Interest Freedom Plan

New Initiative to Reduce Student Loan Debt

Northwestern Pritzker School of Law established the Interest Freedom Plan (IFP) to assist members of the most recent graduating classes who earn less than $90,000 per year with their student loan interest payments. Program participants should accrue very little or no interest on their loans during their years of participation. Therefore, their loans should not increase substantially in the years they receive IFP payments.

The program is designed to help those who pursue positions in the private sector as well as graduates who are unemployed in spite of extended job searches. If employed, the graduate must be working in a position that requires passage of the bar exam or that falls within the ABA’s definition of a “JD Advantage” job – one where the employer sought an individual with a JD, and perhaps even required a JD, or for which the JD provided a demonstrable advantage in obtaining or performing the job, but itself does not require bar passage or an active law license or involve practicing law.

Awards are calculated using the prevailing Grad Plus loan interest rate – presently 6.31%. For illustrative purposes, a $100,000 loan on a 10-year repayment plan at 6.31% interest equates to an annual benefit of $6,098 during the first year of participation and $5,617 in year 2. A $150,000 loan generates an annual benefit of $9,147 in year 1 and $8,425 in year 2.

The program launched in 2015 for Juris Doctor graduates from the class of 2015 through the class of 2018. In 2016, the program was expanded to include graduates through the class of 2020. It is open to those who earn less than $90,000 annually (raised from $85,000), including graduates who have yet to secure their first jobs. Participation in the program is limited to two consecutive years immediately following graduation (previously the program was limited to one year); applicants should apply in the year they graduate for participation the following year. Graduates employed as judicial clerks in state trial and intermediate appellate courts are eligible to participate, but the program does not apply to those employed in judicial clerkships in the federal courts or the highest court of any state.

To participate, graduates must provide proof of employment and repayment status in the form of documents such as an offer letter, tax returns, or proof of loan repayment status and meet with and supply the required information to their career advisor as specified on the IFP application. All communication concerning the program will be directed to the participant’s Northwestern Law email account.

Funds will be awarded in two allotments, the first half in January 2017, and the second half—assuming continued eligibility—in June 2017. To remain eligible, graduates who are not employed full-time must meet with their career advisor, either in person or over the phone, and actively pursue employment. Program participants should note that their awards may be subject to taxes and that they are advised to consult a tax professional concerning their individual circumstances.