Loan Forgiveness Program

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 around the country since its establishment.

Alumni of the Yale School of Management programs are eligible if they meet the requirements in respect to type of employment, income, and eligible education loans.

The program has evolved over time, including:

  • MBA Class of 2009: the program 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.
  • MBA Classes of 2012-16: The program supports the repayment of annual need-based loans to a maximum of the total MBA tuition and mandatory fees. 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 Class of 2017/MAM Class of 2016 onwards: A per person, annual award cap of $10,100 will be applied.

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.

Access the LFP Online Application (open November and May) for all new and continuing applicants.
 

Loan Forgiveness Program Details: 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. No less than 85% of an alumnus' salaried income must come from the eligible employer.

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.

Complete the and submit it via the LFP online application.

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 $85,300 Program covers 100% of payment on eligible loans
$85,300-$119,000 Support is pro-rated
$119,000+ Ineligible for support

*These levels are effective for January 1-December 31, 2016 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.  For students entering in Fall 2015, a $10,100 maximum annual award cap will be set.

For more detailed explanation on how income is calculated, see the FAQs on the Loan Forgiveness Online Application.

Loan Eligibility

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

MBA Classes of 2012-16: MBA Class of 2017/MAM Class of 2016 onwards:
a) tuition + mandatory fees for the academic year
          or 
b) the cost of attendance for a single student,
minus the FAFSA-determined expected family contribution (EFC), 
minus any scholarship or grant

a) cost of attendance for a single student

minus the FAFSA-determined expected family contribution (EFC), 
minus any scholarship or grant

  Support capped at a per person maximum of $10,100

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 medical residency or 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.

Post-Graduation Loan Refinancing

As lending markets change, several lenders are now offering refinance/consolidation loans specifically for MBA students. Since these vendors will only refinance your education loans, the resulting loan will also be eligible for loan forgiveness. Participants are encouraged to participate in lower interest rate programs. 

More information can be found on the Post-Graduation Loan Options website.

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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 November 2026

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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.

To determine your estimated award, you can download a sample award calculator. Please be sure to choose the calculator based on your graduation year. 

Household Calculation

We complete the single and married applicant calculations for all married applicants. If your single adjusted income is greater than your married adjusted income, we will use your single adjusted income to determine eligibility.

Married applicant's adjusted income = Applicant's wages + spouse's wages + all other household income/2 - $5000 per child

Support calculator for Classes up to 2011

Support calculator for Classes 2012-16

Support calculator for Class of 2017/MAM 2016

MBA Class of 2017/MAM Class of 2016 Onwards: Annual Award Cap

For students entering programs in Fall 2015, there will be a $10,100, per person annual award cap. This award cap will be adjusted periodically.

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Application and Renewal Procedure

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. 

All applications and renewals must be submitted via the LFP online application. Email communications to participants will also be sent via this tool, and application status will be updated only. In order to use the online system, you will need your NetID and password. If you need assistance with your password, please email kaela.heaslip@yale.edu.

We encourage all participants with a U.S. bank account to sign up for Direct Deposit. This will help to expedite your payment. Expect up to 6 weeks for reimbursement from campus. Graduates will receive their payments in January and July by the 15th of the month if Direct Deposit is authorized in advance.  If a check is mailed, payment is normally received by the 21st of the month.

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Change of Circumstances

If you have a change of circumstances, please let us know within 30 days.  We will request a  that will document your updated situation.  Adjustments will be determined in the two application windows (November and May), and you will be informed of the financial impact based on the effective date of the change.  

Based on the effective date of your change, there may be a retroactive increase or decrease to your funding based on the new information.  

If it is an increase, we will process the increase in your January or July payment.  If it a decrease in funding, we will decrease your next payment by that amount or send you instructions on returning funds.  

Failure to report a change in circumstances will result in immediate dismissal from the loan forgiveness program.

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Tax Treatment

The determination of whether awards are taxable for graduates is based on your employer.   In those positions where graduates are employed by   U.S. nonprofit agencies holding 501(c)3 status other than Yale University (whether in the U.S. or abroad) the award is considered non-taxable. 

Awards for graduates employed by a non-501(c)3 agency are taxable. 

For graduates who are Yale employees (even while working on behalf of third party organizations or federal governmental agency through an IPA agreement) the award is taxable.

Graduates with taxable awards will be issued a 1099-MISC form for the amount of their award annually  for tax purposes.  

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A Note on Post-Graduation Loan Options

As lending markets change, several lenders are now offering refinance/consolidation loans specifically for MBA students. Since these vendors will only refinance your education loans, the resulting loan will also be eligible for loan forgiveness. Participants are encouraged to participate in lower interest rate programs. 

More information can be found on the Post-Graduation Loan Options website.

International students can refinance their Yale International Student Loans with Quorum Federal Credit Union. Quorum Refinance Application Process Steps

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