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In accord with the School’s mission of educating leaders for business
and society, the Yale School of Management supports a Loan Forgiveness
Program for SOM alumni working in the nonprofit or public sectors.
Participants with annual income less than $77,600 receive 100% of
their loan payments. Participants with income higher than $77,600
are expected to contribute 20% of the amount above $77,600 toward
loan repayment. The School of Management is committed to raising
the income threshold annually in line with national cost-of-living
increases.
Eligibility is based on: type of employment, income, and need-based
educational indebtedness.
Alumni may apply at any time during the first 10 years following
graduation. Alumni engaged in a program during which they have loan
forbearance, such as a medical residency, are not eligible for Loan
Forgiveness during the period of their program.
International students are eligible for loan forgiveness. International
students are advised to bring their tax returns and information
about their employment during the two years prior to enrollment
in the School of Management when they start at the School of Management.
This information will be necessary for their loan forgiveness application
during their second year of the MBA program. For more information,
students should contact the Financial Aid Office, karen.wellman@yale.edu.
Eligible employment is defined as full-time 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.
For alumni in the first year following graduation, income is the
total annual compensation as specified in the offer of employment.
Beginning with the second year following graduation, income is
the applicant’s annual salary as verified by the employer, together
with any additional (e.g., interest/dividend) income listed on the
most recent federal income tax return. Spouses’ salary is excluded
from the income calculation. Participants may deduct $5,000 for
each dependent claimed on their federal income tax returns.
| Income |
Program Coverage |
| Up to $77,600 |
Program covers 100% of loan payments |
| $77,600+ |
Participant contributes 20%
of income above $77,600 to their annual loan payments.
Example: participant with Income of $85,000 will contribute
$1,480 (20% of $7,400) |
Need is determined at the time loans are taken and is defined
as the cost of attendance (the annual student budget), minus the
FAFSA-determined expected
family contribution (EFC) and any scholarship or grant awarded
by the school.
Need = Cost of Attendance - (EFC + scholarship/grant)
Only loans taken to meet need and certified by the School are eligible
for support from the Program. Loans taken to replace the student’s
EFC are not eligible for support, nor are loans from family or friends.
Note for joint degree students: need-based loans taken during the
semesters in which you paid tuition to SOM are eligible for support.
Participants are required to submit renewal applications annually
by November 15, and to inform the SOM Financial Aid Office immediately
about any change in eligibility status during the year.
The followng supporting documents are required with the application
or renewal:
- If applying within the first year following graduation:
Employment offer letter indicating first year’s total compensation
If applying in the second year following graduation or
beyond:
a) Employer’s verification of current employment and salary
b) A copy of your federal income tax return for the most recent
tax year
- Verification of employer’s 50(c)(3) or 501(c)(4) status
or foreign equivalent (an explanation of the relevant country
tax code or similar information). Applicants employed by government
agencies or nonproprietary educational institutions need not submit
proof of tax-exempt status.
- A copy of the most recent statement from your lender showing
the principal balance, monthly payment
amount, and current status for the educational loans you took
while at SOM.
To receive application materials, please email karen.wellman@yale.edu
Loan Forgiveness Program funds are disbursed directly to participants
semi-annually (January and July), based on a standard ten-year loan
repayment schedule. Disbursements are made in the form of a one-year,
non-taxable, no-interest loan. Provided that the participant remains
eligible, this loan is forgiven at the end of the year.
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.
Email karen.wellman@yale.edu
with any questions about the program.
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