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Participants allocate, according to the Participant Contribution formula, a limited percentage of their earnings toward their total annual education loan repayment. LIPP covers any difference between the graduate's total eligible law school debt payments due in that year and their expected contribution toward eligible loan payments.
LIPP policy requires consideration of income from all sources when calculating the Participant Contribution. This includes income from all employment, housing allowances, living allowances, subsistence allowances, bonuses, settlements, alimony, child support and rental income. In regards to bonuses and settlements, the gross amount is added to the annual income of the participant and used to calculate the LIPP income for the six months following its disbursement.
For those participants who are paid via an hourly wage and who do not receive paid vacations, such as temporary workers, we use a 48 week year to determine an annual income. We do this to account for the two weeks of holidays businesses are generally closed and to allow for a reasonable two weeks of vacation per year.
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