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TJAGC Student Loan Repayment Program (JA-SLRP). Maj Christine Lamont Maj Darrel Johnson AF/JAX 26 May 2010. Air Force JAG Corps. W i s d o m - V a l o r - J u s t i c e. 1. Overview. JA-SLRP Overview Who is eligible? What loans are eligible? When do you apply? Collateral issues - PowerPoint PPT Presentation
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TJAGC Student LoanRepayment Program
(JA-SLRP)
Maj Christine LamontMaj Darrel Johnson
AF/JAX 26 May 2010
W i s d o m - V a l o r - J u s t i c e
Air Force JAG Corps
1
W i s d o m - V a l o r - J u s t i c e 2
Overview
JA-SLRP Overview
Who is eligible?
What loans are eligible?
When do you apply?
Collateral issues
Tax issues
How to calculate your JA-SLRP payment
Should I apply for JA-SLRP?
W i s d o m - V a l o r - J u s t i c e 3
JA-SLRP Overview
Governing statute: 10 U.S.C. § 2171
Maximum total payments: $65,000
Payments divided over 3 years Payments made at end of 1st, 2nd, and 3rd years in TJAGC Maximum payment at end of 1st and 2nd year: $21,666.67 Maximum payment at end of 3rd year: $21,666.66
“Maximum” because there is a cap on the amount that can be paid each year, IAW 10 U.S.C. § 2171
Payments made directly to the lender
No additional active duty service commitment (ADSC)
W i s d o m - V a l o r - J u s t i c e 4
Who Is Eligible?
JA-SLRP starts with JASOC Class 2010-A (Oct-Dec 09)
Under which program did you access? Eligible
Direct Appointment Program (DAP) ROTC Graduate ELP Intraservice transfer Interservice transfer
Ineligible FLEP Interservice transfer (served as JAG prior to transfer) Previously separated/transferred from AD TJAGC
W i s d o m - V a l o r - J u s t i c e 5
Who Is Eligible?
Eligibility is determined at the end of a judge advocate’s 1st, 2nd, and 3rd completed years of service in TJAGC
Additional Eligibility Criteria Active duty AF officer; Qualified, designated, and serving as a judge advocate IAW 10
USC § § 801 and 8067; Serving in your initial AF JAG Corps ADSC of at least 4 years; Not eligible for JACP during the past year; Have a qualifying loan; and Maintained the highest levels of ethical, professional, personal
conduct, and legal proficiency
W i s d o m - V a l o r - J u s t i c e 6
What Loans Are Eligible?
10 U.S.C. § 2171 only authorizes the AF to repay on certain types of educational loans
Includes federal, state, and private loans Includes Federal Direct Loan Program, Federal Family
Education Loan Program, Perkins Loan Program Includes those loans incurred for educational purposes, which
were made by a lender that meets several requirements outlined in 10 U.S.C. § 2171 and paragraph 4.1.4 of Policy Memorandum implementing JA-SLRP
Loans must be in “good standing” as defined by lender Only loans in existence prior to EAD/DAS/effective transfer Consolidated loans and multiple loans
W i s d o m - V a l o r - J u s t i c e 7
When Do You Apply?
Eligibility window is determined by your accession program DAPs and ROTC Graduates: EAD ELPs: DAS at first judge advocate assignment Intraservice/Interservice: Effective transfer date
Window begins day after the anniversary date described above and extends for 90 calendar days
Same window for 2nd and 3rd year applications
Must apply during eligibility window or you will be ineligible for that completed year and subsequent year payments
Declining to apply results in permanent JA-SLRP ineligibility
W i s d o m - V a l o r - J u s t i c e 8
Collateral Issues
Monthly Payments and Interest You must continue to make monthly loan payments if required
by your lender Interest on your student loan will continue to accumulate IAW
the agreement with your lender
Post 9/11 GI Bill For each completed year of service you accept a JA-SLRP
payment that year will not apply towards the qualifying active duty service required for this program
Ex: Take all 3 JA-SLRP payments, then the first qualifying year for the Post 9/11 GI Bill is your 4th year
W i s d o m - V a l o r - J u s t i c e 9
Tax Issues
Federal Tax withholdings SLRP payments are considered “supplemental wages” under
the federal tax code Employers are required to withhold federal tax on
supplemental wages
Payments are taxable DFAS will withhold 28% and send you a W-2 or 1099-MISC DFAS will not withhold state taxes Sole responsibility of judge advocate to report JA-SLRP
payments as income and pay applicable taxes
W i s d o m - V a l o r - J u s t i c e 10
Calculating JA-SLRP Payments
