COAPin' It Real
Dear Asha,
I am in the process of deciding between schools and am comparing the different loan repayment programs that some of them offer, including Yale. I'm having trouble really distinguishing the major differences between them. Can you help?
Thanks,
B.W.
Dear B.W.,
It's really important when looking at the loan repayment programs at the different law schools to be a lawyer and read the fine print. They may all look similar, but small differences in policy can make big differences in your life, and the choices you make, down the line.
I'll defer to my colleagues at other schools to explain their programs to you in detail. I can explain how Yale's program, called the Career Options Assistance Program (COAP), works. Basically, each year, the financial aid office sets a base salary, which for this year is $60,000. Any graduate making less than the base salary can have their entire imputed loan payment for the year that they are in that job covered by the Law School (as in the Law School writes you a check for your imputed loan payments for the year). If you make more than the base salary, you are expected to contribute 25% of the difference between your actual salary and the base salary (20% if you are married), and the Law School will make up the difference.
Notice that I mentioned that the $60,000 figure is a base salary, not a "cap." There is no cap under COAP. That is because your imputed loan payment will depend on a) the total amount of your law school loans (including up to $30,000 in need-based undergraduate loans); b) your interest rate; and c) your individual factors, such as your marital status, whether you have children or childcare expenses, the number of years you have been out of law school, etc. There will be a point at which every graduate will "phase out" of the program, but that point is different for each person. In other words, there are graduates who earn six-figure salaries but still receive assistance from COAP because of their debt burden and/or individual circumstances. (To see how various factors play out in calculating COAP awards, please click here.)
How is Yale's program different from most other schools'? Here are the major differences:
1. COAP is income-based, not job-based. That is, the only question COAP asks is, "How much do you earn?", not, "What do you do?" This is important because some loan repayment programs will distinguish between private and public employment, or between "legal" and "non legal" jobs. This is a tricky distinction to make -- you can be a solo practitioner, or work at a law firm in the midwest, and make only about $50-$60K a year even though you are in the "private sector." You might have a chance to work on Capitol Hill as a staffer, or be a press secretary for a politican -- and that may not qualify as "legal" work. Yale's program is designed leave any job path as an option -- we've even had someone on COAP go on to become a priest! (Note: As with most other loan forgiveness programs, COAP assistance during a judicial clerkship is given in the form of a loan, rather than a grant. This loan is subsumed in any COAP coverage following the clerkship, or is payable within one year if the graduate does not apply for COAP.)
2. COAP has no minimum time commitment. In this economy, this is SUPER important. You may have heard that some law firms have deferred their employment offers to would-be associates for one year, during which the firm will pay a stipend to do public interest work. Yale graduates who are in this situation will be eligible for COAP if they take this path, even if it's only for one year and they return to the law firm right after. Many programs have minimum time commitments of anywhere from 2 to 5 years -- if you leave your public interest job during this time, you have to pay back the money you have received. When you're just starting law school, it's tempting to feel like you know exactly what you'll be doing for the five years after law school. But trust me, it's not always so predictable so having the option to change jobs without penalty is a huge benefit. Yale graduates can also move in and out of the program, meaning that you can be covered by COAP for some time, not be covered for a while in another job, and come back again (for a total of 10 years of COAP coverage). Again, the flexibility can make all the difference in the options available to you.
3. COAP takes individual factors into account. Yale's program takes into account a number of factors which you may encounter after graduation. For example, full COAP coverage is available for up to six months of maternity/paternity leave, and part-time work is also covered. Generous deductions (in terms of computing your adjusted COAP income) are available for children, child care expenses, and spousal income and spousal loan obligations. We allow you to shelter a certain amount of liquid savings for each year you are out of law school, which allows you to build up your savings without penalty. And we don't even look at anything you are saving for retirement. The best thing is, since Yale is such a small school, anything else that comes up will be dealt with on a personal, case-by-case basis.
One final word. Every year I have a couple of conversations with students who are "committed" to working in government or the public interest, but tell me, "That's great that Yale will help me pay my loans but even so, $60,000 is not enough to [save for a house/buy a car/raise a family] etc.etc."
Here's the deal. COAP is designed to allow you to make your career choices without having to worry about paying off your loans. That doesn't mean that you won't still have some hard financial choices to make (unless of course you marry rich, which is an underdiscussed and underutilized option, but that's another post, and probably another blog). Even without loans in the picture, going into public interest work does entail tradeoffs, primarily that you'll be making a lower salary than you could potentially make. This means that yes, it might take you longer to save for a house, you may not be able to afford a live-in nanny, or you can't buy all the toys and gadgets you want, when you want to. But if fast money, fast cars, and fast men/women are what you're looking for, working at the Southern Poverty Law Center may not be the best fit. On the flip side (speaking as someone who has worked in government or non-profit her whole career), public interest work can offer you substantial responsibility, rewarding work, and a better work-life balance than the private sector. It can be a tough choice, but most people find the public interest avenue more than worthwhile.
-- Asha