios:

  1. Assistant District Attorney, single
  2. Assistant District Attorney, married
  3. Legal Services Attorney, single
  4. Attorney at Small Private Firm, single
  5. Attorney, U.S. Department of Justice, single

Assistant District Attorney, single

  • Starting income of $64,300.
  • With annual raises of 3%, after 10 years she will be earning an income of almost $86,500.

Based on a starting income of $64,300 this graduate will contribute $443.33 each month toward her loans and LIPP will provide her with assistance to cover the remaining $1,623.67 of her monthly payment. If she remains in LIPP for 10 years and her salary increases 3% each year, overall she will be awarded about $157,269 to cover her loan payments and will be expected to pay about $90,851 out of pocket. This means HLS will repay 63% of her loans.

10 Years in LIPP

If she moves on to a higher paying job after four years and leaves LIPP, she will have received about $73,245 during her years of participation. Because LIPP has no “minimum term” requirement, she will not have to repay any of the LIPP assistance for which she was eligible. Even though she is responsible for the entirety of her future loan payments after leaving LIPP, by the time she completes the 10-year repayment of her loans HLS will have still paid off about 30% of her loan debt.

4 Years in LIPP

Assistant District Attorney, married

  • Starting income of $64,300; spouse earns $75,000, for a combined household income of $139,300.
  • With annual raises of 3%, after 10 years he will be earning an income of almost $86,500, and his spouse will be earning an income of over $100,700, for a combined household income of just over $187,200.

This graduate will contribute $621.67 each month toward his loans, which is based on half of the starting household income of $139,300. LIPP will provide him with assistance to cover the remaining $1,445.33 of his monthly payment. If he remains in LIPP for 10 years and his spouse receives a 3% annual raise, this participant will be awarded about $132,736 to cover his loan payments and will be expected to pay a total of $115,384 out of pocket. This means HLS will repay 53% of his loans.

10 Years in LIPP

If this couple has children during the period in LIPP, the graduate can qualify for LIPP assistance during a parental leave, or while working part-time. He would also receive allowances against his share of the household income for childcare expenses which could make both his monthly Participant Contribution and his out-of-pocket expense significantly lower. In this example, if the graduate and his spouse had one child in year 5 of LIPP participation and another in year 8 and they reported Dependent Care expenses to the office each of those years, then with all else being the same  the participant would be awarded about $189,710 and his total out-of-pocket expense would drop to $58,410. This means HLS would repay 76% of his loans.

10 YEARS IN LIPP, with children

If he moves on to a higher paying job after four years and leaves LIPP, he will have received about $78,107 during his years of participation. Because LIPP has no “minimum term” requirement, he will not have to repay any of the LIPP assistance for which he was eligible. Even though he is responsible for the entirety of his future loan payments after leaving LIPP, once he completes the 10-year repayment of his loans, HLS will have paid off about 31% of his loan debt.

4 Years in LIPP

Legal Services Attorney, single

  • Starting income of $55,000.
  • With annual raises of 3%, after 10 years he will be earning an income of almost $73,900.

Based on a starting salary of $55,000 this graduate will contribute $133.33 towards his monthly loan obligations, and LIPP will provide him with assistance to cover the remaining $1,933.67 of his monthly payment. If he remains in LIPP for 10 years with 3% raises annually, he will be awarded $199,914 to cover his loan payments and will be expected to pay $48,205 out of pocket. This means HLS will repay 80% of his loans.

10 Years in LIPP

If he moves on to a higher paying job after four years and leaves LIPP, he will have received about $88,808 during his years of participation. Because LIPP has no “minimum term” requirement he will not have to repay any of the LIPP assistance for which he was eligible. Even though he is responsible for the entirety of his future loan payments after leaving LIPP, once he completes the 10-year repayment of his loans, HLS will have paid off about 36% of his loan debt.

4 Years in LIPP

Attorney at Small Private Firm, single

  • Starting income of $75,000.
  • With annual raises of 3%, after 10 years she will be earning an income of over $100,500.

Based on a starting salary of $75,000 this graduate will contribute $800 each month towards her loans, and LIPP will provide her with assistance to cover the remaining $1,267 of her monthly payment. If she remains in LIPP for 10 years, she will be awarded about $108,203 to cover her loan payments and will be expected to pay about $139,916 out of pocket. This means HLS will repay 44% of her loans.

10 Years in LIPP

If she moves on to a higher paying job after four years and leaves LIPP, she will have received about $55,339 during her years of participation. Because LIPP has no “minimum term” requirement, she will not have to repay any of the LIPP assistance for which she was eligible. Even though she is responsible for the entirety of her future loan payments after leaving LIPP, once she completes the 10-year repayment of her loans, HLS will have paid off about 22% of her loan debt.

4 Years in LIPP

Attorney, U.S. Department of Justice, single

  • Starting income of $55,204, based on the 2020 Federal GS salary scale – GS-11, Step 1.
  • Raises for DOJ attorneys are typically more frequent and larger in size, so after a year she could receive a raise to $66,167, and one year after that, another raise to $78,681; her next pay raise, 1 year later, would bring her to $92,977, her raise a year after that would bring her to GS-15, Step 1 and an income of $109,366, then her next raise roughly a year later would place her at an income at which she would no longer qualify for LIPP assistance based on her level of loan debt. These incomes do not account for COLA increases.

At a starting salary of $55,204 this graduate will contribute $140.13 each month toward her loans, rising to $1,945.5 at an income of $100,366. LIPP will provide her with assistance to cover the remaining $1,961.87 and $156.5 (respectively, and with incremental changes in between those two figures) of her monthly payment over time. If she remains in LIPP for 5 years, she will be awarded about $65,102 to cover her loan payments and will be expected to pay about $58,958 out of pocket. This means HLS will repay 52.5% of the loan payments made while she is in LIPP.

After 5 Years in LIPP at DOJ

Once she no longer qualifies for LIPP, she will not have to repay any of the LIPP assistance for which she was eligible. She will, however, have to practice good money management skills in the first few years after moving beyond LIPP eligibility in order to meet her expenses and monthly loan payments. Still, the long-term outlook for HLS graduates in federal government positions is good; they typically receive income increases above the annual cost of living rate, and the portion of their post-LIPP income they must devote to loan repayment gradually declines. There are also federal loan repayment assistance programs for which federal employees can qualify after LIPP, and HLS currently offers a competitive fellowship program, the Heyman Fellowship, for graduates beginning careers in federal government. When this attorney completes the 10-year repayment of her loans, HLS will have paid off about 26% of her loan debt.

After 10 Years at DOJ

If you want to learn more about LIPP, begin here.