WASHINGTON (CBSDC) - Ever wonder if you could have become a lawyer had you not had to pay the cost of law school?
Well, now you can, and you won’t have to, according to a recent Washington Post report.
Georgetown Law students are taking advantage of the Loan Repayment Assistance Program (LRAP), a loan program from the federal government which forgives the loan after 10 years, provided that upon graduating, the student commits to working for the government or for nonprofits, while making $75,000 a year or less for the next decade.
The program is a windfall for Georgetown as well.
The school’s taking advantage of a loophole which virtually prevents the institution from ever losing money in that ten year process.
According to the report, Georgetown Law students using the LRAP loans are also using loans from Grad PLUS, another federal government loan program for grad students. Grad PLUS can fund the cost of tuition and fees, as well as living expenses like housing and food, because there’s no limit to the amount students can take out.
So when the students graduate, they enroll in the LRAP, get jobs working for a nonprofit, and the federal government forgives the loans ten years later, WaPo explains. During that ten-year period however, the borrower has to pay a share of their income, which is actually paid by Georgetown under the LRAP.
Here’s where the loophole comes into play.
Tuition that’s paid by incoming Georgetown students also includes the cost of covering the previous students’ loan payments, the report says. Many of these new students are paying for their own tuition using federal student loans; so essentially, Georgetown is using federal student loans to pay off federal student loans, and everybody wins except the government.
It’s all very confusing, so for further explanation, read the original report in the Washington Post here.
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