Pennsylvania Bar Foundation-PA IOLTA Board Loan Repayment Assistance Program

On January 2, 2012, the Pennsylvania Bar Foundation and the Pennsylvania Interest on Lawyers Trust Account Board (PA-IOLTA) began the second year of the statewide loan repayment assistance program (LRAP).

The program is designed to help attorneys employed at IOLTA-funded legal services organizations better manage their law school loan debt and to help IOLTA-funded legal aid organizations recruit and retain the best and the brightest attorneys for service in the public good. The program is designed to help attorneys employed at IOLTA-funded legal services organizations better manage their law school loan debt and to help IOLTA-funded legal aid organizations recruit and retain the best and the brightest attorneys for service in the public good.

Loan applicants must be licensed to practice law in Pennsylvania or be permitted to practice law under Bar Admission Rule 311, have a valid Pennsylvania Supreme Court-identification number, be in good standing and practice law as an employee of an IOLTA-funded organization. At this time, the applicant’s total gross salary may not exceed $62,000, and at the time of application, the amount of educational debt based on loans from commercial and government lending institutions, as well as university or other private institutional loans associated with law school and undergraduate educational debts must be greater than or equal to the amount of the LRAP grant. The attorney’s qualifying educational debt must be in satisfactory repayment.

The program provides one-year loans, payable to qualified attorneys quarterly, with a 12-month employment requirement at qualifying organizations. Providing a participating attorney continues to meet the eligibility requirements, the attorney can apply for and receive up to ten, one-year loans over his/her tenure in qualified employment. The loans must be used to repay loans incurred for undergraduate and law school education costs and bar exam study and will be forgiven at the end of each year if eligibility requirements have been met.

The Bar Foundation will administer one loan assistance cycle each year beginning September 1. The amount of loan assistance provided to each applicant will depend on the available funding, the number of qualifying attorney applicants and the length of time a loan recipient remains in the program.

First year program participants are eligible for a maximum loan of $3,500 if their annual net student loan debt service is greater than or equal to $3,500. Those first year participants with annual net student loan debt less than $3,500 will receive loans in the amount of their actual annual net debt service.

Second year program participants (i.e., those first year LRAP loan recipients who continue in eligible employment for a second year) are eligible for a maximum loan of $4,500 if their annual net student loan debt is greater than or equal to $4,500. Those second year participants with annual net debt service less than $4,500 will receive loans in the amount of their actual annual net debt service.

Third year program participants (i.e., those second year LRAP loan recipients who continue in eligible employment for a third year) are eligible for a maximum loan of $6,000 if their annual net student loan debt is greater than or equal to $6,000. Those third year participants with annual net student debt less than $6,000 will receive loans in the amount of their actual annual net debt service.

The next application cycle begins on September 1, 2012. The LRAP application and accompanying attorney and employer certifications will be due no later than October 14, 2012. The Foundation will review all applications and send loan commitment letters, loan agreements and truth-in-lending statements to those selected to participate in the program by November 30, 2012. Participating attorneys will have until December 14, 2012 to return the signed loan agreement to the Foundation. The fully executed loan agreement and the first quarter loan disbursement will follow by January 2, 2013. The Foundation will make the remaining quarterly disbursements based on receipt of the quarterly certifications of eligibility on the following scheduled: