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Loan Repayment Assistance Program

Loan Forgiveness Policy

Program Policy | Loan Forgiveness Policy | Definitions

The loan forgiveness policy defines how long a graduate must work in the public interest field for their LRAP loans to be “completely forgiven” (i.e., they are not required to pay back the money that the University of Oregon loans them to pay off their law loans). The policy also assesses the proportion of LRAP loans a participant must repay if he or she leaves the program before achieving complete loan forgiveness.

The first policy embodied in the forgiveness calculation is complete forgiveness of all University of Oregon LRAP loans for LRAP participants after three years of public interest law service. This three-year time period is shorter than many existing LRAPs (many stipulate service periods for 5 years or longer) to achieve complete forgiveness. Some schools, on the other hand, forgive their loans immediately, doling out grants instead of loans. Our three-year period represents a compromise between two differing philosophies: three years is a significant period of time to provide an incentive for graduates to enter and stay in public interest law, while also allowing them the option to pursue alternative career opportunities in the future (without having to pay back their LRAP benefits), should such circumstances arise. Under the three year forgiveness schedule, 1/3rd of a recipient’s LRAP loans are forgiven after each year of public interest law service.

One major issue addressed in the loan forgiveness calculation is the issue of judicial clerkships. Judicial clerkships are public interest law positions as they involve government service. However, they are unique public interest positions for two reasons. First, the positions are for a fixed term (one to two years) with no opportunity for reemployment. Second, many graduates who accept judicial clerkships go on to accept law positions that pay a higher salary relative to those in public interest law fields.

In order to ensure that graduates entering judicial clerkships and continuing their legal careers in public interest law are able to benefit from the LRAP, special forgiveness schedules have been established. Graduates receiving LRAP benefits during their clerkship must work a total of two years in public interest law AFTER their clerkship ends in order to receive complete loan forgiveness. They achieve 50% loan forgiveness after one year of public service work post clerkship.

This schedule effectively targets the most financially deserving candidates by distinguishing between clerks who continue their legal careers in public service and clerks who leave the public sector to pursue jobs in private practice. If a graduate receives LRAP support while clerking (for either 1 or 2 years), and then immediately enters the private sector, they will be responsible for paying the University of Oregon law school back all of the LRAP funds that were loaned to them while they were clerking.

Maximum Benefits under the LRAP

There are two policies behind the benefit caps in the LRAP. The first is to ensure that the LRAP program serves as many individuals as possible while still providing LRAP participants with a substantial loan repayment during public interest law service. The second policy is to allow administrators to calculate the maximum total LRAP loan for any participant in the program. This will allow administrators to budget the program into the future, and to determine the number of new LRAP applicants who may be accepted in any given year.

To achieve these goals, the program places two caps on the maximum level of benefits an individual may receive under the program. The first cap is the maximum annual amount that a graduate may receive under the LRAP. This annual cap is $5,000 per year. The second cap is the maximum total amount of time any graduate may receive aid from the LRAP and is set at three years. This three-year cap will allow graduates to receive up to $15,000 from the LRAP.

Definitions

The following definitions have been created for the LRAP:

Public Interest Law

The policy behind this definition is to ensure that graduates are entering post-graduate law employment that confers some direct benefit to the public and requires the graduate, as a result of their employment decision, to forego more lucrative employment in private practice. Each of the following comprise “public interest law” for the purposes of the LRAP:

1. Employment in an organization providing legal services that qualifies for tax exempt status under Internal Revenue Code section 501(c)(3), (4), or (5); for example (but not limited to), legal aid or legal services organizations, public defender offices, private non-profit organizations conducting public policy research, private non-profit organizations rendering legal services to or on behalf of persons or organizations which could not otherwise obtain like services, and human rights organizations, or

2. Employment in a federal, state, tribal, or local government unit; work which focuses on providing legal aid, legal services, or criminal justice services to or on behalf of persons or organizations which could not otherwise obtain like services will be looked at more favorably by the committee, or

3. Employment as a judicial law clerk. In order for a judicial clerk to receive forgiveness of LRAP loans received during their clerkship, they must enter post-judicial clerk employment in either category 1 or 2 above. This policy was created to recognize that many judicial clerks enter relatively high paying legal positions following clerkship service. The LRAP structure has been developed to ensure that while judicial clerks may receive LRAP benefits during their clerkship, they will only have their loans forgiven if they follow their clerkship with service in public interest law.

Note that some of the funds donated to the University of Oregon’s LRAP have use restrictions (e.g., some may not be loaned to Judicial Clerks). Each year the Associate Dean for Finance & Operations will be responsible for providing the Selection Committee with an outline of funds available for distribution and any relevant restrictions based upon donor Endowment Agreements.

Partner

The policy behind this definition is that the LRAP should not discriminate based on sexual orientation. Since part of the eligibility criteria for the LRAP involves the income and debt burden of a graduate’s partner, it is necessary to develop a definition that will apply to both long-term heterosexual and same-sex relationships in order to prevent inequity to individuals of either sexual orientation. The Oregon Supreme Court ruled in Tanner v. Oregon Health Sciences University that the Oregon State Constitution requires the public sector to provide domestic partner benefits to employees with same-sex partners. In addition, the Oregon Income Tax Code treats health benefits provided to an unmarried partner the same as benefits conferred by an employer to an employee’s spouse. Given this information, and the need to create a definition that distinguishes between short-term and long-term domestic partner relationships where the partners share financial responsibility within the relationship, the following definition of partner has been developed, such that a “partner” is, for LRAP purposes, either:

1. A spouse to whom the applicant is legally married, or
2. An unmarried partner of the applicant who provides, or is eligible to provide, health benefits to, or receives, or is eligible to receive, health benefits from, the applicant.

Assets

The policy behind the definition of assets is to provide the LRAP Selection Committee with the most accurate picture possible of the applicants’ financial position. The definition of “assets” includes:

1. All stocks, bonds, mutual funds or any other instruments, aside from individual retirement accounts and college investment plans;
2. Any beneficial interest in a trust;
3. Any interest in an annuity or life insurance policy, but being named as a beneficiary in a life insurance policy shall not be considered an asset;
4. Capital assets, including any real property; (note that Selection Committee will evaluate real property based on its net value (market value minus mortgage liability)); net value of automobiles owned (market value minus remaining loan balance)