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Only loans borrowed for attendance at the Harvard Kennedy School (HKS) are eligible for consideration. These loans must be educational loans, certified by HKS, and not exceed your cost of education as established by HKS. The following is list of eligible loans:
Loans that do not qualify for LRAP include:
An otherwise ineligible loan does not become an eligible by virtue of school certification if the loan does not meet all other criteria established by the Student Financial Services Office to be considered a bona fide educational loan.
The amount of LRAP coverage will be based upon the LESSER of your required monthly payment on the repayment plan that you are repaying your loans OR the amount you would have paid had you elected to repay your loan on a a 10 year repayment plan immediately after graduation from HKS. As a reminder, only the portion of your required monthly payment associated with the loans borrowed to attend HKS will qualify. If your loan balance incldues other loans, any LRAP coverage will be pro-rated to reflect only the poriton associated with HKS borrowing.
I’m confused about how you determine my required monthly payment on my student loans
The LRAP program uses your required monthly payment on the loans you borrowed to attend HKS as the basis of its coverage. As a reminder:
Student borrows $50,000 and chooses a 20 year repayment plan with a required monthly payment of $387/month. When applying for LRAP, the monthly payment used for LRAP eligibility would be $387/month.
Student borrows $50,000, chooses a 20 year repayment plan with a required monthly payment of $387/month but chooses to pay $500/month. LRAP coverage would be based on $387/month.
Student borrows $50,000 and rather than choosing a standard repayment plan, asks the lender to establish a repayment plan of 5 years in length resulting in a required monthly payment of $990/month. Because this repayment period is less than the 10 year minimum, LRAP coverage would be based on the amount that would have been required if the borrower had chosen a 10 year plan: $580/month. If the borrower elected a longer repayment plan—such as the 20 year plan above—the basis for coverage would be the monthly payment required on the longer plan: $387/month.
Student owes a total of $50,000 but only $30,000 of this amount was borrowed at HKS with the remainder having been borrowed either as an undergraduate or at another graduate school. The borrower chooses a 10 year repayment plan that results in a required monthly payment of $580/month. For LRAP purposes, however, the amount of LRAP coverage is pro-rated to reflect the amount of the monthly payment associated with the HKS borrowing only: $30,000/$50,000 = 60% x $580/month = $348/month.
If a borrower begins repayment on a longer repayment term and then subsequently shortens the payment period, the maximum monthly payment eligible for LRAP coverage is the amount that the borrower would have paid had he or she begun repaying his or her loan on the new loan term at the beginning of repayment.
Student originally borrows $50,000 with a 7% interest rate and selects a 15 year repayment plan. This results in a required monthly payment of $450/month.
At the end of five years of repayment, the borrower now owes $38,482 and decides to change their repayment plan to a 10 year term. The lender determines that based on the 5 years remaining in the 10 year repayment period, the new required monthly payment will now be $761.
However, while the lender may choose to recalculate the monthly payment so that the total balances is repaid in 5 more years (five more years beyond the 5 years already past), for LRAP purposes, the monthly payment eligible for LRAP coverage is determined by calculating the required monthly payment on the original principal amount borrowed over 10 years. In this example, that payment would be $580/month. Therefore, even though the new required monthly payment by the lender is now $761/month, the amount eligible for LRAP is limited to $540/month.
Again: Even if the required monthly payment of the lender is higher, LRAP coverage will not exceed the amount that would have been required had the borrower initially elected the shorter repayment plan (minimum of 10 years).
Currently the program has a maximum cap of participation set at five years after graduation from an HKS program.
Applicants are eligible to be considered under the married student model if there are legally married or if they are in registered same-sex domestic partnerships. Applicants will be required to provide documentation of same sex domestic partnership registration.
Unmarried applicants with related legal dependents under the age of 18 who reside with the applicant and receive 100% of their financial support from the applicant will be considered under the guidelines of the married applicant income scale.
Eligible employment is full-time paid employment directly with a non-profit or governmental employer whose mission is consistent with the mission of the Harvard Kennedy School. To be eligible, the position must pay a salary to the applicant which, at a minimum, is sufficient to meet the full amount of the LRAP applicant’s living expenses. If a position does not provide at least this level of compensation, it is not considered to meet the standard for LRAP participation that requires that an applicant be employed on a full-time paid basis. We recommend that students investigate options for economic hardship deferment or forbearance if they find themselves in this situation.
Positions must be expected to last at least six months from the application deadline to be considered. Employment with for-profit companies are not eligible even work is performed exclusively for a non-profit or governmental entity. An example of this would be an individual employed by an employment agency assigned to a long-term position with an otherwise eligible employer. Such individuals would not be eligible to participate in the LRAP program.
Income is considered to be the student's annual compensation from their (and their 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.
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.
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 the student's assets, the LRAP Committee subtracts $10,000 for unmarried and $15,000 for married applicants.
LRAP participation normally requires full-time employment. The LRAP Committee will, on a case-by-case basis, consider applicants employed part-time if unusual circumstances exist and applicants meet all other eligibility requirements. If such unusual circumstances exist, the part-time employment must meet the following conditions:
If approval is granted, income eligibility is determined by computing the full-time equivalent annual salary and then pro-rating the resulting award amount by the percentage of full-time which the applicant is employed. Full-time is considered 40 hours per week.
A part-time applicant employed exclusively by a non-profit employer for 20 hours per week is approved for participation based on special circumstances. The applicant makes $23,000 per year.
20 hours represents 50% of full-time employment and therefore full-time equivalent salary would be considered to be $46,000. A $46,000 salary for a single individual would qualify for 25% coverage (if applicant has no assets).
If the applicant's student loan payments totaled $500/month, 25% coverage for six months would normally be $500 x 6 months x 25%=$750.
However, since the applicant is employed 50% of full-time employment, the amount of the actual LRAP payment would be $750 x 50% = $375.
The LRAP Committee reserves the right to consider unusual medical expenses incurred during the period of coverage. Only the amount of unreimbursed expenses that exceeds 7.65% of the applicant's (and spouse's) annual income will be subtracted.
The Committee recognizes that it may be difficult to document what expenses are likely to be incurred in a future period. In most cases, expenses that will be allowed as an offset against income will be those of a reoccurring nature that allows for prediction. Types of expenses might include dialysis, chronic conditions, high prescription drug expenses, etc.
An applicant has a chronic medical condition which results in $500 per month of unreimbursed documented medical expenses and has an annual salary of $42,000 per year. 7.65% of $40,000 is $3,060. Therefore, the amount by which the applicant's annual salary will be modified is ($500 x 12)-$3,060 = $2,940. This will result in a modified salary of $40,000 - $2,940 = $37,060.
In this case, the amount of medical expenses changed the applicant's eligibility category for LRAP coverage from 50% to 75%.
The HKS LRAP program typically only covers loans not otherwise receiving coverage by another loan forgiveness or repayment program. If you are receiving such coverage, you must provide information documenting the nature of the coverage and which loans are receiving coverage. When determining eligibility, the LRAP Committee will add the amount of annual coverage you are receiving from another source to your gross income. This modified income will be used for determining the amount of LRAP coverage for which you qualify. If you are receiving loan repayment assistance from another source for a loan for which you are not applying for LRAP coverage, the amount of such coverage is excluded for LRAP eligibility purposes.