Program Overview: :
The Harvard Medical School
Financial Aid Office is pleased to continue a pilot debt-relief
loan repayment 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 payments 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 who have completed their
residency/fellowship training. 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.
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:
All HMS alumni who meet the eligibility criteria anad have completed their post-graduate
training (residency/fellowship) are encouraged to apply.
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)
432-0449
financial_aid@hms.harvard.edu
