We inform you of a lot of information that you have signed off on letting us know you understand about LRAP. However, we've assembled a few items that everyone needs to be aware of and hopefully this will be a little easier to read (instead of everything we put online, or in your award letter (which should answer many of your questions, so please keep a copy of it). Check back often for more LRAP Facts!
1.Incomplete LRAP Applications:
We have way too many incomplete renewal applications. Please review the required documents for your LRAP program (LRAP 3 in IDR) that we have listed in the instructions before you submit your application. Once you submit any incomplete documents, we have another 5 business days to e-mail you, so please be prepared to make any payments that are due if your LRAP disbursement is not processed in time. WE MUST HAVE PROOF OF ALL PAYMENTS WE HAVE COVERED FROM YOUR PRIOR AWARD (i.e. if your new payment begins in November, then please make sure you’ve made your October payment so it is included in your loan history). IF YOU MISSED A PAYMENT OR A MONTH WASN’T SCHEDULED FOR SOME REASON, PLEASE INFORM US WITHIN THE ONLINE LOAN SECTION.
2.IDR Application Documents:
We encourage you to link your most recent tax return to your IDR application as long as your AGI is lower than your current salary. It is a much easier process, it will always be a year behind and you know exactly the figure your loan provider is using to calculate your IDR, so the repayment estimator will match your payment. If you submit a paystub your loan provider should reduce your gross income by medical, and retirement, but this doesn’t always happen correctly and you most likely will have to contact them to ask what they used. Due to new regulations they may not provide this information over the phone.
3.Nelnet Acquiring Great Lakes Student Loans:
If your loan provider is Great Lakes please be aware that Nelnet is scheduled to take over their student loan portfolio as of January 1, 2018. We encourage all Great Lakes customers to complete the Federal Employer Certification Form so that your loans can be transferred over to FedLoan Servicing (Public Service Loan Provider) in order for you to not have multiple loan transfers.
4.IDR Renewal vs LRAP Renewal:
Please keep track of the date you are required to submit your IDR application and supporting documents to your servicer. They should be notifying you around 90 days prior to your payments changing each year. Once you receive your new loan amount for the next 12 months AND you’ve made all of your loan payments from your prior LRAP award, then you should reapply for LRAP.
5.Uploading Documents to the Online LRAP Application: Here are a list of issues we’ve encountered with uploaded documents:
•Please make sure you are uploading the correct document to each category listed in the required document section. Please don’t upload all of your documents several times.
•Do not include any special characters when you save your documents as PDFs or they will not upload.
•Please submit only pages 1 & 2 of your federal tax return (we do not need any schedules or your state taxes). Your SSN should be blocked out and they should NOT be password protected in order for us to access them.
•If you have more than one W-2 Form, more than one Loan Statement for multiple loans (Federal and/or Bar), more than one Loan History for multiple loans, etc., please save all of them as 1 PDF for that specific category, and upload them in that required document field.
6.How is LRAP Calculated if you are over the Income Threshold:
Single Applicants (Family size of 1): We calculate the difference based on a sliding scale dollar for dollar over the $75,000 threshold. If your IDR is based on a reported income of $80K ($5000 over), then we will calculate assistance based on an income of $70K ($5000 under). If it’s based on $85K ($10000 over), then we will calculate assistance based on $65K ($10000 under), and so on. Any amount reported to your servicer over the $75,000 threshold will require some out of pocket monthly payment from you.
Married Applicants or Applicants with Dependents: We calculate the difference based on a sliding scale dollar for dollar over your threshold of $75,000 + 150% of the HHS Poverty amount for each additional person (current amount for 2017 = $6,270). Therefore, if you have a total household size of 2, then your threshold is $81,270. (The $75K threshold is for a single person). If your IDR is based on a reported income of $85,000 ($3,730 over), then we will calculate assistance based on an income of $77,540 ($3,730 under). If it’s based on $100,000 ($18,730 over), then we will calculate assistance based on $62,540 ($18,730 under), and so on. Any amount reported to your servicer over the threshold for your family size will require some out of pocket monthly payment from you.
It all depends on what you report to your servicer. Even if your salary is over your threshold, but you provide your AGI from your most recent tax return (which is most likely lower due to not counting in retirement), and it’s under the threshold then we will still provide 100% LRAP coverage.
7.Choosing a Repayment Plan on the IDR Application:
We mention on your award letter what repayment plan you are eligible to receive LRAP benefits under. Please note that if you are currently in IBR and receiving LRAP benefits under IBR, then you should continue to select IBR on the IDR application. DO NOT SELECT THE BOX THAT WILL GIVE YOU THE LOWEST PAYMENT. If you are only eligible for IBR and select this box, then your servicer will most likely switch your repayment plan to REPAYE. This automatically places you in a standard repayment (you do not have to make a full payment), but you will be required to make a $5 payment and your loans will be placed in a forbearance. Also, any interest that has accrued will be capitalized.
8.LRAP Certification Form
This is a form you complete each time you renew your application. Within this form we ask you what Income Driven Repayment (IDR) you are under (IBR, PAYE, or REPAYE), if your servicer used your tax return or paystub to calculate your IDR, and when your payments will change.
Question on the Form: I (we) certify that federal loans are in PAYE ____ IBR____ REPAYE____ (please check a box), my servicer used my (our) tax return____ or paystub(s)____ (please check a box), and the annual date that my monthly payment will change each year is: _________________.
