FAQs

Frequently Asked Questions

This list of LRAP FAQs will help you become better acquainted with the Loan Repayment Assistance Program (LRAP). Please understand that, while this list may not cover all eventual questions and scenarios, and your individual LRAP Terms & Conditions may vary, the information below is designed to answer most of your preliminary questions about how the program works and how you can receive LRAP assistance. If you have any additional questions, or need more information, please feel free to contact us at your convenience. We look forward to helping you follow your dreams after graduation. For more information:

LRAP 101

Who is LRAP Association?

LRAP Association collaborates with colleges and universities across the United States to help students with the burden of student loans. We provide a unique and effective solution for reducing the anxiety of student loans, empowering students to enroll and graduate from their first-choice educational institution. For more information, please visit www.myLRAP.org  

Why did LRAP Association start?

We recognize that many students and their families have concerns about the amount of student loans required to finance higher education. We are confident in the economic value and life-changing power of higher education and want to help students pursue their dreams. Many graduates look forward to finding meaningful work in areas like education, social work, and public service – occupations that do not always provide high starting salaries but can offer rewarding and enriching careers. We want you to have all the available options for careers after graduation, while ensuring student loan debt will not deter you from making the decisions that are in the best interest of your successful future.  

What is LRAP?

The Loan Repayment Assistance Program (LRAP) is a program that helps college graduates repay their student loans. LRAP provides a financial safety net that helps students focus on their academics while in school and, if a student’s income after graduation is low, helps graduates repay their loans.

How does LRAP work?

If a student graduates to a modest income, LRAP helps them repay their federal, private and parent PLUS loans. Students must attend and graduate from the college or university that awarded them the LRAP. After graduation, they must work at least ¾ time to receive assistance (i.e. average at least 30 out of 40 hours per week). If a graduate’s income is below the Upper Income Threshold specified in their LRAP Award Letter, the graduate can then receive loan repayment assistance in the form of quarterly reimbursements on their student loan payments. For complete details and eligibility requirements of the program, please refer to your LRAP Award Letter and Terms & Conditions.

Loans

Which loans will LRAP cover?

LRAP covers all federal, private alternative and Parent PLUS loans authorized through the financial aid office at your LRAP-awarding college or university.

Which repayment plans should I consider before my loan repayments begin?

To receive LRAP assistance on any loan, it must be on a 10+ year repayment term.

For any federal loans, your assistance will be calculated after taking into account any Federal income-driven repayment plan for which you qualify (e.g. Pay as Your Earn or Income Based Repayment), as specified in your LRAP Award Letter and Terms & Conditions.  That said, you are not required to enroll in such a program. Some graduates will choose to make overpayments on their monthly payment amounts, to pay their loans off sooner with the understanding that LRAP assistance will only be provided on the required portion of that amount.  You are welcome to do the same.

You can view your current eligibility for these programs and sign up by visiting the U.S Department of Education website, signing in, and submitting a Repayment Plan Request.  If you do not know your Federal Student Aid PIN, you can find it here.

I would like to pay ahead on my student and parent loans whenever possible. Will LRAP reimburse for those payments?

No.  You are welcome to pay ahead or make overpayments, understanding that LRAP only uses your standard required amount due each month, when determining your assistance.

Is it okay to consolidate my student loans?

You are welcome to consolidate your student loans, so long as you do not consolidate your loans with another individual’s loans, or into a mortgage or second mortgage.

Employment and Income

Do I have to choose a job in my major field of study or in my career path?

No.  You are welcome to work in any field or career path you choose.

Can I work more than 1 job to meet my hours requirement?

Yes.  You are welcome to work as many jobs as you choose.

Can I be self-employed?

Generally, no. While there may be some exceptions, most self-employed individuals (including independent contractors, as defined by the IRS) are not eligible for LRAP assistance. Please see your LRAP Award Letter and Terms & Conditions for full details.

Can I work for family?

No. Individuals working for family, or a family-controlled business, are not eligible for LRAP assistance.

What if I lose my job? How will my assistance eligibility change?

You are not eligible for repayment assistance during periods of unemployment.  To qualify for repayment assistance in any quarter and year after graduation, you must be employed at least ¾ time (averaging 30 hours per week) for at least ¾ of the year (i.e. 9 months). That said, you may be able to put your loans into deferment, and not be required to make monthly payments, until you secure a new job.

Does volunteer service count towards work hours?

No.  Employment, for purposes of qualifying to receive assistance under this program, must pay at least the federal minimum wage.

Do I still get credit for hours worked when I take vacation time?

Paid vacation hours for salaried positions are included in the eligibility calculation for time worked.

Is my LRAP assistance included in my income, when comparing that amount against my income thresholds?

No. We do not include your LRAP assistance when calculating your income or assistance relative to your income thresholds.

