Navigating NYU Law Student Loan Options and Repayment

For students pursuing a law degree at NYU, understanding student loan options and repayment plans is crucial for managing finances both during and after their studies. NYU Law offers resources and programs to assist students in navigating the complexities of student loans, particularly through its Loan Repayment Assistance Program (LRAP). This article provides a comprehensive overview of available options, with a special focus on NYU Law's LRAP and federal repayment plans.

NYU Law's Loan Repayment Assistance Program (LRAP)

NYU Law distinguishes itself with one of the most generous LRAPs in the nation, designed to support graduates committed to public service. The LRAP aims to alleviate the burden of student loan debt for alumni pursuing careers in public interest.

LRAP Plus: Financial Support and Flexibility

The LRAP Application for 2025 is now available. If you have questions about your application, please use the updated contact information. NYU Law’s LRAP Plus offers increased flexibility. Qualified participants may opt into the Income-Driven plan or Traditional plan. Most participants can now earn up to $110,000 a year and have no monthly payment on their law school loans. Non-law educational debt up to $30,000 in original principal is included in LRAP Plus (on top of a $10,000 allowance for Bar Study Loans). LRAP Plus also includes a dependent allowance of $10,000 per eligible dependent.

Commitment to Public Service

NYU Law’s far-reaching program comprises both an income-driven plan which leverages the power of the federal government's Public Service Loan Forgiveness Program (PSLFP) and a traditional 10-year plan similar to other law schools. Between them, they cover a wide range of employment including full-time jobs in federal, state, city and local government, nonprofit organizations, judicial clerkships, legal academia, some self-employment and for-profit organizations serving the public interest. If you stay with our income-driven plan for 10 years until completion, your loans can be fully forgiven with the lowest overall out-of-pocket expenses possible. And, you may pay nothing toward your loans each month even as you advance in your career.

Flexibility and Options within LRAP Plus

Participants in LRAP Plus will have increased flexibility-qualified participants may opt into the Income-Driven plan or Traditional. If you choose to explore other career opportunities after three years in the Income-Driven plan, we offer one-time payment assistance to help you stay on track with your loan payments. It’s possible to defer for up to two years to start a family, pursue further education or deal with unforeseen hardship. It's never too late to join LRAP Plus. Qualified participants can apply at any time.

Long-Term Commitment

NYU Law is committed to covering all LRAP participants now and in the future.

Federal Student Loan Repayment Plans

The Federal Direct Loan Program offers various repayment plans. Although you may select or be assigned a repayment plan when you first begin repaying your student loan(s), you can change repayment plans at any time. For assistance selecting a repayment option, visit studentaid.gov. Contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan. Please note that repayment options for private loans will vary according to the lender.

Standard Repayment Plan

A Standard Repayment Plan with a fixed annual repayment amount paid over a fixed period of time not to exceed 10 years.

Graduated Repayment Plan

Paid over a fixed period of time not to exceed 10 years. With this plan, your payments start with a relatively low amount and then increase, generally every two years.

Extended Repayment Plan

With a fixed annual or graduated repayment amount to be paid over a period not to exceed 25 years. If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans to be eligible for this plan. If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans This means, for example, that if you have $35,000 in outstanding FFEL Program loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFEL Program loans but not for your Direct Loans. Your monthly payment will be lower than it would be under the Standard Plan, but you’ll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.

Read also: Examining ECMC Student Loans

Income-Driven Repayment Plans

Income-Driven Repayment Plans offer repayment options that are based on your income and family size.

Saving on a Valuable Education (SAVE) Plan

The SAVE plan, by law, will go into effect on July 1, 2024. This plan enables more Direct Loan borrowers to cap their monthly student loan payment amount at 10% of monthly discretionary income. Payments are recalculated each year and are based on your updated income and family size. If you're married, both you and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions). Your monthly payment can be more than the 10-year Standard Plan amount. Any borrower with eligible federal student loans can make payments under this plan. The SAVE Plan improves upon the current Pay As You Earn Plan while extending its protections to all student borrowers with Direct Loans. The SAVE Plan also will provide a new interest subsidy benefit to prevent ballooning loan balances for those whose income-driven payments cannot keep up with accruing interest. In addition to the monthly payment cap, SAVE will forgive the remaining debt after 20 years for those who borrowed only for undergraduate study and 25 years for those who borrowed for graduate study. You may have to pay income tax on any amount that is forgiven.

Income-Based Repayment (IBR) Plan

To qualify for the IBR Plan, you must have a partial financial hardship. Under this plan, during any period when you have a partial financial hardship, your required monthly payment amount will not exceed 15 percent of the difference between your adjusted gross income and 150 percent of the Federal Poverty Guideline amount for your family size and state. To qualify for this plan, your monthly payment must be less than what you would pay under the Standard Repayment Plan with a 10-year repayment period. If you repay under this plan and meet certain other requirements over a 25-year period, any remaining balance on your loans may be canceled. Contact the Direct Loan Servicing Center (for Direct Loans) or your FFEL lender (for FFEL Program loans) for more information about the IBR Plan.

Pay As You Earn (PAYE) Repayment Plan

Monthly payments are 10% of discretionary income, the difference between your adjusted gross income and 150% of the poverty guideline for your family size and state (other conditions may apply). You must also prove partial financial hardship. Additionally, you must be a new borrower on or after October 1, 2007, you must have received a Direct Loan disbursement on or after October 1, 2011 and you must have applied for the PAYE Plan before July 1, 2024. If you are currently enrolled in this plan, you must stay continuously enrolled in order to remain on the PAYE Plan, as no new enrollments are accepted.

Income Contingent Repayment (ICR) Plan

To qualify for the ICR plan, your Adjusted Gross Income (AGI), family size, and total federal student loan debt is assessed. Monthly payments are set at the lesser of (1) what you would pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on your income or (2) 20% of your discretionary income, divided by 12. Your income and family size must be updated every year, even if it hasn't changed, as this allows your loan servicer to recalculate your monthly payment amounts. If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return or you choose to repay your Direct Loans jointly with your spouse.

Important Note: Litigation may affect the implementation of the SAVE Plan and other income-driven repayment (IDR) plans. Further developments are possible while the SAVE Plan remains under litigation.

Federal Loan Options

After completing the FAFSA, you may be eligible for federal loans through the direct lending program. citizens and permanent residents regardless of financial need. Department of Education. Students enrolled at least half-time can borrow up to $40,500 annually with Direct Unsubsidized Loans but cannot borrow more than $224,000 in total. The current interest rate is 7.05 percent, with a standard 10-year repayment term. Students enrolled at least half-time can borrow up to the cost of attendance, excluding any other financial aid received, with Direct PLUS Loans. The current interest rate is 8.05 percent with a standard 10-year repayment term. Direct Graduate PLUS Loans are “credit ready,” which means you undergo a credit analysis to be approved for this loan.

Loan Interest and Repayment

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you are required to begin repayment. Interest on federal loans accrues while you’re in school and during grace and deferment periods. There is no way to defer federal loans during your residency training. However, you may opt into an income-adjusted payment plan to lower your initial loan payments or request forbearance.

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