PLEASE MAKE SURE YOU ANSWER ALL 3 QUESTIONS. If your servicer used your tax returns, then check this box and submit your Federal Tax Return (pages 1&2 ONLY and BLOCK OUT YOUR SSN). If your servicer used your pay stub, then check this box and submit the same pay stub to us with your pay frequency. DO NOT send both documents to your servicer. You should know what they are using so you can figure out if your payments were calculated correctly. The quickest and easiest document would be for you to submit your tax return each year since your AGI doesn’t include any retirement income.
If your new payment begins on July 1, 2017, then you would report that the annual date your monthly payment will change each year is July 1.
9.LATE Renewal Applications
Once you have made your last IDR payment and you received your new annual repayment you are required to reapply for LRAP. We have been sending one-time courtesy e-mails to MANY late applicants. This e-mail will not occur in the future due to your servicer providing you with an e-mail. Your new IDR document should trigger you to reapply for LRAP. Tracking participants down to reapply is not within our guidelines as it is your responsibility to provide us with an on-time, complete application. If there are issues with your servicer, please let us know (DO NOT SUBMIT AN INCOMPLETE APPLICATION), but if we do not hear from you and you do not reapply during your annual review period (this information is in your award letter from what you reported to us on your last LRAP application), we will be permanently terminating participants.
This is still not a required document, but we do encourage you to submit this form around the next time you have to renew your IDR application with your servicer. If your loans are not with FedLoan Servicing (Public Service Provider), then they will transfer to them. Please continue to keep records of all your eligible payments especially if your servicer is changing. If you want to qualify for Public Service Loan Forgiveness now or in the future, complete and submit the ECF. In order to ensure you’re on track to receive forgiveness, you would continue to submit this form both annually and every time you switch employers.
11.President Trump’s 2018 Budget and State of PSLF
Student loan experts are urging all borrowers to remain calm in light of the proposed changes. Congress has never retroactively removed a benefit from student loan borrowers, but you should continue to talk to your representatives regarding any potential impact. If/when any changes come to fruition (proposed for July 1, 2018) we will let you know if/how it will affect you or our LRAP program.
12.Uploading LRAP Documents
Please make sure you have all required documents before you submit your application (even if you are submitting it late). We would rather you have a complete/late application, than an incomplete application. This requires us to e-mail you multiple times and takes us longer to process your application. Please also make sure you are uploading the specific document requested in each category. In other words, don’t upload all documents multiple times to each of the required fields.
13.What should you do if you have more than 10 loans to list in the online LRAP Application
You can group all Federal loans with the same service provider together. For example, if you have one Federal loan payment with one servicer, you can just enter one loan and not break them down for each individual loan type (including Direct Consolidation, Direct Stafford and/or Direct Grad PLUS) or payment amount. If you have two Federal loan service providers then you should list those separately as well as any Bar Loan. You should select any loan type and average the interest rates. The important information in the loan section is your total loan payment and total debt amount. When you upload your loan repayment scheduled and history, this gives us the rest of the important information and supports what you report in the loan section.
14.The Repayment Estimator is your friend!
Even though it states “estimator” in its name the IDR your servicer calculates per month is derived directly from this tool, as it is a product of studentloans.gov. This tells you if they keyed everything into the estimator correctly from the income and household size you reported on your IDR application. The only discrepancy should be rounding your monthly payment to the nearest whole number.
•We have an Overview of the IDR Calculation
on our LRAP homepage, which provides you with instructions on completing the estimator. Even though the estimator asks for you to enter your Adjusted Gross Income (AGI), we have always stated you will enter the income you provided to your servicer (AGI on your federal taxes or Federal Taxable income on your paystub).
•It seems to be much easier AND more accurate for those who report their AGI from their tax return. If you are reporting your paystub you need to inform them of your pay frequency (PLEASE NOTE: bi-monthly is 24 weeks and bi-weekly is 26 weeks), and they should be using your federal taxable income figure (this figure does NOT include retirement).
•If you are married, it doesn’t matter how you filed your most recent federal tax return (separately or jointly), you are considered a family size of 2. If you have dependents, it doesn’t matter who claims those dependents on the tax return, if they live in your household, then they should be included as family members as well (this also includes unborn children if you or your spouse are expecting).
15.LRAP is providing you with a maximum of 120 months of assistance.
If you make a payment that is ineligible for PSLF (too early, too late (NOT within 15 days of your due date), or just pay one lump sum), then you will need to make payments out of pocket on the back end which will most likely be higher as your income should (hopefully) increase each year.
Kelli and I are the LRAP hotline. If you cannot reach us at this number, please contact the main number at 202-662-9210 and ask for one of us. If all else fails, please send us an e-mail.
In order to be eligible for PSLF you must be in:
•Qualifying Employment – working full-time, in a paid position for a 501(c)3 organization, or U.S. government agency
•Qualifying Repayment – repaying your loans under any of the income driven repayment plans (IBR, PAYE, REPAYE, ICR) or the Standard 10 year repayment plan.
•Qualifying Loans – All loans in repayment MUST be Federal Direct Loans
18.Please double check that all of your loans are under the Federal Direct Loan Program by going to NSLDS.
It has come to our attention that a few people were unaware that they are paying on some non-Direct loans. These loans are NOT earning any time toward forgiveness. If you have any non-Direct loans please consolidate just these loans
19.Do NOT renew with LRAP until all payments are made from the prior award term.
(i.e. if we provided you with an award through April 2017 and your new payment starts in May 2017, please do not reapply for LRAP until you have proof of payment for April 2017).