Vicky L. Cagle Director of Student Financial Services Vanderbilt University School of Medicine. November 2, 2012

Transcription

1 Vicky L. Cagle Director of Student Financial Services Vanderbilt University School of Medicine November 2, 2012

2 q What type of loans do you have? q What are grace, deferment and forbearance? q What repayment plans are available? q Should you consolidate? q Can your loans be discharged or canceled? q Whom do you pay? q What loan repayment programs are available? q What is Public Service Loan Forgiveness? 2

3 Federal Loans o Direct Subsidized, Unsubsidized, Grad PLUS, Consolidation o FFELP Subsidized/Unsubsidized Stafford, Grad PLUS, Consolidation o Perkins Private/Alternative o Institutional o Bank 3

4 Period of time immediately after graduation o Automatic o No payment required o Loan specific 6 months for most federal loans 4

5 Period when borrower who meets certain criteria may suspend loan payments o In-School o Economic Hardship o Military o Unemployment o Graduate Fellowship 5

6 Typically sought for temporary repayment relief and provides temporary adjustment of no payments or reduced payments o Adds expense interest accrues and capitalizes. o Can be very useful to help avoid delinquency and default. Mandatory Medical Resident Forbearance 6

7 Standard o Level monthly payments that cover accruing interest and a portion of principal over a 10-year period o Higher monthly payments o Lowest overall cost Graduated o Payments start low, increase over time o Interest-only payments followed by standard principal and interest o Finish in 10 years o Higher overall but good for early cash flow 7

8 Income Sensitive (FFELP loans only) o Payments based on percentage of your monthly income o Payments must be sufficient to cover accruing interest o Finish in 10 years (may be extended to 15 years) Income-Contingent (Direct Loans only) o Payment is based on income o Negative amortization is allowed o Up to 25 years to repay o Balance remaining after 25 years worth of payments can be forgiven o Amount forgiven is taxable 8

9 Extended o Available to borrowers who have accumulated more than $30K in Federal Stafford, PLUS and Consolidation loans first disbursed on or after October 7, 1998 o Repayment can be extended up to 25 years o Allows you to manage monthly cash flow needs, but will increase your cost 9

10 Income-Based Repayment (IBR) o Available to federal loan borrowers experiencing financial hardship. o Borrower qualifies if annual monthly student loan payments exceed 15% of discretionary income. o If eligible for IBR, borrower s monthly payment will be determined by a formula that takes into account household size and adjusted gross income. Increases to income will impact the required monthly payment amount. o Unpaid balance may be forgiven after 25 years of scheduled monthly payments. 10

11 Income-Based Repayment (IBR) cont d o Generally lowest payment o Single resident pays between $400-$500 per month o If married, may want to consider filing separate o Electronic application available at o Calculate estimated payment at 11

12 Convenience of one servicer May lower monthly payment Longer repayment plan - up to 30 years to repay No prepayment penalty May need to consolidate if interested in the Public Service Loan Forgiveness Program Direct Loan Origination Center s Consolidation Dept. o o 12

13 May be discharged if totally and permanently disabled Federal loans are canceled upon death o Do not need life insurance o May need life insurance for private loans Generally cannot discharge in bankruptcy 13

14 National Student Loan Data System o Access with FAFSA pin Itemization of all federal loans Servicer information Contact information 14

15 Nelnet ESA/Edfinancial Great Lakes Educational Loan Svcs. CornerStone Sallie Mae Aspire Resources, Inc FedLoan Servicing (PHEAA) Granite State - GSMR Direct Loan Servicing Center (ACS) MOHELA OSLA Servicing EdManage

16 If you re unable to resolve issue with servicer(s), please contact: Federal Student Aid Ombudsman o U.S. Department of Education FSA Ombudsman or

17 Army Financial Assistance Program o If in accredited residency, may receive up to $45,000 annual grant plus monthly stipend of more than $2,088 o Minimum commitment is length of FAP benefit + one year o Must be a U.S. citizen o The Air Force and Navy have similar programs. Contact a recruiting office for more information. 17

18 Army Reserve o May receive up to $50,000 to repay medical school loans o Commitment is up to 5 years o Must be a U.S. citizen o Armed Forces Loan Repayment Program (LRP) o Up to $65,000 per year, less tax liability o Minimum commitment is 2 years o Must be a U.S. citizen o o Contact a recruiting office for more information 18

