Program Overview: :
The Harvard Medical School Financial Aid
Office is pleased to continue a pilot debt-relief scholarship program targeted
to alumni who have just completed their post-graduate medical training (residency/fellowship).
This program, called the HMS Loan Repayment Assistance Program (LRAP), has been
established as part of the graduate/professional financial aid initiative announced
by former Harvard University President Lawrence Summers. LRAP is designed to provide
debt-relief scholarships to young alumni with modest incomes and high debt-to-income
ratios. By helping to address the financial challenges that can dissuade HMS alumni
from accepting employment in public service positions, we hope to expand the range
of job options that our graduates can consider in the critical early years of their
careers.
The LRAP pilot is funded from July 1, 2003 through June 30, 2013. The program is
currently being offered to HMS graduates from the classes of 1997 and later who
have completed their residency/fellowship training, and members of this cohort will
be eligible for up to five years of LRAP assistance. In the event that applicant
demand exceeds available funds, first priority will be given to those working in
public service areas such as primary care of the medically underserved, health policy,
and clinical research. The HMS Financial Aid Office will use the data gathered during
this pilot to study the feasibility of eventually offering guaranteed debt-relief
scholarships to all HMS graduates meeting the LRAP eligibility criteria.
Eligible Jobs::
The LRAP program is available for HMS graduates whose gross income is below the
typical starting salary for a general practitioner as published by the
National Association of Physician Recruiters (currently $117,000). First
priority for funding will be given to those working in public service careers. While
we have initially identified primary care of the medically underserved, health policy,
and clinical research as areas of urgent national need, we welcome applications
from other types of positions as well. As part of the application process, alumni
are asked to submit personal statements explaining how public service fits into
their current positions and overall career plans.
Graduates who start their own practices should consult with the
Director of Financial Aid about their situations. In general, LRAP assistance
is not available during a business start-up period and the graduate is advised to
pursue loan forbearance from each lender. Once a business tax return and/or Schedule
C are filed, the Financial Aid Committee will be able to evaluate an applicant's
financial situation and determine LRAP eligibility. Further documentation beyond
the standard application may be required (bank statements, additional verification
of employment, etc). LRAP awards for self-employed participants are generally based
on estimates of future income. Estimated LRAP awards are always verified and adjusted
retroactively if necessary, once actual earnings can be documented from tax returns.
While LRAP is normally limited to those graduates employed on a full-time basis,
the program will provide assistance for up to six months for a parental leave. LRAP
will also cover part-time work after the birth or adoption of a child.
We strongly encourage students and graduates who are unsure as to whether their
planned employment will meet the program criteria to consult with the
Director of Financial Aid. Graduates are strongly cautioned not to rely
on LRAP support without having received an award notice from the Financial Aid Committee.
Eligible Borrowing:
LRAP is solely and specifically intended to be used to repay eligible education
loans. Eligible borrowing includes all education loan program borrowing. When applying
or reapplying for LRAP, participants must document that their loans are in good
standing, with no past-due payments. LRAP assistance will not be offered for past-due
loans.
LRAP assistance is not available for loans from family and friends, for credit
card and consumer debt, or for personal loans from banks or other sources. There
is no retroactive assistance and no assistance for periods of loan forbearance or
deferment. In order to be remain eligible for LRAP, graduates
must provide proof of good standing from the servicers
of all applicable loans and may not have an outstanding term bill balance with
Harvard
University
.
Income and Asset Guidelines:
Participants allocate, according to the Expected Contribution chart included in
this document, a limited percentage of their earnings toward their total annual
education loan repayment. LRAP will provide grant assistance to cover any difference
between the graduate's total eligible debt payments due in that year and the expected
contribution toward eligible loan payments.
Graduates with spouses or domestic partners will be evaluated on the basis of either
(1) their own income (if their spouse/partner makes less than they do), or (2) half
of the joint income (if the spouse/partner makes more than the LRAP participant).
Any annual education loan payments for the spouse/partner will be subtracted from
his/her income before determining the joint income. A dependency allowance of $6,000
for the first child and $3,600 for each additional child, plus reasonable expenses
incurred for child care, are taken into consideration before determining the expected
contribution rate; allowances are applied proportionately to the salaries of each
parent.
Assets are taken into consideration in determining the amount of a LRAP award. Graduates
will receive an asset protection allowance of $5,000 at graduation, with an additional
$5,000 for each subsequent year employed, and $5,000 for each full year employed
between college and medical school. For applicants with spouses or domestic partners,
the protected asset amount is doubled. The total allowance is then subtracted from
the total amount of assets, resulting in an amount of unprotected assets. A declining
percentage (from 70% for 3 years out to 0% for 10+ years out) is applied to the
unprotected amount. This result is then divided by the outstanding loan debt amount,
resulting in a percentage. The LRAP award is reduced by that percentage.
Salary Guidelines:
|
Gross Income |
|
Expected Contribution Towards Loan Payments* |
|
$39,000 or less |
|
none |
|
$39,001-$44,500 |
|
18% over $39,000 |
|
$44,501-$50,000 |
|
$1,000 + 36% over $44,500 |
|
$50,001 or more |
|
$3,000 + 36% over $50,000 |
*before adjusting for contribution from assets, if any.
LRAP will provide assistance for up to six months for a parental leave. LRAP eligibility
will be calculated as if the graduate were working full-time during this period.
LRAP also covers part-time work after having children. This policy applies only
for parents of children not yet of age to enter first grade and part-time work must
be at least half time. For purposes of eligibility and contribution rates, the full-time
salary equivalent is considered.
If two HMS graduates are married/partnered to each other and would both qualify
for LRAP based on their individual incomes, then both can participate independently
in the program. Total joint assets will be divided equally between the two participants
in the LRAP evaluation.
Special Note Concerning Domestic Partners: Participants listing domestic partners
on their applications will be required to complete a
Statement of Domestic Partnership.
Tax Considerations:
LRAP assistance is reported to the IRS as "other income" for the tax year in which
it was received, and a Form 1099-MISC is issued. For this reason, the LRAP award
includes an additional 25% allowance toward the tax liability.
Application Process:
Because this program is still in a pilot phase, we are currently able to accept
applications only from those alumni from the classes of 1997 and later who complete
their post-graduate training (residency/fellowship). Participants from this cohort
may receive LRAP support for a maximum of five years. The pilot is currently scheduled
to end on June 30, 2013.
Applicants are expected to first apply for any
government or employer sponsored loan repayment programs for which they
are eligible. Alumni already receiving assistance through such programs will ordinarily
not be considered for LRAP assistance.
First-time applicants can enter the program at any time by submitting the
LRAP application along with the supporting documentation described below;
continuing students may complete a
Renewal LRAP Application. The
application deadlines for LRAP assistance are July 15 for the July - December award
cycle and January 15 for the January - June award cycle. Prorated assistance is
available for those who begin qualifying jobs partway through a six-month award
period.
Each June, all participants must submit an application for the upcoming academic
year (July ? June). Applicants must also submit an
Employer Certification Form and
documentation of good standing from their lenders. In November, continuing
participants must complete an Update Form to confirm their continued eligibility.
Participants are required to report changes in income, job, monthly loan payment
amounts, employment status, family size or other financial circumstances promptly;
the level of LRAP assistance will be adjusted accordingly.
For more information:
For more information, please contact the HMS Director of Financial Aid:
Robert Coughlin
Director of Financial Aid
Harvard Medical School Financial Aid Office
25 Shattuck
Street
Boston, MA
02115-6092
(617) 432-1575
financial_aid@hms.harvard.edu