Program Maximum Total Payments: $65,000 1st and 2nd Year Maximum: $21,666.67 3rd Year Maximum: $21,666.66
Statutory Maximum 33 1/3% of loans remaining unpaid principal or $1,500,
whichever is greater Payment cannot exceed the remaining unpaid principal Each year lender must verify the remaining unpaid principal
Judge advocate will be paid the Program Maximum, unless it exceeds the Statutory Maximum
W i s d o m - V a l o r - J u s t i c e 11
Example – Year 1
Lender verified remaining unpaid principal: $90,000.00
Program Maximum: $21,666.67
Statutory Maximum: $30,000.00
W i s d o m - V a l o r - J u s t i c e 12
Example – Year 1
Lender verified remaining unpaid principal: $90,000.00
Program Maximum: $21,666.67
Statutory Maximum: $30,000.00
Payment to Lender: $15,600.00
Federal Income Tax Withholding: $6,066.67
W i s d o m - V a l o r - J u s t i c e 13
Example – Year 2
Lender verified remaining unpaid principal: $74,400.00 $90,000.00 minus Year 1 payment of $15,600.00 Does not include Year 1 tax withholding, so need to subtract
$6,066.67 from the Year 2 lender verified remaining unpaid principal before calculating Year 2 Statutory Maximum
Adjusted lender verified remaining unpaid principal: $68,333.33
Program Maximum: $21,666.67
Statutory Maximum: $22,777.77
W i s d o m - V a l o r - J u s t i c e 14
Example – Year 2
Lender verified remaining unpaid principal: $74,400.00 $90,000.00 minus Year 1 payment of $15,600.00 Does not include Year 1 tax withholding, so need to subtract
$6,066.67 from the Year 2 lender verified remaining unpaid principal before calculating Year 2 Statutory Maximum
Adjusted lender verified remaining unpaid principal: $68,333.33
Program Maximum: $21,666.67
Statutory Maximum: $22,777.77
Payment to Lender: $15,600.00
Federal Income Tax Withholding: $6,066.67
W i s d o m - V a l o r - J u s t i c e 15
Example – Year 3
Lender verified remaining unpaid principal: $58,800.00 $90,000.00 minus Year 1 & 2 lender payments of $31,200.00 Does not include Year 1 & 2 tax withholdings, so need to
subtract both from the Year 3 lender verified remaining unpaid principal before calculating Year 3 Statutory Maximum
Adjusted lender verified remaining unpaid principal: $46,666.66
Program Maximum: $21,666.66
Statutory Maximum: $15,555.55
W i s d o m - V a l o r - J u s t i c e 16
Example – Year 3
Lender verified remaining unpaid principal: $58,800.00 $90,000.00 minus Year 1 & 2 lender payments of $31,200.00 Does not include Year 1 & 2 tax withholdings, so need to
subtract both from the Year 3 lender verified remaining unpaid principal before calculating Year 3 Statutory Maximum
Adjusted lender verified remaining unpaid principal: $46,666.66
Program Maximum: $21,666.66
Statutory Maximum: $15,555.55
Payment to Lender: $11,200.00
Federal Income Tax Withholding: $4,355.55
W i s d o m - V a l o r - J u s t i c e 17
JA-SLRP Payment Summary
Total JA-SLRP Payments: $58,888.89
Year 1: $21,666.67
Year 2: $21,666.67
Year 3: $15,555.55
Total Received by Lender: $42,400.00
Year 1: $15,600.00
Year 2: $15,600.00
Year 3: $11,200.00
After JA-SLRP, remaining unpaid principal on student loan:
$47,600.00
W i s d o m - V a l o r - J u s t i c e 18
Should I Apply for JA-SLRP?
Number 1 Reason to Hesitate:
CCRAA and your Federal Direct Loans
Public Service Loan Forgiveness Program Created in CCRAA and applies to Federal Direct Loans Repayment Programs: Income-Based Repayment (IBR) Plan
or Income-Contingent Repayment (ICR) Plan Must work in the public service sector for 120 monthly
payments Remaining principal and interest forgiven
HESITATE
W i s d o m - V a l o r - J u s t i c e 19
Should I Apply for JA-SLRP?
Your goal with Public Service Loan Forgiveness Program:(1) Keep monthly payments as low as possible
(2) Maximize the amount forgiven after 120 payments
JA-SLRP can do the exact OPPOSITE(1) JA-SLRP is income, so monthly payments, which are based on your income, will rise
(2) Paying off principal will minimize amount forgiven
W i s d o m - V a l o r - J u s t i c e 20
Should I Apply for JA-SLRP?
IBR monthly repayment calculator: http://www.finaid.org/calculators/ibr.phtml
ICR monthly repayment calculator: http://www.finaid.org/calculators/icr.phtml
Equal Justice Resource Center: http://www.equaljusticeworks.org
W i s d o m - V a l o r - J u s t i c e 21
Summary
Closely review the implementing Policy Memorandum
JA-SLRP System will launch on FLITE on 1 July 2010
When your eligibility window opens, contact JAX with any questions