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Loan Repayment Assistance Programs (LRAPs) are a powerful tool to help you manage repayment of your educational debt. These programs help you to make payments on your educational loans and are available from a variety of sources, including schools, employers, states, and the federal government.
How do Loan Repayment Assistance Programs work?
LRAPs differ from repayment plans like the REPAYE, IBR, PAYE, and ICR plans. They are also different from loan forgiveness programs like PSLF. Rather than lowering your payment amount or providing forgiveness of your educational loans in the future, LRAPs provide funds now to help make payments on your loans.
LRAP funds can help to pay down a private educational loan, which are never eligible for federal relief programs. It also may be possible to use LRAPs in conjunction with some federal relief programs.
For example, if you are working in qualifying employment for Public Service Loan Forgiveness and enrolled in an income-based repayment (IBR) plan to receive lower income-based payments on your Federal Direct Loans. If you qualify for an LRAP, these funds may cover your income-based monthly payments in their entirety until you make 120 of them and the government grants you forgiveness!
LRAPs also are an important tool to help borrowers who may not benefit from income-driven repayment (IDR) plans or Public Service Loan Forgiveness (PSLF). For example, more experienced public service workers who graduated before 2007 often fit into this category because they may have high private loan debt or have already spent years in repayment. LRAPs can provide an important form of relief for these borrowers.
Who provides LRAP assistance?
LRAPs may be available from schools, employers, states, and the federal government. You’ll need to do some research, but you may have an LRAP available to you.
Many public sector employers now offer Loan Repayment Assistance Programs to their employees. Check with any current or future employers to ensure that you are taking full advantage of any LRAP programs that are available to you.
School-based Loan Repayment Assistance Programs provide financial aid to graduates who have educational debt and take low-paying jobs. Most programs are designed with the goal of enabling graduates to enter public interest and government work. A graduate of a school with a Loan Repayment Assistance Program can apply for and receive funds from the program to help with repayment of educational loans.
The following law schools have LRAPS (as of November 2021):
Some states also offer LRAPs that can ease the burden of educational debt. State-based LRAPs may be created and administered by state education administrations, independent nonprofit organizations, and professional associations or foundations. Some municipalities also have begun to offer LRAPs to graduates as an incentive to relocate to and work in a specific area.
The following states have LRAPS (as of March 2023):
- District of Columbia
- New Hampshire
- New Mexico
- New York
- North Carolina
Federal Government LRAPs
Federal law allows any federal agency to start an LRAP for employees of that agency. Federal agencies are authorized by statute to set up Loan Repayment Assistance Programs to recruit and retain highly qualified employees. The U.S. Office of Personnel Management (OPM) has created a Student Loan Repayment Program Fact Sheet.
Participating agencies determine their own program requirements within the requirements of 5 U.S.C. 5379 which states:
- Agencies are authorized to provide up to $10,000 per calendar year with a lifetime limit of $60,000.
- Recipients of loan repayment assistance must agree to a three-year service obligation.
- Only federal student loans are eligible for assistance.
Eligible loans include:
- Federal Direct and FFEL Stafford Loans (Subsidized and Unsubsidized)
- Federal Direct and FFEL PLUS Loans
- Federal Direct and FFEL Consolidation Loans
- Federal Perkins Loans: National Defense Student Loans, National Direct Student Loans, Perkins Loans
- Public Health Service Act Loans: Loans for Disadvantaged Students (LDS), Primary Care Loans (PCL), Nursing Student Loans (NSL), Health Professions Student Loans (HPSL), Health Education Assistance Loans (HEAL)
The U.S. Office of Personnel Management (OPM) submits annual reports to Congress on federal agencies’ Loan Repayment Assistance Programs including:
- The number of employees who received student loan repayment benefits;
- The job classifications of the employees who received student loan repayment benefits; and
- The cost to the federal government of providing student loan repayment benefits.
As of the 2018 OPM report, the following federal agencies/departments have LRAPS:
- Department of Commerce
- Department of Defense
- Department of Agriculture
- Department of Education
- Department of Energy
- Department of Health and Human Services
- Department of Homeland Security
- Department of Housing and Urban Development
- Department of the Interior
- Department of Justice
- Department of Labor
- Department of State
- Department of Transportation
- Department of Treasury
- Department of Veteran Affairs
- Agency for International Development
- Chemical Safety and Hazard Investigation Board
- Commodity Futures Trading Commission
- Defense Advanced Research Projects Agency
- Defense Nuclear Facilities Safety Board
- Export-Import Bank
- Environmental Protection Agency
- Farm Credit Administration
- Federal Energy Regulatory Commission
- Federal Retirement Thrift Investment Board
- Federal Trade Commission
- General Services Administration
- Government Accountability Office
- Institute of Museum and Library Studies
- Library of Congress
- National Archives and Records Administration
- Nuclear Regulatory Commission
- Office of Personnel Management
- Office of Special Counsel
- Pension Benefit Guaranty Corporation
- Postal Regulatory Commission
- Securities and Exchange Commission