Loan Forgiveness Program

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Since 1986, The Yale School of Management has provided support to qualified alumni working in the public or nonprofit sectors through a generous educational loan forgiveness program. The Yale School of Management Loan Forgiveness Program was the first program of its kind, and has provided a model for similar programs at business schools. Since its establishment, the School has provided more than $8 million in support to over 400 alumni around the country. It is the most generous loan forgiveness program among business schools.

Alumni of the Yale School of Management MBA and MAM programs are eligible if they meet the requirements in respect to type of employment, income, and eligible education loans. Beginning with the Class of 2009, the program has expanded to include qualified SOM graduates who work in L3C organizations and certified B Corporations, and provide pro-rated support to graduates working part-time.

The program supports the repayment of annual need-based loans. Beginning with the Class of 2017, the Loan Forgiveness Program will support the repayment of annual need-based loans to a maximum of $10,100 per year. The income level at which the program fully supports loan repayment is adjusted annually according to changes in the cost of living. A maximum income level for program support is set annually, equal to the average starting salary of that year’s graduating class. MBA alumni may apply at any time during the first 10 years following graduation. International students are also eligible for the loan forgiveness program. 

The terms of the Loan Forgiveness Program are subject to change at any time.

Eligibility

Application and Renewal Procedure

Calculation of Awards


Eligibility

Employment Eligibility

Employment in a government organization or nonprofit 501(c)(3) or 501(c)(4) tax-exempt organization in the United States, or the equivalent abroad. Up to 3 months of family leave are permitted, provided the participant returns to eligible employment. Part-time employment is eligible for pro-rated support.

For graduates of the Class of 2009 and subsequent classes employment in a Low-profit Limited Liability Company (L3C) or certified B Corporation is also eligible for support.

Income Eligibility

Beginning with the second year following graduation, income is the applicant’s annual salary as verified by the employer, together with other income (e.g., interest, dividend, capital gains, trust, etc.) listed on the most recent federal income tax return.

Spouse’s salary is included in the calculation (see Award Calculation section). A deduction of $5,000 for each dependent claimed on the federal income tax return is included in the calculation.

Income Program Coverage
 Up to $83,900 Program covers 100% of payment on eligible loans
$83,900-$111,000 Support is pro-rated
$111,000+ Ineligible for support

 

 

 

*These levels are effective for January 1-December 31, 2014 only. Effective January 1, each year the full-support income level is adjusted to reflect cost-of-living changes and the maximum income level is adjusted based on the average salary of the prior May's graduating class.

Alumni who graduated prior to July 1, 2011 will be exempt from the maximum support limit and will continue to contribute 20% of income above the full-support level. Alumni of joint degree programs who graduate after July 1, 2011 but matriculated by September 2009 are likewise exempt from the income limit and will contribute 20% of income above the full-support level.  

Loan Eligibility and Annual Cap

The maximum eligible loans for the academic year equal the lesser of:

  • The cost of attendance for a single student, minus the FAFSA-determined expected family contribution (EFC), minus any scholarship or grant OR
  • $10,100 per year, subject to adjustment of inflation

All awards are subject an annual cap of $10,100 per recipient. Loans must be certified by the School of Management Office of Financial Aid. Loans taken to replace the student’s EFC are not eligible for support, nor are loans from family or friends. Loans that are in forbearance or deferment are not eligible for Loan Forgiveness support during the period of forbearance or deferment. Alumni who are eligible to participate in a program during which they have loan forbearance, such as a return to school, are not eligible for Loan Forgiveness during the period of their program. 

For joint degree graduates, only loans taken during the semesters in which tuition was paid to SOM are eligible for support. International students should contact the Office of Financial Aid for information about loan eligibility.


Application and Renewal Procedure

When to Apply

All loan forgiveness program applications and renewals are accepted during two periods: November 1 – 30 and May 1 – 31. Graduates may apply during either of these windows. Support begins with the month in which the graduate is eligible and may be back-dated if that occurs prior to the application open period. No support will be backdated more than 5 months.

Participants are required to submit renewal applications annually in order to receive support for the following year.

Except for initial applicants, compensation from the SOM Loan Forgiveness Program is a prepayment: January payments are for January – June, and July payments are for July – December. 

How to Apply

All applications must be submitted online via the LFP Online Application. Paper applications will not be accepted. You will be required to submit the following documents:

  1. Federal tax return(s) for your household
  2. Eligible employment verification form
  3. Proof of loan(s) repayment
  4. Any other documents that support your eligibility

If you have a change of circumstances, please let us know within 30 days. Alumni should review the information on the Alumni Portal.

Length of Program Participation

Typically May graduates enter repayment in November with their first payment due December. Graduates may apply in the November cycle following graduation, although a proof of loan payment post-grace period will be required before an award is issued. Participants may continue to qualify, or move in and out of qualification for the program until ten years from the date they graduated.

We do not reimburse participants for pre-payments made while in-school or during the standard 6-month grace period. Graduates who are eligible to participate in other forgiveness or forbearance/deferment programs must do so.

Graduation Date First Eligible Application Date Last Month of Eligibility
May 2016 November 2016 May 2026



 

Calculation of Awards

The SOM Office of Financial Aid will determine all awards. Decisions made by the Office of Financial Aid are final.

Loan Forgiveness Program funds are disbursed directly to participants semi-annually (January and July), based on a standard ten-year loan repayment schedule. They are meant to be loan pre-payments, but checks may arrive after the first month’s loan payment is due.

Participants are responsible for making all loan payments and complying with all processing requirements imposed by lenders and collection entities. Graduates who are delinquent with loan repayment at the time of application will not be eligible for the Loan Forgiveness Program; failure to remain in good standing with repayment obligations will result in termination from the program. Participants are required to inform the SOM Office of Financial Aid immediately about any change in eligibility status during the year.

Example A

Eligible Loan Calculation
$41,000 at 6.8% Monthly repayment for 10 years = $584.92
$10,000 at 6.41%  
= $51,000 + interest  
Eligible Income Calculation  
Adjusted gross income= $80,000 Support level = 100%
Award Calculation  
January - June Award = $584.92 x 6 months Annual Support = $7019.04     
July - December Award = $584.92 x 6 months  

Example B

Eligible Loan Calculation
$41,000 at 6.8% Monthly repayment for 10 years = $1,196.63
$60,000 at 7.9%  
= $101,000 + interest  
Eligible Income Calcuation (Household)  
Your salary = $80,000 Support level = 96%
Your husband's salary = $90,000  
No other income  
Adjusted gross income = ($80,000 + $90,000) / 2  
Award Calculation  
January - June Award = ($1,196.63 x .96) x 6 months Possible annual support pre-cap = $13,776.68
Cap applied at $5,050  
July - December Award = ($1,196.63 x .96) x 6 months Actual annual support once cap applied = $10,100
Cap applied at $5,050