A LIPP participant can exit LIPP at any time, for any reason. Typically, a participant will exit LIPP because they have become ineligible due to a change in employment, income, marital status, assets or required loan payments. Depending on the timing and nature of the change, there may be a re-calculation of eligibility to determine if a balance is owed back.
In order to determine if there is a payment due the participant is required to fill out an exit application through the SFS Self-Service Portal (similar to applying for LIPP) and will need to submit a loan payment history for the most recent award period in which they received LIPP. If the participant is exiting immediately following a clerkship they will also need to submit the post-clerkship employer certification form, and a post-clerkship spouse income form (if married).
Below is a basic example of an exit calculation for someone who became ineligible for LIPP due to a salary increase.
Participant was awarded for the July – December award period based on the following information:
- Yearly gross salary: $80,000
- Equal to $966.67/month participant contribution
- Required loan payments: $2,500/month
- LIPP Award: $9,200
- (Monthly loan payment x 6 months) – (Participant contribution x 6 months)
Participant changes jobs on September 15th and their new salary is $150,000 which makes them ineligible for LIPP. They will be required to submit an exit application and the following adjustment will be made:
- They are eligible for LIPP for 2.5 months (7/1-9/15)
- Total participant contribution = $2,416.67 (966.67 x 2.5)
- New LIPP eligibility for the period is $3,833
- (Monthly loan payment x 2.5 months) – (participant contribution x 2.5 months)
- Balance owed = $5,367
- (Initial award – new eligibility)