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Income Guidelines

Definitions

Definition of Income

Income is considered to be your annual compensation from yours' (and your spouse's) employers. In addition to direct salary, income includes any housing benefits, per diem payments, location adjustments, income generated from assets (interest payments, stock dividends, trusts, etc), rental income, gambling winnings, and any other types of recurring financial sources of support.

Definition of Assets

The LRAP program does not consider the home which you reside in--and which is considered you primary residence for IRS purposes--as an asset. Nor does it consider assets saved in a formal retirement plan such as a 401(k) or a 403(b). All other assets are considered assets for purposes of LRAP eligibility including:

• Cash and Savings
• Stocks and Bonds
• Real estate
• Houses (except for house that is considered your primary residence by the IRS)
• Trusts
• Any other assets held by you or your spouse
• Asset Allowances

HKS recognizes the need for individuals to maintain some form of savings in the event of unforeseen circumstances. Therefore the school maintains an asset protection allowance for LRAP applicants. After determining the total value of your assets, the LRAP Committee subtracts $10,000 for unmarried and $15,000 for married applicants.

Percent of Loans Covered by Income and Liquid Assets Level

Single Applicants

Income and Liquid Assets	New Coverage
$     32,000	100%
$     33,000	95%
$     34,000	90%
$     35,000	85%
$     36,000	80%
$     37,000	75%
$     38,000	70%
$     39,000	65%
$     40,000	60%
$     41,000	55%
$     42,000	50%
$     43,000	45%
$     44,000	40%
$     45,000	35%
$     46,000	30%
$     47,000	25%
$     48,000	25%
$     49,000	25%
$     50,000	25%
$      51,000	25%
$      52,000	25%
$      53,000	25%
$      54,000	25%
$      55,000	25%
$      56,000	25%
$      57,000	25%
$      58,000	25%
$      59,000	25%
$      60,000	25%

Married Applicants*

Income and Liquid Assets	New Coverage
$     50,000	100%
$     51,000	100%
$     52,000	97%
$     53,000	94%
$     54,000	91%
$     55,000	88%
$     56,000	85%
$     57,000	82%
$     58,000	79%
$     59,000	76%
$     60,000	73%
$     61,000	70%
$     62,000	67%
$     63,000	64%
$     64,000	61%
$     65,000	58%
$     66,000	55%
$     67,000	52%
$     68,000	49%
$     69,000	46%
$     70,000	43%
$     71,000	40%
$     72,000	37%
$     73,000	34%
$     74,000	31%
$     75,000	28%
$     76,000	25%
$     77,000	25%
$     78,000	25%
$     79,000	25%
$     80,000	25%

 *Or unmarried applicants with legally-related dependents under the age of 18, living with the applicant, and deriving 100% of their support from the applicant.

Previous Eligibility Distribution Guidelines

Single Applicants

Total Income and Liquid Assets	% of Loan Payment Covered by LRAP
$0 to $32,000	100%
$32,001 to $39,000	75%
$39,001 to $45,000	50%
$45,001 to $50,000	25%

Married Applicants*

Total Income and Liquid Assets	% of Loan Payment Covered by LRAP
$0 to $51,000	100%
$51,001 to $62,000	75%
$62,001 to $72,000	50%
$72,001 to $80,000	25%

*Or unmarried applicants with legally-related dependents under the age of 18, living with the applicant, and deriving 100% of their support from the applicant.

LRAP coverage is determined based on income and assets.

Examples

Example (unmarried applicant)

An unmarried applicant has $2,000 in savings, $5,000 in stocks, and $9,000 in equity in a second home, the modified assets for purposes of LRAP eligibility would be ($2,000 + $5,000 + $9,000) - $10,000 = $6,000

Example (married applicant*)

A married applicant has $10,000 in savings and no other assets. His or her modified assets would be $10,000 - $15,000 = $0.
*Or unmarried applicants with legally-related dependents under the age of 18, living with the applicant, and deriving 100% of their support from the applicant.

Spouses loan payment deductions

Subtracted from the combined modified income and assets of married applicants is the yearly required student loan payments of the applicant's spouse. Only loans for which the applicant is in repayment are considered and only for the amount that the applicant is required to make (i.e. the voluntary choice of a spouse to accelerate his or her payment will not increase the amount of spouse student loan deduction).

Determining Modified Income and Assets

The LRAP Committee adds an applicant's (and spouse's) modified income and modified assets together and subtracts any student loan payments required of an applicant's spouse. This resulting figure is compared against the following income guidelines to determine eligibility.

Example (married applicant* with spouse loan payments)

In the example below, the HKS graduate is married and the spouse has an annual loan payment of $6,800. They have liquid assets in the amount of $23,200 of which only $8,200 will be used to calculate eligibility. *Or unmarried applicants with legally-related dependents under the age of 18, living with the applicant, and deriving 100% of their support from the applicant.

$45,000	HKS graduate's income
33,600	Spouse's income (or registered domestic partner)
$78,600	Gross Household income
$8,200	Liquid Assets (after asset protection allowance)
$86,800	Total Income and assets
6,800	Minus spouse's (or registered domestic partner) annual loan debt
$80,000	Eligible LRAP Income

This Harvard Kennedy School graduate would receive 25% of their annual student loan payment in a Loan Repayment Assistance award. 

Example (single applicant)

In the following example, the HKS graduate is single and has liquid assets totaling $5,000. The annual loan payment for this participant is $10,000.

$35,000	HKS graduate's income:
0	Liquid Assets (after asset protection allowance)
$ 35,000	Gross household income and assets:

This HKS graduate would be eligible to receive 85% of her $10,000 annual student loan payment, which equals $8,500 in a Loan Repayment Assistance award.