The Law School has announced a major overhaul of its Public Service Loan Forgiveness Program:
Law School graduates who choose careers in public service will soon be able to take advantage of a more generous loan forgiveness program, the Law School announced Wednesday.
Under the new Virginia Loan Forgiveness Program (VLFP II), graduates who take public service jobs that pay less than $75,000 per year will be eligible for loan assistance. The new program will cover the entire annual loan payments for graduates who make $55,000 or less.
This up from the previous level of $35,000 (the amount at which all loan payments are covered). Sound to good to be true? Well, if you're a 1L, 2L, a 3L, or an alum, some of it is:
The new program only applies to the class of 2013 onward; earlier classes will still be under the old program ("VLFP I"):
For the Classes of 2013 and later, the Law School’s revised loan forgiveness program (VLFP II) helps repay the loans of graduates who earn less than $75,000 annually in public service positions. Participants in the program who earn less than $55,000 annually receive benefits covering 100 percent of their qualifying law school loans. Those earning between $55,000 and $75,000 receive benefits prorated based on income. For the Classes of 2012 and earlier, the Law School maintains its original loan forgiveness program (VLFP I). [Emphasis in original]
Earlier we speculated on how the re-tooled Virginia Loan Forgiveness Program would dovetail with the new Federal Income Based Repayment rules. Speculate no more!:
The new program also requires that participants place their loans in the federal Income Based Repayment Plan (IBR), which factors in annual income, educational debt and family size to determine a graduate’s monthly loan repayment obligation.
“The IBR plan structures graduates’ loan payments around their income,” said Director of Financial Aid Jennifer Hulvey. “For graduates who are making less, their payments will be less.”
The new UVA program thus dovetails nicely with the federal one. Overall, we applaud the enhancement of the program, though we wish it applied retroactively, particularly to the 2Ls and 3Ls, many of whom were among the hardest hit by the recession / clawback in legal hiring.
Virginia Loan Forgiveness Program [UVA Law]