Loan Forgiveness

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. To view the recent virtual discussion on the Loan Forgiveness program, please click here (Note: You will need your Net ID/password to view. Please contact yalesomalumni@yale.edu for assistance).

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.
  • Alumni of the Yale School of Management programs are eligible if they meet the relevant requirements in respect to type of employment, income, and eligible education loans.
  • Alumni may apply at any time during the first 10 years following graduation. International students are also eligible for the loan forgiveness program.

The program has evolved over time. Please refer to your program and class year to see the terms that are relevant to you:

 

MBA Classes of 2008 – 2011

MBA students entering up to Fall 2009
 

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 MAM, EMBA MMS-SR and MBA alumni who entered in 2007 through 2018, 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.

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.

The full support cap is set at $85,300 for FY21. These levels are effective for January 1-December 31, 2021 only.

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

Loan Eligibility

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.

Support calculator for Classes up to 2011


 

MBA Classes of 2012 – 16

MBA studentS entering Fall 2010 through 2014
 

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 MAM, EMBA and MBA 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

Annual Program Coverage

Up to $85,300 USD equivalent

Program covers 100% of payment on eligible loans

$85,300 – $137,000

Support is pro-rated

$137,000 +

Ineligible for support

 
 
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

Loan Eligibility

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

  1. tuition + mandatory fees for the academic year (or) 
  2. the cost of attendance for a single student,
    minus the FAFSA-determined expected family contribution (EFC), 
    minus any scholarship or grant

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.

International students should contact the Office of Financial Aid for information about loan eligibility. 

Support calculator for Classes 2012-16


 

MBA Class of 2017 – 20 and MAM Class of 2016 – 19

Students entering in Fall 2015 through 2018
 

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 MAM, EMBA and MBA 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.

The full-support income level is adjusted periodically to reflect cost-of-living changes and the maximum income level is adjusted annually based on the average salary of the prior May's graduating class.

Income

Program Coverage

Up to $85,300 USD equivalent

Program covers 100% of payment on eligible loans up to $10,100 per year in support.

$85,300 – $137,000

Support is pro-rated

$137,000 +

Ineligible for support

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

Loan Eligibility

The maximum eligible loans for the academic year are determined as:

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 annually.

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.

Support calculator for Classes Entering in 2015


 

All MMS-GBS Graduates
 

Eligibility

 
Employment Eligibility

MMS graduates must be employed by a government organization or nonprofit 501(c)(3) or 501(c)(4) tax-exempt organization in the United States, or the equivalent abroad. Any non-US currencies will be converted into US dollars using with World Bank’s Purchasing Power Parity (PPP) conversion rates.

Graduates are eligible to use leave provisions offered by their eligible employers.

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 (or equivalent).

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.

ANNUAL Income

ANNUAL Program Coverage

Up to $64,000 USD equivalent

1/10  of eligible loan principal

$64,000 – $75,000 USD equivalent

Support is pro-rated

$75,000 +

Ineligible for support

For all MMS students, Purchasing Power Parity conversion rates will be applied for non-US salaries. Income support levels are subject to periodic change.

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

Loan Eligibility
 

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

  • The maximum eligible loans for tuition and fees
  • minus the FAFSA-determined expected family contribution (EFC), 
  • minus any scholarship or grant

Repayment will not include any interest on these loans. Alumni will be reimbursed for loan principal at a rate of 1/10 annually. Loans taken for living expenses or anything other than tuition will not be included.

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.

Support calculator for GBS alumni


 

MBA Class of 2021 and MAM & MMS-SR Class of 2020 Onwards

Students entering Fall 2019 onwards
 

Eligibility

 
Employment Eligibility

Graduates must be employed by a government organization or nonprofit 501(c)(3) or 501(c)(4) tax-exempt organization in the United States, or the equivalent abroad. Any non-US currencies will be converted into US dollars using with World Bank’s Purchasing Power Parity (PPP) conversion rates.

Alumni graduates are eligible to use leave provisions offered by their eligible employers.

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.

These income levels are subject to periodic adjustment.

ANNUAL Income
MBA / EMBA / MAM/MMS-SR

ANNUAL PROGRAM Coverage

Up to $85,000 USD equivalent

1/10 of eligible loan principal annually

$85,000 – $102,000 USD equivalent

Support is pro-rated

$102,000 +

Ineligible for support

Purchasing Power Parity conversion rates will be applied for non-US salaries.

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

Loan Eligibility

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

  • The maximum eligible loans for tuition and fees
  • minus the FAFSA-determined expected family contribution (EFC), 
  • minus any scholarship or grant
  •  
  • Repayment will not include any interest on these loans. Alumni will be reimbursed for loan principal at a rate of 1/10 annually. Loans taken for living expenses or anything other than tuition will not be included.

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.

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.

Support calculator for Classes entering in 2019 (non-GBS)


 

Notes on all Programs
 

Coronavirus and Forbearance: Federal Loan Borrowers

As of March 20, 2020, Federal Student Aid is providing the following relief on ED-held federal student loans:

·         loan payments suspended (but still accepted)

·         no collections on defaulted loans

·         set interest rates to 0% for loans in repayment status until December 31, 2020.

Current loan forgiveness participants saw all interest payments deducted from their July awards, and this will continue for an additional 3 months in 2021 (to match the 9 months of interest-free respite received). Interest will be added back to the remaining 3 months of the January - June 2021 award. Despite your loans being in ‘disaster forbearance’, you will receive awards that you must use toward repaying your current student loans.

New participants in loan forgiveness will see their loans enter disaster forbearance immediately after their 6-month grace periods, and will still be eligible to receive loan forgiveness. The School expects you to use your award to pay down the principal on your SOM student loans during this time. Most alumni entering loan forgiveness for the first time aren’t eligible for loan interest payments (students who started at SOM in 2019+), and their LFP awards will be unaffected.

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 proof of loan payments made 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: May 2020
  • First Eligible Application Date: November 2020
  • Last Month of Eligibility: November 2030

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.

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 yalesomalumni@yale.edu. For all other questions please contact the Office of Financial Aid Directly at somfinancialaid@yale.edu

Change of Circumstances

If you have a change of circumstances, please let us know within 30 days. We will request a response 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 within 30 days may result in immediate dismissal from the loan forgiveness program.

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 the award is considered non-taxable. This also includes non-profit-equivalent companies abroad, as IRS regulations around taxability cover only 501©3 status.

  • 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.

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.