Exit Interview. Student Loans. An investment in your future

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1 Exit Interview Student Loans An investment in your future

2 Why am I here? Exit interview is intended to help reduce student loan defaults Be aware of rights and responsibilities Exit interview is a Federal Requirement which must be completed

3 Stafford Student Loan Players School Lender Guarantee Agency Servicer Secondary Market Credit Agencies

4 Stafford School Loan Players LENDER funds the loan (Bank) Guarantee Agency Insures the loan against default (TSAC, ECMC, etc) Servicer received payment and maintain the loan on behalf of the lender Secondary Market purchases loan from lender

5 Types of FFELP/Direct Loans Borrowed Stafford Loans 2 types for students Subsidized Government pays the interest while in school at least half time Unsubsidized Borrower responsible for the interest after disbursement $50 minimum monthly payment 6 month grace period Up to 25 years repayment based on loan balance and when loan was made

6 Making Payments More Manageable Standard Repayment Account Principal and interest payments each month Lowest total cost Standard repayment is 10 years Graduated Repayment Plans Reduced payments in the early years Standard 10 year repayment term Initial interest-only payments can be up to 40% lower Higher interest cost over the life of the loan

7 Making Payments More Manageable Income Sensitive Repayment Payments are a percentage of your monthly gross income You ll need to reapply each year; five year maximum Higher interest cost over the life of the loan Extended Repayment New Borrowers on or after 10/7/98 with balance greater than $30,000 are eligible Repayment can extend to 25 years

8 Making Payments More Manageable Loan Consolidation Combines eligible loans into a single new loan Longer repayment term (up to 30 years) Fixed interest rate determined by weighted average of loans Highest total cost

9 Is Consolidation Right for You? Do you have multiple loans with lenders? Are you in your repayment period or your grace period preceding repayment on your student loans? Is your outstanding balance, including all types of student loans, $7,500 or more? Are your loan payments more than you can currently afford?

10 Your loans have been sold to the Department of Education and possibly have different servicers. You can CONSOLIDATE your FFELP Stafford Loans and Direct Stafford Loans so that you would have one payment.

11 What If I Can t Pay???? Deferment Postpones loan repayment for specified period of time Application is required/must provide all required documentation to establish eligibility You must continue to make scheduled payments until deferment is granted Forbearance For borrowers in temporary financial difficulty Suspends payments or enables smaller payments under certain circumstances defined periods of time Generally granted at discretion of lender up to 12 months at a time.

12 Stafford Deferments Unlimited length for in-school, graduate fellowship and rehabilitation training Unemployment up to 3 years Economic hardship up to 3 years

13 Deferment and Forbearance During Both Deferment and Forbearance Periods: Interest continues to accrue on your unsubsidized loans Accrued interest will be added to the amount you owe (capitalized) if you do not pay. For subsidized Stafford loans, the federal government pays interest while the loan is deferred. Interest accrues during forbearance on ALL loans.

14 Repayment Incentives Automatic Payment Deductions No Prepayment Penalties

15 Taxpayer Relief Act of 1997 Potential education loan interest deduction (up to $2500) if income less than $40K ($60K married) Lifetime Learning Credit allows for tax credits up to $1,000 annually Contact a tax advisor to determine your personal eligibility

16 In the past two years many changes have and are being made due to changes in the loan industry. Lenders began selling loans to the Department of Education in order to be able to continue lending to students. Department of Education selected servicers to handle students loans Names of the servicers and phone number are in the back of the packet that was sent to you.

17 Have you received Notices that your loan(s) have been SOLD to the Department of Education? Notices from Servicers whom the Department sold your loan to could be: ACS Great Lakes PHEA Sallie Mae Nelnet Direct Loan Servicing Center

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19 Contact information Student Loan Servicing Center (ACS) Phone Number for Borrower Web. Borrowers can submit questions through the Contact Link on the servicers website.

20 Beginning, July 1, 2010, it became mandatory for all U.S. colleges to go to Direct Lending. Lenders were no longer an option for students Exception in choosing a lender: Alternative/Private Loans

21 BCHS began to use Direct Lending in Summer 2010 for some students All BCHS students were required to use Direct Lending beginning Fall 2010 You will have two loans Stafford Loans (through Lender) and Direct Loans if received loans Summer and/or Fall 2010.

22 Don t Jeopardize Your Future What is Delinquency? A loan is considered delinquent if a payment has not been received the day after the payment due date Why Avoid Delinquency? Your late payments will be reported to a credit bureau Delinquency will become part of your financial history

23 DEFAULT: THE D WORD Default occurs at 270 days of delinquency Reported to Credit Bureaus Income tax refunds and other Federal payment withheld Lottery winnings withheld Wages can be garnished Professional license may not be renewed Not eligible for future federal financial aid Not eligible for Federal Benefits Responsible for all collection costs Your day in court

24 Repaying Your Loan Talk To Your Servicer if: You have questions You move or change names You transfer to another school You cannot make your payment You want to apply for a deferment or forbearance

25 Repaying Your Loan Helpful Hints Open, read, and respond to all correspondence sent from your school and lender Keep copies of loan information in one place Check and credit report annually Visit lender/servicer website for deferment or forbearance forms

26 Credit Reports Your student loans became a part of your credit report with the first student loan you took out. Credit report states NOT IN REPAYMENT until you graduate Is an excellent beginning to building a credit report ALWAYS Ensure the information on your credit report is correct it s your responsibility Monitor your report throughout the year Prevent identity theft

27 Who uses CRA services? (Credit Report Agency) Auto dealers Credit card companies Landlords/Mortgage professionals Banks/credit unions Utility companies Service Providers (cell phone, cable, etc) Potential Employers Insurance companies

28 Free credit report service Ordering your credit report Free from three CRAs to consumers annually - request more often if denied credit or employment -available by automated phone system or online if matching address

29 Major Credit Reporting Agencies Trans Union Equifax Experian (formally TRW)

30 LOAN PAYBACK Nursing Only Work for Baptist Payback on Federal Stafford Loans including PLUS loans $250 a month up to 3 years or $9,000 NO COMMITMENT

31 TUITION DEFERRAL BMH GRANT Contacting each student on the program Commitment Mandatory Exit Interview with Sherita Martin Date, time and room will be sent out at a later date. Sherita Martin

32 PACKET with information regarding your student loans was sent to you Website address to complete Exit Interview

33 CLOSE TO THE END LOGON TO COMPUTER www/mappingyourfuture.org Site Menu Student Loan Counseling Stafford Exit

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38 GOOD LUCK in all your Future Endeavors! From the Financial Aid Staff at Baptist College of Health Sciences