FAQs About the Virginia Loan Forgiveness Program

FAQs About the Virginia Loan Forgiveness Program

These FAQs provide a brief overview of the three loan repayment programs at the University of Virginia School of Law. For answers to your specific questions and more detailed guidance for your individual circumstances, please contact Financial Aid at (434) 243-3361.

 

What is UVA Law’s Virginia Loan Forgiveness Program (VLFP)?

UVA Law administers three loan repayment assistance programs for its graduates. All three programs provide benefits on an annual basis to participants in order to help them pay off their federal loans for law school. They all serve the same mission and operate in the same way but differ in who they cover, as explained below:

  • Virginia Loan Forgiveness Program II (VLFP II) is our largest program. It covers graduates from the Classes of 2013 or later who work in qualifying public service employment.
  • Virginia Loan Forgiveness Program I (VLFP I) is an earlier version of VLFP II that applies solely to graduates from the Classes of 2012 or earlier.
  • Virginia Loan Commonwealth Plan (VLCP) covers graduates from the Classes of 2014 or later who work in qualifying private-sector positions that focus on an underserved part of the Commonwealth.

Is UVA Law’s VLFP the same as the federal government’s Public Service Loan Forgiveness program?

No, UVA Law’s three loan repayment assistance programs are independent from the federal government’s Public Service Loan Forgiveness (PSLF) Program. Our programs help alumni by providing them funds that will assist them in making their own federal loan payments. Our programs don’t “forgive” federal IBR or PAYE loans, although we pay benefits in the form of forgivable loans.

The federal PSLF does not provide funds to participants. PSLF does, however, forgive federal loan balances of eligible participants once they have successfully met all the requirements of the program, such as working for a total of 120 months (10 years) in public service employment. For more information about the federal PSLF, including its definitions of qualifying employment, please review the PSLF website.

Many UVA Law graduates working in public service positions enroll in both UVA Law’s VLFP and the federal PSLF. We encourage you to review both programs and to ask Financial Aid if you need help understanding how they might apply to you.

Who is eligible for VLFP benefits?

J.D. graduates of the University of Virginia School of Law are eligible for VLFP I and II benefits if they meet the following requirements:

  • Enter qualifying public service employment (see FAQ below) within two years of graduation or within two years of completing a judicial clerkship which is taken immediately after graduation and is itself no longer than two years in duration;
  • Apply for VLFP II benefits within the first enrollment period following the start of qualifying employment;
  • Earn $85,000 or less in annual income; and
  • Have placed their law school loans in a federal Income-Driven repayment plan; and
  • Have kept their law school loans in good standing.

What kind of public service employment qualifies for VLFP benefits?

We define “public service employment” broadly under VLFP I and II to cover both full- and part-time positions with:

  • federal, state, local, and foreign governments;
  • public interest organizations, such as legal aid offices and nonprofits;
  • prosecutor and public defender offices; and
  • legal reform groups that qualify as nonprofit organizations under the criteria used by the Internal Revenue Code.

In addition, qualifying positions must be paid and necessitate the use of legal skills. The work may be performed anywhere in the world. It may be full-time or part-time, although part-time employment will result in a prorated benefit.

Finally, public service employment does not include traditional one- or two-year judicial clerkships. However, if you start a judicial clerkship immediately after graduation, you’ll still have two full years following the clerkship to enter qualifying public service employment. In addition, public service employment does include court staff attorney positions and career judicial clerkships that last more than two years.

What are the benefits under VLFP?

VLFP participants receive an annual benefit at the start of the calendar year in the form of a forgivable loan. If, by the end of the calendar year, they’ve remained eligible for their VLFP benefit, that loan will be forgiven and be considered tax-free income.

The amount of your benefit will depend on your Program Adjusted Income (PAI).

Here’s an example that illustrates how much funding is offered to applicants:

Projected Income

VLFP ll Benefit Amount Percentage

Amount Applicant Pays Toward UVA Loan Payments 

Up to $65,000

100%

               0%

$70,000

75%

             25%

$75,000

50%

             50%

$80,000

25%

             75%

$85,000 and over

0%

           100%

How long do VLFP benefits last?

Participants receive up to ten years of VFLP benefits if they continue to stay eligible for benefits under program requirements. For instance, if your annual income exceeds the current maximum amount, you would no longer qualify for VLFP coverage.

Does spousal income count for VLFP eligibility or affect the amount of one’s VLFP benefit?

VLFP covers both married and single J.D. graduates. Many VLFP recipients are married. Whether your spouse’s income will count toward determining your eligibility and benefit amount under VLFP depends on both your own Program Adjusted Income (PAI) and the PAI of your spouse.

Your spouse’s PAI will be determined in the same way that your own PAI is determined—a combination of salary and other income, minus any graduate loan debt.

Here are two scenarios to illustrate how spousal income might be calculated:

#1: Your spouse’s PAI is the same or lower than yours.

In this scenario, we would not count your spouse’s PAI at all.

#2: Your spouse’s PAI is higher than yours.

In this scenario, we’ll add your PAI and your spouse’s PAI together and divide by two to get an average. We’ll then determine which number is higher: the average or your individual PAI. The higher number will be used to determine your overall PAI.

Example:

You earn $54,000/year as a public defender, receive no other forms of outside income, and have $180,000 in federal law school loans. Your spouse earns a $75,000 salary, receives $6,000/year in investment earnings, and has $110,000 in graduate school loans (would need to be reduced to monthly payments, etc.).

Your PAI is $54,000.

Your spouse’s PAI is $81,000.

Because your spouse’s PAI is higher than yours, we will add your PAI to your spouse’s and divide by two, reaching $67,500. This number is higher than your individual PAI, so we would use $67,500 as your PAI for purposes of VLFP. (Note that this PAI still takes into consideration the amount of law school/graduate loans.)

Can I temporarily exit VLFP and come back in order to pursue a judicial clerkship or attend to personal emergencies?

Yes, we regularly allow VLFP participants to take a temporary leave from the VLFP program in order to attend to extenuating circumstances such as childbirth, disability, medical and family emergencies, losing a job, moving to another state or country, or exiting public service employment for one or two years in order to pursue a judicial clerkship. Temporary exits from the program are called a “deferral” or “leave of absence” from the program.

We approve deferrals as long as your reasons for taking a deferral are due to extenuating circumstances. Once your deferral has ended, you may re-enter VLFP as long as you are in qualifying public service employment and remain otherwise eligible for benefits.

What do I need to do to receive VLFP benefits?

The VLFP II program description summarizes all the major requirements regarding VFLP participation. But here are a few of the most important steps to keep in mind:

  • Start your qualifying public service employment within 2 years of graduation or 2 years of finishing a 1-2 year judicial clerkship immediately after law school;
  • Enroll in VLFP in the first cycle after you’ve started public service employment;
  • Pay your IBR/PAYE loans on time to stay in good standing; and
  • Submit documents each year, using our online VLFP portal, about your job and finances so that your eligibility and benefit amounts can be determined.

How can I get answers to other questions about VLFP?

We’re very happy to talk with you about any questions you have about VLFP or how you can create a financial plan for working in public service! The best way to reach out is to call (434) 243-3361 or via email at vlfp@law.virginia.edu.