LRAP?!?

Question

Anybody applying to schools with LRAPs (Loan Repayment Assistance Programs) for grads who go into the public or social sector? My business brings me into contact with a lot of nonprofits, and I'd like to sit on the board of some nonprofits before long, so the LRAP really attracts me to some schools.

The top schools with LRAPs that I'm aware of are:

Harvard
Stanford
Berkeley - Haas
Michigan
Yale

Am I missing any schools? Any other comments about LRAPs? Anybody actually taken advantage of such a program?

Jerz · Answer

I think most of the top schools have some sort of loan assistance for people who go into public sector roles. To be clear though, most of these schemes require that you work full-time for the public agency or non-profit. Sitting on a non-profit board is not enough.

skahuh · Answer

Right. They also have income qualifications, i.e., earn too much, no LRAP.

But I don't think all of the top schools have them. Tuck? Kellogg? Wharton? Not to my knowledge.

anonanon · Answer

Most of the schools do have them. I believe in the top 10, there are 2 schools or so that don't have anything like that, including NYU and MIT. However, I believe NYU just started offering a LRAP program through the class of 2010 gift.

I'm a recent Ross graduate focused in non-profit and wanted to put a warning out on those seeking to go to Ross with the expectations that the LRAP will be there for them. 
You need to consider whether the program is actually funded by the school. Ross purports itself as a socially responsible school with many programs to support students focused on non-profit / public sector careers. However, as I applied for the LRAP last year (2009), I was denied, even though I met program requirements. I later discovered that current students had been working with administration to figure out how to fully fund the LRAP program. The result of these discussions was that Ross administration lowered repayment payouts to applicants and still did not guarantee a certain level of funding for the program (most importantly). At many other schools, including Stanford, Haas, and Yale, their LRAP programs are currently fully funded and there is no concern for current and prospective students with regards to entering non-profit career with salary levels a good 30-50% lower than the private sector. Though Michigan does offer significant dual degree options (especially with Erb, Public Policy, Education Master's) and good resources (Net Impact club winning multiple Chapter of the Year awards), I would warn any prospective MBA to think twice about Michigan with the current policies in place. It's inconceivable for a school to expect a student to take on this type of debt to enter a career which will barely cover loan payments. The school prioritizes many other special interest programs over assisting non-profit students.

My word of advice to you, do your homework by speaking to current non-profit focused alumni and their experience with their school's LRAP program.
If paying back upwards of 60k-100k of loans is of paramount importance to you, consider better funded options.

skahuh · Answer

Suggestion noted, and sorry to hear about your horrible experience. I'll be sure to get in touch with some Ross alumni to find out about their experiences.

Can I ask how you found out that Stanford, Haas, and Yale's programs are fully funded?

anonanon · Answer

Talked to current students and alumni friends of these schools with regards to their loan repayment options and experience.

method · Answer

1) IBR Repayment Plan - google for calculator
2) Public Service Loan Forgiveness

The combination of these two programs ensures that any student who wishes to rack up student debt to go into public service can survive, with or without school-funded LRAP. An IBR repayment schedule can include PLUS loans, and is qualified under the PSLF as an acceptable repayment plan.

Playing around with the calculator...
Married w/1 Child
$160,000 debt + $85,000 salary ->  $540/month  -> $64,800 loan payments over 10 years before wiped by PSLF
$160,000 debt + $50,000 salary ->  $250/month  -> $30,000 loan payments over 10 years before wiped by PSLF

Single w/0 Children
$160,000 debt + $85,000 salary ->  $840/month  -> $100,800 loan payments over 10 years before wiped by PSLF
$160,000 debt + $50,000 salary ->  $420/month  -> $50,400 loan payments over 10 years before wiped by PSLF

An LRAP program like Northwestern's which expects you to make a contribution based on your adjusted income will probably halve these payments. Some LRAP programs like Duke's do not include coverage for PLUS loans, which if you have debt this size is a certainty. Some LRAP programs do not provide coverage for 10 years, Columbia GSB's only goes 5. I don't have the data in front of me, but I believe Wharton's only goes 3.

If applicants bank hard on LRAP, they are probably left with the predicament of needing to get into an ultra-elite with LRAP or a much lower ranked school that will give them substantial funding. These two programs make more schools viable in the application equation, specifically Booth, Sloan, and the 11-20 pack.

xor0616 · Answer

Applying Round 1. any thoughts on how to approach the 4th blank pages prompt?

LRAP?!?

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