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Academic Policy Manual – July 22, 2024
IA = Included Assets
Twenty-five percent (25%) of the applicant’s assets in excess of $15,000 will be
added to the Base Income. Excluded are home, car, farm (if it is applicant’s
residence), and retirement accounts (such as IRAs, pensions, etc.). Only one
home/residence will be excluded, but the applicant is not required to live in the
home/residence. Loss and/or gain on includable assets will be applied to income
and must be reported by the applicant.
7. Calculation of Annual Benefit: The annual benefit will be based on a 15-year
amortization schedule of the covered debt and will assume a reasonable rate of
interest determined by UST-LRAP. This amount will be reduced by the
applicant’s contribution and subject to the cap, which is calculated from the
applicant’s adjusted income.
Examples
a. The applicant is eligible and has qualifying employment. The applicant’s
covered debt is $30,000, and adjusted income is $25,000. The assumed
interest rate is 6%. The applicant’s deemed annual loan payment is
$3,037.88 (assuming 15-year amortization at 6%). The applicant’s
contribution is 0. The cap at the applicant’s level of adjusted income is
$6,000. Therefore, the loan repayment assistance is $3,037.88. The
benefits will be paid in four quarterly installments, and the applicant will
be issued a promissory note requiring repayment of these amounts unless
the applicant continues in the qualifying employment.
b. Same facts as example “a” above, except that the applicant’s adjusted
income is $37,000. The applicant is expected to make a contribution of
$2,000 toward the annual liability on the covered debt. The cap is $4,000.
Therefore, the loan repayment assistance is $1,037.88 ($3,037.88 -
$2,000.00 = $1, 37.88).
c. Same facts as example “a” above, except that the applicant’s adjusted
income is $47,000. The required applicant’s contribution would now be
$4,000. This exceeds the annual obligation on the covered debt, and the
applicant receives no loan repayment assistance.
d. The applicant is eligible and has covered debt of $66,000. The applicant’s
adjusted income is $27,000. The assumed interest rate is 6%. The
applicant’s deemed annual loan payment is $6,683.35 (assuming 15-year
amortization at 6%). The applicant’s contribution is 0. The cap is $6,000.
Therefore, the loan repayment assistance is $6,000.
e. Same facts as example “d” above, except that the applicant’s adjusted
income is $37,000. The applicant’s contribution is $2,000 and the cap is
$4,000. Therefore, the loan repayment assistance is $4,000 ($6,683.35 -
$2,000 = $4,683.25, but subject to a cap of $4,000).
f. Same facts as example “d” above, except that the applicant has $27,000 in
a bank CD. Of this amount, $3,000 (25% of $12,000, which is the amount
by which $27,000 exceeds $15,000) is added to base income. This