Things to Know Before You Begin
For Married Applicants: Filing Joint Federal Tax Returns
Your filing status on your federal tax return will have an impact on your IBR payment amount. To determine your IBR payment, when filing jointly, the government will calculate your payment using the joint income reported on your federal tax forms. In most cases, this will increase your IBR monthly payment. Married borrowers who file separate federal tax returns will have their IBR payments calculated based on their individual income.
Graduates will receive assistance from TolLRAP II based on their portion of the IBR payment if filing jointly (not based on the joint income). TolLRAP II awards will be calculated using the income documented in the Employment Verification Form. This could result in a payment from TolLRAP which is less than your required monthly IBR payment as required by the government.
Married applicants in TolLRAP I filing jointly will have their eligibility determined based on the higher of their individual income or half of the joint income.
Applicants should consider all financial ramifications carefully when determining your federal tax filing status. Consulting a tax advisor is recommended.
Consolidating Student Loans
Consolidation is not always necessary to participate in the Public Service Loan Forgiveness (PSLF) program and TolLRAP II. Consolidation is only necessary if you have ineligible loans through the old Federal Family Education Loan (FFEL/Stafford) or Perkins student loan programs. Be careful not to consolidate eligible Direct Loans upon which you have already made qualifying PSLF payments before coming to Law School. This action will nullify any qualifying payments made on these loans. The Perkins Loan also has separate cancellations benefits that can become invalid by consolidating this loan. Please review the Federal/StudentAid webpage to determine if consolidation is right for you.
Perkins Loan Cancellation Program
Before consolidating your Perkins Loan so that it can be included in the Public Service Loan Forgiveness (PSLF) program and thus be considered for TolLRAP II, consider the cancellation provisions already provided by this program. Law graduates who serve in Law enforcement (i.e. prosecutors or defense attorneys) can be eligible for the Perkins Loan Cancellation program. Under this program, the Perkins Loan could be forgiven sooner compared to the PSLF program, which could mean greater financial and career flexibility for the borrower.
Applying for IBR/PAYE or Public Service Loan Forgiveness (PSLF)
Applying for IBR or PAYE
- Determine eligibility using IBR Calculator
- Inform your loan servicer that you would like to apply for IBR/PAYE
- Follow instructions provided by your loan servicer or the on-line application can be found at www.studentLoans.gov
Applying for PSLF
- Download Employment Certification Form
- Have employer complete applicable section on form
- Submit completed form to FedLoan Servicing (it’s recommended that you complete this form each year)
- Upon review of your Employment Certification, additional documentation may be requested
- FedLoan Servicing will notify you if your employment qualifies, and if so, how many payments during the certification period were qualifying payments, the total number of qualifying payments you have made, and how many payments you must still make before you can qualify for PSLF
Additional information on PAYE/IBR and the PSLF program can be found below:
- Federal Student Aid(Office of the US Department of Education) – IBR
- Federal Student Aid(Office of the US Department of Education) – PSLF
- FedLoan – PSLF
- Employment Certification Form