19 National Health Service Corps (NHSC) o Years 1 & 2 = $60,000 total Years 3 & 4 up to $40,000 per year o Not taxable o Minimum commitment is 2 years o Must be U.S. citizen o Board certified in Family Medicine, Obstetrics/Gynecology, Pediatrics, Psychiatry, Geriatrics, Internal Medicine o Underserved rural and urban communities in U.S. o 19

20 National Institutes of Health Extramural o Up to $35,000 per year for qualified research o Minimum commitment is 2 years o Must be U.S. citizen o Federal and private loans included o For researchers outside NIH in Clinical, Pediatric, Health Disparities, Contraception & Infertility, and Clinical research for individuals from disadvantaged backgrounds. Must have total qualified education debt equal to or in excess of 20% of your institutional base salary. Must have a health professional doctor degree from an accredited institution. o 20

21 National Institutes of Health Intramural o Up to $35,000 per year for qualified research o Minimum commitment is 2 years; 3 years for general research o Must be U.S. citizen o Federal and private loans included o For NIH employee researchers conducting: AIDS research, clinical research for individuals from disadvantaged backgrounds. Must have total qualified education debt equal to or in excess of 20% of your institutional base salary. Must have a health professional doctor degree from an accredited institution. o 21

22 Faculty Loan Repayment Program o Up to $40,000 o Minimum commitment is 2 years o Must be U.S. citizen o Faculty members from disadvantaged backgrounds o Must receive matching funds from employer o Taxable funding to offset o 22

23 Indian Health Service o Receive up to $20,000 per year o Minimum commitment is 2 years o Must be a U.S. citizen o Federal and private loans may be included o Payments are taxable income o Supports American Indian and Alaska Native communities o 23

24 Other State and Federal o Utilize the AAMC s free searchable database of state and federal loan repayment and forgiveness programs. o 24

25 Eligible Loans o Direct Subsidized Loans o Direct Unsubsidized Loans o Direct Grad PLUS Loans o Direct Consolidation Loans o Special Direct Consolidation Loans Other federal loans eligible if consolidated into a Direct Consolidation Loan, including: o FFEL Subsidized/Unsubsidized Stafford Loans o FFEL Grad PLUS Loans o FFEL Consolidation Loans o Federal Perkins Loans 25

26 Borrower must be employed full time (at least 30 hours per week) in a qualifying public service position. Must have made 120 on-time payments in the Direct Loan program while employed as described above. Upon completion, apply for forgiveness. Remaining balance, principal and interest, is forgiven; (must continue to be employed until forgiveness is granted). Amount forgiven is not taxable. 26

27 Qualifying Work: o Public service organization a private organization providing a public service o 501(c)(3) nonprofit organization (i.e., many medical schools and residency programs) o Federal, state, local or tribal government organization, agency or entity (i.e., county hospitals and clinics, etc.) o Military service 27

28 Qualifying Repayment Plans: (Do not have to be consecutive) o Income-Based Repayment (IBR) generally lowest payment o Income-Contingent Repayment (ICR) o Standard Repayment (or a plan where the payment is not less than the monthly amount required under Standard Repayment) 28

29 There are 6 steps to obtain PSLF. q Step 1 q Step 2 q Step 3 q Step 4 q Step 5 q Step 6 29

30 Step 1: Make ineligible loans eligible by consolidating them into a Direct Consolidation Loan Step 2: Request a qualifying repayment plan from Direct Loans Step 3: Submit completed Employment Certification Form for Public Service Loan Forgiveness annually or whenever you change jobs studentaid.ed.gov/sites/default/files/public-service-employment-certification-form.pdf Step 4: Complete 120 qualifying payments while working in a qualifying position Step 5: Save all supporting documents surrounding the qualifying payments and work Step 6: Upon completion, apply for Public Service Loan Forgiveness 30

31 For more information visit: o Federal Student Aid Public Service Loan Forgiveness website charts/public-service Keep in mind opportunity cost - don t just do it for forgiveness. In many cases you would make more in private practice than amount forgiven. 31

32 Your financial aid office Your servicer(s) Student Financial Services website 32

33 QUESTIONS? Vicky L. Cagle Director of Student Financial Services Vanderbilt University School of Medicine or 33