How Your Summer Income Affects Your Student Contribution

1. How Your Summer Income Affects Your Student Contribution

2. Things to Remember… • 8 week minimum full time work requirement (volunteer or non-law work meets requirement) • A student contribution will be imputed if you choose not to work (2L max. - $6,080, 3L max. - $11,680) • We count up to 12 weeks of income (the 12 highest-income weeks) • Money earned after 12 weeks is all yours Students who work less than 8 weeks will be penalized for each week not worked (Law Review and medical exceptions)

3. Other Considerations We may allow some additional summer expenses against your summer income with documentation submitted at Update • City tax (if deducted on paystub) • Car rental cost (reasonable amount) for cities without public transport • Unexpected medical expenses for necessary (not elective) care

4. Other Considerations, Pt 2 • Summer rent: We do not make allowances for against income for two rent payments • If you cannot sublet your apartment for the summer, you will be responsible for both rent payments • HRES renters need to pay close attention to the subletting rules • Budgets cannot be adjusted for moving to another city, wardrobe or food expenses

5. Taxes • Tax is typically withheld at annual rate • Ask your employer to adjust for part-year • More info on our web site at: http://www.law.harvard.edu/current/sfs/policy/scincome.html#CalculatingEstimatedTaxes

6. Worksheet for Single Student Contribution Total Summer Gross Earnings (highest 12 weeks) $________ Less Estimated Federal Tax (owed, not withheld) $________ Less Estimated State Tax (owed, not withheld) $________ Less FICA (7.65% of Gross Earnings) $________ Less $7,200 HLS Summer Living Allowance - $________ Equals Earnings minus Allowances = $________ Times 90% $________ ----------------- Equals Estimated contribution from Income = $________ Plus 33% of Assets + $________ ----------------- Equals Total estimated student contribution $________

7. Example 1Single Student working in Small Private Firm Gross Income $18,000 Budget $70,100 Federal $ 1,423 Stud. Cont. $ 6,550 State Tax $ 720 Par. Cont. - $10,000 FICA $ 1,377 Need = $53,550 Living Allowance - $ 7,200Base Loan - $38,600 Available income = $ 7,280 Grant = $14,950 x 90% ----------- = $ 6,550 Student contribution = $6,550 + 33% of assets

8. Gross Income $ 5,000 Budget $70,100 Federal Tax $ 0 Stud. Cont $ 0 State Tax $ 0 Par. Cont. - $10,000 FICA $ 0 Need = $60,100 Living Allowance $ 7,200Base Loan $38,600 Available income = $ 0 Grant $21,500 Student contribution = $0 + 33% of assets Example 2Single Student working in Public Interest Job

9. Example 3Single Student Working in Large Firm Gross Income $36,000 Budget $70,100 Federal Tax $ 4,128 Stud. Cont. $18,430 State Tax $ 1,440 Par. Cont. - $10,000 FICA $ 2,754 Need = $41,670 Living Allowance - $ 7,200Base Loan - $38,600 Available income = $20,478 Grant = $ 3,070 x 90% ----------- = $18,430 Student Contribution = $18,430 + 33% of assets

10. Example 4Single Student Public Interest, high PC Gross Income $ 5,000 Budget $70,100 Federal Tax $ 0 Stud. Cont. $ 0 State Tax $ 0 Par. Cont. - $35,000 FICA $ 0 Need = $35,100 Living Allowance - $ 7,200Base loan - $38,600 Available income $ 0 Grant = $ 0 Student Contribution = $0 + 33% of assets

11. Married Student Considerations • A student who is married to a full-time student is considered “single” for financial aid purposes. • Unless caring for dependents, spouses of students are assumed to be employed while you attend law school. If your spouse is not employed, you will be treated as a single student, and half of the reported joint assets will be used in determining the asset contribution.

12. Married Student Example 1Large Firm job, Non-working Spouse with 1 Dependent Gross Income $36,000 Budget $77,024 Federal Tax $ 2,855 Stud. Cont. $ 0 State Tax $ 1,440 Par. Cont. - $10,000 FICA $ 2,754 Need = $67,024 Living Allow $ 7,200 Base Loan - $38,600 Sp + Child LA $21,600 Grant = $28,424 UHS & BCBS -$ 6,528 = $- 6,924 “Dependent Care Allowance” added to standard budget • SC = $0 + 33% of assets • Add’l UHS & BC/BS coverage for family included • Add’l car allowance avail if spouse works &/or dep child(ren) • Grants are capped at tuition rate for academic year

13. Married Student Example 2SPIF job, Non-working Spouse with 1 Dependent Gross Income $ 5,000 Budget $101,087 Federal Tax $ 0 Stud. Cont. $ 0 State Tax $ 200 Par, Cont. - $10,000 FICA $ 383 Need = $91,087 Living Allow $ 7,200 Base Loan - $38,600 Sp + Child LA $21,600 = $52,487 BC/BS Fam - $ 6,528Grant Cap - $45,450 = $-30,987 DCA HLS Sub. Loan = $7,037 • Student contribution = $0 + 33% of assets • Add’l UHS & BC/BS coverage for family included • Add’l car allowance avail if spouse works &/or dep child(ren) • Grants capped at tuition rate for academic year

14. Married Student Example 3SPIF job, Spouse earns $47k/yr, no dependents Gross Income $52,000 Budget $70,100 Federal Tax $ 5,255 Stud. Cont. $ 1,250 State Tax $ 2,080 Par, Cont. - $10,000 FICA $ 3,979 Need = $58,850 Living Allow $ 7,200 Base Loan - $38,600 Sp Living Allow $14,400 HLS Grant = $20,250 Sp Add’l Allow $17,700 UHS & BC/BS - $ 0 Available Inc = $ 1,386 x 90%= $ 1,250 • Student/spouse cont = $1,250 + 33% of 1/2 of joint assets • “Spouse Add’l Allow” = car/commuting ($3,300) + “working spouse allowance” ($14,400) • Spouse UHS & BC/BS coverage not included but available

15. Your Student Contribution and LIPP-eligible borrowing Borrowing to replace your PC is all LIPP-eligible- BUT Borrowing to replace your SC is not LIPP-eligible • You can find your annual LIPP-eligible borrowing limit online at “MyHLS Financial Aid” • If you have questions about LIPP eligibility, contact the LIPP staff in Student Financial services at: (lipp@law.harvard.edu) Visit www.law.harvard.edu/current/sfs/lipp/

16. Thank You For Attending!