LIPP is not intended to cover most judicial clerkships, since graduates who serve as clerks usually proceed immediately to higher-paying positions.* Graduates moving into non-LIPP eligible positions after a clerkship may consult with the LIPP office regarding alternative repayment options such as forbearance and extended payment plans. However, graduates who take clerkships and intend to take a position through which they will maintain their LIPP eligibility after the clerkship is completed are eligible with the following provisions:
- LIPP will provide clerkship loans during the period of the clerkship to cover any difference between the educational loan payments due in that year that qualify for LIPP coverage and the repayments required under LIPP.
- LIPP eligibility is contingent on employment, current required loan payments, income and assets, as well as the same factors for a spouse, if applicable.**
- For those who participate in LIPP after the clerkship, the LIPP assistance disbursed during the clerkship will be forgiven at the end of the first full year of eligibility in the post-clerkship position. For two-year clerkships, the second year of clerkship LIPP assistance will be forgiven at the end of the second full year of LIPP eligibility in the post-clerkship position.
Repayment of LIPP Clerkship Loans by participants who do not continue in a position that qualifies them for a LIPP benefit while they still owe a clerkship repayment obligation will be based on the amount of income, including bonus pay, earned following the clerkship. When considering income a full-time equivalent is always used. Spousal income is also considered when determining the repayment amount. The amount repaid will be the difference between the documented amount of income (including bonus pay) in the ineligible position and the highest income at which the participant would be LIPP eligible, or the full amount of any Clerkship Loan(s), whichever is lower.
The amount due will become immediately repayable and converted to a loan with interest compounded (at the rate then used by HLS for market loans) over the clerkship period capitalized. In addition, a finance charge will be added to the repayment amount, before compounding, of $250 or 10% of the repayment amount, whichever is higher. This loan is not eligible for future LIPP assistance and is repayable over 10 years.
* Student Financial Services offers advice on how to handle the repayment of loans during a clerkship for clerks who will be subsequently entering non-LIPP positions.
** Should a participant become ineligible for a LIPP benefit due to the value of their assets while they still owe a clerkship repayment obligation either during or following their clerkship, or because they accept a position which does not meet the LIPP employment eligibility guidelines, the full balance of the clerkship assistance received will become immediately repayable.