Life After Hofstra Law School

Federal Loan Consolidation

Federal Loan Consolidation is available under the Federal Family Education Loan Program(FFELP) as authorized by the federal government. Federal Loan Consolidation is designed to help individuals who have high monthly student loan payments. With Federal Loan Consolidation, you can consolidate all or some of your outstanding education loans, even if your loans are currently held by more than one lender and are of different loan types. Federal Loan Consolidation creates a single, new loan with one monthly payment.

While there is no deadline to apply for a Federal Consolidation loan, there are several things to consider when deciding on when to consolidate. In order to be eligible for a Federal Consolidation Loan under the Federal Family Education Loan Program (FFELP), you must be in the grace period or already in repayment on each loan you select to consolidate. Repayment includes loans that are in forbearance or deferment. Once the grace period or an approved period of deferment has ended on your federal student loans, the higher in-repayment interest rate will be used to calculate your weighted average fixed rate. Therefore, your fixed interest rate for the Federal Consolidation Loan will be higher if you consolidate after your grace period or approved deferment.

No credit check to obtain a Federal Consolidation Loan, however, you must not be in default on a Federal Student Loan.

If one lender holds all of your Federal Family Education Loans (FFELP), the borrower should contact and consolidate with that lender. If the loans are held by multiple lenders, the borrower can contact one of their current lenders or choose a different lender. If the current lender does not offer Federal Consolidation loans, the borrower may select any lender. Some lenders offer money-saving repayment incentives, such as an immediate interest discount for automatic debit, and benefits for 36 - 48 on-time monthly payments. However, as most graduating law students know there is intense marketing regarding their student loans and they should be very careful in selecting a consolidation lender.

Loans that are eligible for Federal Loan Consolidation are:

• Federal Stafford Loans (subsidized and unsubsidized)
• Federal Direct Loans
• Federal Perkins Loans
• Federal Insured Student Loan (FISL)
• Auxiliary Loan to Assist Students (ALAS)
• Federal PLUS Loans (if you are the borrower)
• Federal Supplemental Loans for Students (SLS)
• National Direct Student Loans (NDSL)
• Loans for Disadvantaged Students (LDS)

Non-federal education loans such as private loans, school-based loans or loans from family members are not eligible for consolidation under the Federal Consolidation Loan program.

Private/Alternative loan repayment options may be available through private lenders, but they may not include the same benefits as the Federal Loan Consolidation program. For additional information, contact your private loan lender.

The fixed interest rate for your Federal Consolidation loan is based on the weighted average of the interest rates of the loans you consolidate rounded up to the nearest 1/8th percent and capped at 8.25%. Students who are in the grace period of their loans may qualify for an even lower rate.

Benefits of Federal Loan Consolidation:

• A single and lower monthly payment
• Convenience – easier to manage one loan versus loans with multiple lenders
• Consolidate undergraduate and graduate federal loans
• Easy on-line application process
• No pre-payment penalty
• No loan fees
• Deferment and forbearance options
• Lender repayment incentives
• Extended repayment periods
• Eligible for the federal interest deduction for education loans (assuming students meet the IRS income eligibility requirement)
• More disposable income each month due to a lower monthly payment

Disadvantages of Federal Loan Consolidation

Reducing the monthly payment and extending repayment terms may increase the total interest charged on the loan. Borrowers who consolidate in the grace period will lose any grace period that would otherwise remain if they had not consolidated their loan. If federal loan interest rates increase, consolidating low interest rate loans may increase overall repayment costs, and the borrower may be locked into a higher interest rate.

Federal Loan Consolidation Repayment Options

Standard Plan – This plan allows you to make equal payments over the term of the loan. Each payment includes both principal and interest. This loan has the highest initial monthly payment, but results in the lowest total interest paid over the life of the loan.

Graduated Plan – This plan allows for your payments to start out low and increase over time. This plan allows for interest-only payments for the first quarter or third of the total repayment period, followed by increased payments for the remaining term of the loan.

Income-Sensitive Plan – This plan bases loan payments on a percentage of your gross monthly income and the amount borrowed. Repayment terms will vary based on the percentage you request, your income, and the total loan amount.

Extended Plan – Under an extended repayment schedule you can repay your Federal Consolidation Loan over a 30-year period, on a fixed or graduated payment plan, if you have federal loans totaling in excess of $60,000.

Repayment Begins on your Federal Consolidation Loan once your loan has been funded. You will receive a Federal Loan Consolidation Disclosure Statement and Repayment Schedule from the servicer of your new Consolidation loan. Thirty days from the date your loan is funded, you are required to begin repayment according to that schedule.

The Office of Financial Assistance recommends that you carefully evaluate the federal loan consolidation program, and make a decision based on your individual need.

