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Loan Assistance

Awards

Awards for the HBS Social Enterprise Loan Repayment Assistance Program are determined based on an applicant's earnings and need-based debt, as well as qualifications and job fit.

The annual program cycle covers January 1 – December 31 following the application deadline, and the committee will assess a candidate's eligibility within that specific year-long period, based on the information provided within the application. Awards will be pro-rated for the length of eligible employment within the program cycle.

Eligibility and selection are determined by a Selection Committee and awards are distributed on a funds-available basis. Award amounts are determined annually as a percentage of the following formula based on the applicant's earnings and need-based debt, as well as overall program demand and fund availability:

If applicant's adjusted income is: Applicant may be:
< $110,000 Potentially eligible for coverage of the full amount of their need-based debt up to $10,000 per year.
Between $110,000 and $120,000 Expected to contribute a minimum of 20% of income above $110,000
> $120,000 Expected to contribute $2,000 plus a minimum of 35% of income above $120,000

The annual award percentage calculation is based on overall program demand and fund availability. As a point of reference, qualifying applicants in recent program cycles received 86% - 100% of their net eligibility. The specific award percentage for a given year will be determined following Committee review of all applications submitted in the October round of applications.

We are aware that Direct Loan borrowers may request a refund on payments processed from March 13, 2020, through at least May 1, 2022. Please be aware that your LRAP funds are for the sole purpose of refinancing part of your HBS educational loan debt and may not be diverted to other loans or used for any other purpose. Even if you are in forbearance and/or your interest rate is 0%, you are still required to apply your full LRAP award toward your loan balance. If you accept a refund from your loan servicer of payments made while your loan payments were paused, it will be considered taxable income and could impair your eligibility for LRAP in the future.

Tax Treatment

For graduates working in the nonprofit or public sector: The Program is intended to provide loan assistance awards that are potentially excluded from the recipient's income under Section 108(f) of the Internal Revenue Code. Under current guidance from the IRS, in order for the award to be excluded, the recipient is required to work:

  • In occupations with unmet needs or in areas with unmet needs, and
  • For or under the direction of a governmental unit or a Section 501(c)(3) nonprofit organization.

Additional information can be found in Section 5 of IRS Publication 970 (pdf). If you have additional questions, you are advised to consult with a financial advisor regarding the tax consequences for loan assistance awards.

For graduates working in for-profit social enterprises: Awards will be taxed.