LRAP Assistance

How does LRAP assistance work?

LRAP assistance is provided (in the form of quarterly reimbursements) after the end of each calendar quarter in which you have made payments and are eligible to receive assistance. If your annualized income is less than your Lower Income Threshold, and you are working at least an average of 40 hours per week, you will be eligible for full reimbursement on your loan payments for that quarter.

As your income surpasses the Lower Income Threshold, and moves towards the Upper Income Threshold, your assistance will be adjusted proportionally (e.g. if you are earning an income half-way between your Upper and Lower Income Thresholds, you will be eligible for 50% reimbursement).

Assistance will be proportionately reduced if you work an average of less than 40 hours per week (i.e. if you work 30 hours per week,the minimum to remain eligible, you will be eligible for 75% assistance). Assistance continues until your income surpasses the Upper Income Threshold, or your loans are paid off entirely.

How long do I have to quality for LRAP assistance after graduation?

In general, you must initially qualify for assistance within 18 months after graduation. If you have not qualified by that point, and are not engaging in any Extension Activities (e.g. graduate school), then you will not qualify for assistance in the future. Please note that your specific eligibility window, which is specified in your LRAP Offer Letter and Terms & Conditions, may vary.

What documentation do I need to provide each quarter for proof of loan payments and income?

Each quarter we need documentation confirming your loan payments (including current principal balance) and income and hours-worked (i.e. copies of your paystubs). When you request assistance for the first time, we will also need the following information: loan type (federal, private, etc.), original loan amount, current loan amount, loan start date, loan term (i.e. how long you will repaying the loan, generally specified in months), and annual interest rate, for each of your eligible loans.

What if I make more than the Upper Income Threshold in one year, and then change jobs to earn an income below the Upper Income Threshold at a later date?

If your actual income in any year exceeds the Upper Income Threshold, you will not be eligible for assistance at any point in the future, even if your income drops back within the eligible income range.

Can I be reimbursed for loan payments made before my grace period ends?

No. Most loans do not enter into repayment status for 6 months following graduation. Thus, with a May graduation, repayment should begin in November or December, after which you can request assistance in January for your November and/or December payments. Any voluntary payments made before the loans enter into repayment status, or payments made beyond the standard amount due each month, will not be eligible for assistance.

How is assistance affected by the loan limits specified in my Terms and Conditions?

If your LRAP Terms & Conditions specify a yearly limit (e.g. $17,000), but you borrow more (e.g. $20,000) in a specific year, then only the limit-specified proportion of the payments would be eligible for reimbursement (e.g. 17/20 = 85%). Likewise, if your LRAP Terms & Conditions reference an aggregate limit (e.g. $70,000), and you do not borrow more than your yearly limit, but borrow more in total (e.g. $80,000), across 5-6 years, then we would only cover the limit-specified proportion of your total loan payments each quarter (e.g. 70/80 = 87.5%).

Is my Loan Repayment Assistance taxable?

Typically yes. Individuals working for a qualified employer, as defined by the Internal Revenue Service however, may receive tax-free repayment assistance.  We encourage you to consult with a tax expert to determine your tax liability throughout your participation in the program.  Also to the extent this repayment assistance will be considered taxable income for you, you may want to consider modifying your withholding elections, with your employer, to have more taxes withheld during the year.  Please note that we will not include your LRAP assistance when determining your assistance, relative to your income thresholds.

How do job benefits (health care, housing, etc.) affect assistance?

Any substantial non-taxed income (e.g. housing allowance, living stipend, etc.) is included as part of your total income for purposes of calculating repayment assistance, however we exclude employer paid healthcare.

Continuing Education

What if I want to go back for a second undergraduate degree? Are those loans covered?

No.  LRAP only covers loans taken out for your first bachelor’s degree at your LRAP-awarding college or university. Please keep in mind that, if you decide to pursue a second degree, your LRAP benefits will be put on “pause” while you are enrolled, and your loan payments may be placed in educational deferment (please contact your loan servicer for more details on your options).

Does attending graduate school affect my eligibility? Are my graduate school loans covered?

Loans borrowed for a graduate degree are not eligible for LRAP assistance. In general, you must initially qualify for assistance within 18 months after you graduate.  However, if you enroll full-time in graduate school, we will extend this eligibility period for the length of time you are enrolled.

Marriage and Children

What happens if I get married?

Married LRAP individuals remain eligible for assistance, which will be calculated based on the greater of your individual income or one-half of your total household income (including spouse’s income).

What happens if I have children?

You remain eligible for repayment assistance based on your total household income if you are at home raising children and your spouse’s employment qualifies (e.g., he or she works enough hours and months, does not work for family, is not self-employed and is a college graduate with a bachelor’s degree), and neither you nor your spouse is enrolled as a graduate student.