Graduates who start their own practice or are otherwise self-employed should consult with the LIPP staff about their situation and review the law-relatedness requirement for individuals working in the private sector. When writing to obtain approval for self-employed positions please include the following information as a starting point:
- When did you start your organization?
- How is your organization structured (sole proprietorship, partnership, etc.)?
- What is the tax filing status of your organization?
- What is your position within the organization? Include a job description.
- Please detail how your position within the organization meets the law-relatedness criteria.
- Please provide an estimate of your organization’s income, expenses and assets for the last six months and projections for the next year.
In general, LIPP assistance is not available during a business start-up period and the graduate is advised to pursue loan forbearance from each lender. The LIPP Committee will not deem the start-up period to have begun until you are devoting at least part-time (17.5 hours/week) hours to the success of the company and pursuing the business as at least a part-time, compensated endeavor. Once a business tax return and/or Schedule C are filed, the Committee will be able to evaluate an applicant’s financial situation and determine whether LIPP assistance is available. Further documentation beyond the standard application may be required (bank statements, additional verification of employment, etc), and self-employed graduates should not rely on LIPP support until participation is approved by the Student Financial Services Committee.
LIPP deteminations of eligibility for self-employed participants are generally based on estimates of future income. To create the initial eligibility amount we will use reported income and expenses from the preceding six months as well estimates of income and expenses for the next six months. A maximum of 25% of income will be allowed as expenses. Estimated LIPP amounts are always verified and adjusted retroactively if necessary, once actual earnings can be documented from tax returns.