Loan Repayment Assistance Program (LRAP)
The Vermont Bar Foundation (VBF) is a charitable organization that supports programs that promote access to justice in Vermont.
VBF’s statewide Loan Repayment Assistance Program (VBF-LRAP) provides loan assistance for licensed attorneys employed in non-profit organizations dedicated to serving the civil legal needs of low-income individuals and families in Vermont or employed by the Office of the Defender General.
This program is designed to assist attorneys who have incurred significant educational debt so they can work in civil legal aid programs or in the Office of the Defender General.
The goal of VBF-LRAP is to assist attorneys who choose and wish to remain in employment in civil legal aid, or in the Office of the Defender General, and to assist civil legal aid organizations and the Office of the Defender General in recruiting and retaining qualified lawyers. VBF-LRAP directs assistance in the form of a forgivable loan to applicants who would otherwise be precluded from accepting qualifying employment or who would be unable to continue to work in qualifying employment because of salaries that do not support their student loan debt burden.
All participants must be licensed to practice law in the State of Vermont.
Participants must be employed by a qualifying employer. Participants may be employed full-time or part-time. Assistance to part-time attorneys shall be pro-rated. For example, attorneys who work four days per week receive 80 percent of the assistance for which they would be eligible if they were full-time. LRAP is currently open to attorneys employed by:
- Disability Rights Vermont
- Have Justice-Will Travel, Inc.
- Legal Services LawLine of Vermont
- Office of the Public Defenders, (Employees)
- South Royalton Legal Clinics of Vermont Law School
- Spectrum Youth and Family Services
- Vermont Legal Aid, Inc.
Other organizations may apply for approval to the VBF Board of Directors.
- Financial Eligibility
A participant’s salary may not exceed $60,000.
- Eligible Loans
Undergraduate, graduate and law school loans will be considered in determining the amount of assistance. Family and personal loans are excluded. Also excluded are loans for other than educational purposes.
A maximum loan of $5,000 per year may be awarded to each approved participant. Loan assistance shall be paid twice a year directly to the participant on a prospective basis. The number and amount of awards may be limited in the discretion of the Grants Committee of VBF-LRAP.
Application and Verification Procedures
Applications must be completed with the required documentation and submitted to the VBF by the deadline for consideration. The Grants Committee of VBF-LRAP reviews and makes decisions regarding eligibility and amounts of assistance. All information submitted in the applications is confidential.
If given an award, the participant shall submit documentation regarding employment and proof of loan payments every 6 months in compliance with the conditions and deadlines in the award letter.
Any financial or employment status changes shall be reported immediately by the participant to the VBF.
Notification to Applicants
All applicants will be notified by mail of the results of their application.
Loan Disbursement to Participants
VBF-LRAP assistance must be used by the participant to pay educational loan debt. Assistance will be disbursed in the form of a check equaling one-half of the total annual award amount. In order to receive the second check, the participant must submit proof of educational loan payments equaling half of the annual award amount during the first 6 months of the award cycle. Program assistance will, in no instance, be more than the amount of loan repayment paid by the participant.
- Participant’s Salary Exceeds $60,000 During Award Cycle
If a participant’s salary is increased to more than $60,000 during an award cycle, the participant shall remain eligible for assistance during that award cycle and there will be no change in the award amount.
- Participant Terminates Qualified Employment
Assistance shall cease when a participant terminates qualified employment. Participants that terminate qualified employment during an award cycle shall re- pay assistance that is not forgiven.
- Participant Changes Employment to Another Qualified Employer
If a participant changes employment to another qualifying employer during an award cycle, the participant’s eligibility will be reviewed by the VBF. If the participant’s salary with the new employer exceeds $60,000, the participant shall remain eligible for assistance during the current award cycle and there will be no change in the award amount.
- Former Participants
Former participants may apply in future award cycles if they have qualifying employment and income.
Discharge of Loans
Each loan shall be documented by means of a promissory note executed by the borrower in a form provided by the VBF. The loans given by the VBF will be forgivable to the extent the participant meets all applicable employment, income and other program requirements during the applicable program year. The VBF will forgive the loan at the end of the annual award year.
Federal Income Tax Liability
The VBF attempted to design this program to provide the maximum potential tax benefit to participants under changes in 1997 to Sections 108(f) of the Internal Revenue Code. The VBF believes it has structured this program so that the loan amounts forgiven by the VBF are not considered taxable income to the recipient, and thus do not have to be reported as such. However, there is very little authoritative legal guidance available to determine with certainty the proper tax treatment of this structure. The recipient remains solely responsible for any federal, state or local income tax liability s/he may incur because of the forgiveness of the VBF loan.
All inquiries and correspondence about the program, including application procedures and deadlines, should be directed to:
Deborah Bailey, Executive Director
Vermont Bar Foundation
P.O. Box 1170
Montpelier, VT 05601-1170
Phone 802 223-1400
Fax 802 229-4051