LRAP Hofstra Law School Loan Repayment Program

Upon graduation, students who enter qualified areas of public interest employment may be eligible for LRAP to assist them with repaying their Hofstra Law School Loan debt. LRAP provides loan repayment assistance on a quarterly basis to qualified graduates. Thus far, our assistance has been limited to forgiving portions of outstanding Hofstra University School of Law Loans.

• You must have official state Bar Membership and be employed as an attorney by a government agency (local, state or federal) or by a non-profit employer satisfying Internal Revenue Code §501 (c) (3) or (4) for at least 6 months prior to application.
• You must be employed full-time in such a job during the entire calendar year. As in similar programs, judicial clerkships will not be included in this program.
• Your current income cannot exceed $56,000.The graduate’s income is calculated on the greater of (a) his or her income or (b) half the joint income of the graduate and his or her spouse. On calculating income, we will take a deduction of $3,500 per child for dependent care. 

Required Items to Apply for Program:

1. A completed Hofstra Law School LRAP application form (PDF).
2. Employer Certification Form (PDF) for the applicant, completed by the employer and indicating dates of employment, job title and annual salary Employer Certification form.
3. Signed photocopy of the applicant’s (and spouse’s) most recently filed Federal income tax return form 1040, 1040A, or 1040EZ, with all accompanying Schedules and photocopies of all W-2 forms.
4. A photocopy of the Hofstra Law School Loan billing statement

Hofstra University School of Law reassesses the program guidelines in accordance with the available resources each year. If a student is already in the Assistance program, the student will be required to re-apply each year by resubmitting an application with required forms to review eligibility. If while in the program, you make any changes that no longer fit the criteria of the program, you must contact the Financial Aid Office immediately.

New York State Attorney Loan Forgiveness Program

District Attorney Loan Forgiveness awards are being offered to retain experienced attorneys employed in district attorney offices throughout New York State.

Eligibility

To be eligible an applicant must meet all of the following criteria:

• Be a legal resident of New York State for at least one year
• Be a U.S. citizen or an eligible noncitizen
• Be an eligible attorney
• Have eligible student loan expenses*
• Be admitted to practice law in New York State
• Have held a degree from a law school for not more than 11 years
• Have been employed by a district attorney’s office in New York State for at least four years**
• Be a district attorney or assistant district attorney who is employed full time and has been employed full time during the year of qualified service*** immediately preceding their application

*Eligible student loan expenses means the total cumulative loan balance, at the time of application, required to be paid by the eligible attorney for student loans covering the cost of attendance at an undergraduate institution(s) and/or law school(s). Eligible student loan(s) include New York State or federal governmental loans, or loans made by commercial entities subject to governmental examination. This does not include PLUS loans, or loans which may be canceled under any other program including Perkins loans, or private loans given, for example, by family or friends, or student loan debts paid with a credit card. The attorney must not be in default on any student loan unless said loan is guaranteed by New York State Higher Education Services Corporation.

***Credit may be given for periods of time during which a district attorney was a law school graduate who, while awaiting admission to the New York State Bar, was employed by a prosecuting or criminal defense agency.

****Year of qualified service means the fourth through ninth years (365 days each) of full-time employment by a district attorney’s office as a district attorney or assistant district attorney in New York State.

How to Apply

Applications are generally available after July, 1.

Duration

Award disbursements under this program are available for up to six years of qualified service (based on available funding).

Award Amounts

The maximum lifetime total award an eligible attorney may receive under this program is $20,400 or the cumulative total of their eligible student loan expenses at the time they first apply, whichever is less. Eligible student loan expenses will be reduced by any grants, loan forgiveness, or similar reductions to the attorney’s indebtedness that the attorney has received or shall receive, including, but not limited to, law school loan forgiveness and public service scholarships.

Award Payment

Awards will be paid in disbursements of $3,400 for each year of qualified service immediately preceding the application for payment.

The District Attorney Loan Forgiveness Program Supplement will be used to establish a district attorney’s or assistant district attorney’s eligibility as well as process a recipient’s first award disbursement. In subsequent years, an award recipient must submit a payment application and verification of the preceding year of qualified service for which they seek an award disbursement.

For more information please go to: www.hesc.com

NYSBA Student Loan Assistance for the Public Interest (SLAPI)

Recognizing that the burden of law school debt can seriously shrink the pool of qualified candidates for public interest work, the New York State Bar Association (NYSBA) has launched the Student Loan Assistance for the Public Interest (SLAPI) program. To be eligible, you must have been admitted to the bar within the last five years, work full-time in a designated public service position, have incurred law school debt through institutional sources and meet enumerated salary limitations. To apply for a SLAPI award, complete an application and two certification forms and submit them by the deadline. More information about SLAPI, including an application form, can be found by visiting the NYSBA Web site.

LRAP Resources

The ABA’s Web site has some useful information concerning Federal, State, and Employer LRAP Programs. It is available at: www.abanet.org/legalservices/sclaid/lrap/home.html.