Income Guidelines

Based on discussions with students, Dean Ellwood agreed to implement a new income eligibility system which "flattens" out the income/eligibility ratio.

LRAP applicants who began attending HKS prior to the October 2005 implementation will receive coverage under either the old system or new system - depending upon which treats the applicant more beneficially. All students who enrolled at HKS after 2005 will receive coverage under the new system.

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%

 

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%

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%

LRAP coverage is determined based on income and assets.

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.

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

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.

$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.

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