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2 Federal Loan Exit December 2015 Jess Christensen Assistant Director of Financial Aid

3 Types of Direct Student Loans Subsidized Federal Direct Loan -Government has been paying the interest while in-school at least ½ time Unsubsidized Federal Direct Loan -Government has NOT been paying the interest while you were in school, therefore you are responsible for paying all interest accrued

4 Responsibilities as a Borrower Repay the loan as agreed on the Master Promissory Note you signed before taking out your federal loan Repay the loan whether or not you are satisfied with your education and whether or not you obtain a job in your field

5 Grace Period Payments begin 6 months after your last date of attendance Any unpaid interest will be capitalized at the time of repayment Interest could be from: Any Unsubsidized Federal Direct Loan since you received the loan Grace period on Subsidized Federal Direct Loans received after July 1, 2012 & before July 1, 2014

6 Interest Capitalization Any unpaid interest will be added to your total principal loan amount Increases the total loan amount that you will pay on this loan

7 Prepayment There are no prepayment penalties This means if you are able to pay more on you student loans and can pay them off in a shorter time period the more you will save on interest

8 NSLDS.ed.gov

9 NSLDS (National Student Loan Data System) What is it & why is it important? Lists all of your FEDERAL loans. Lists your current servicer NSLDS requires your FSA ID The FSA ID replaced the 4 digit FAFSA PIN number you would have used in the past An FSA ID can be obtained at It will NOT list Private Loans.

10 What Should I do once I know who my loan servicer is? #1 Set-Up an on-line profile The 4 Major Federal Loan Servicers 1) Fed Loan Servicing 2) Great Lakes 3) Navient (Formerly Sallie Mae) 4) Nelnet

11 Remember Student Loans are just like the Kardashians They will not go away, no matter how much you wish they would!! So It s Important to choose the Repayment plan that works best for YOU!

12 Standard Repayment 10 Years (120 payments) Same payment every month for 10 years Depending on your loan amount the loan term may be shorter than 10 years Minimum monthly payment of $50

13 Extended Repayment Loan Balance Maximum Loan Term Greater than $30,000 Up to 25 years Maximum Loan Term depends on total amount owed

14 Graduated Repayment Payments start out lower and gradually increase Sometimes referred to as a tiered or step repayment Minimum payment must be at least the amount of interest accrued Minimum payment can be no less than 50% of the standard repayment

15 Income-Based Repayment Payment is generally 15% of your discretionary income Discretionary income is the difference between your adjusted gross income and 150% of the poverty line for your family size and state of residence More info at:

16 Pay As You Earn Plan Payment is generally10% of your discretionary income Discretionary income is the difference between your adjusted gross income and 150% of the poverty line for your family size and state of residence More info at:

17 Consolidation Is it right for ME? Federal Direct Loan Consolidation Program This is only for Federal loans Federal Direct Stafford Federal Perkins Loans Students CANNOT consolidate a parents Federal Direct Parent PLUS Loan with their student loans

18 Consolidation- Pros Allows you to put all of your federal loans together to make one payment if you have multiple servicers. Reduce monthly payments This is done by extending how long you will be repaying your loan and increases the overall cost.

19 Consolidation- Cons There is not an interest rate benefit as your federal loans are already at a fixed rate. Taking longer to pay off the loan will increase the overall cost of the loan. If you have Perkins loans you will give up an forgiveness options by consolidating Perkins loans with other federal loans.

20 Where Do I go to Complete a Consolidation?

21 Weighing the Loan Repayment Options???What is Best for YOU??? Lowest Monthly Payment? Lowest Total Cost of Borrowing? Convenience?

22 REPAYMENT SAMPLES Loan Amount $30,000 Interest Rate 6.8% FIXED Standard Repayment 10 years 20 years Monthly Payment $ Monthly Payment $ Total Cost of Loan $41, Total Cost of Loan $54, Total Interest Paid $11, Total Interest Paid $24, Monthly Payment Saving on 20 year Repayment = $ Additional Cost of 20 year Repayment = $13, Repayment calculations from

23 Public Service Loan Forgiveness Only available in the Direct Loan Program Allows forgiveness of remaining debt after 10 years of standard payments or Income Based Repayments Must work in a qualified Public Service Field Generally this will be 503c Non-Profit Employer

24 Teacher Loan Forgiveness Must be employed as a full-time teacher for 5 consecutive academic years in s designated low income Title 1 school district Or you may qualify if you are a highly qualified full-time math, science, or special ed teacher whose primary responsibility was to provide special education to children with disabilities

25 Teacher Loan Forgiveness cont. May be eligible for up $17,500 in loan forgiveness

26 Helpful Sites Reviewing Repayment Options Federal Student Aid Site Finaid.org

27 What if I don t get a bill? It is your responsibility to make sure that your 1 st payment is on time! Open your mail! Even if it is from someone you have never heard of. If you haven t received anything from your lender or servicer within 4-6 weeks before your grace period is about to expire, give them a call. The most frequently missed payment on a student loan is the 1st payment!

28 How can I get out of Federal DEATH Loans? TOTAL AND PERMANENT DISABILITY Federal Student Loans are rarely forgiven through bankruptcy! Humm

29 DEFAULT 270 days or more delinquent on your student loan.

30 What Happens if I Default? You will receive a derogatory credit rating. This will make it difficult to receive other kinds of financing such as loans for a car, home, and other personal financing. You may be assessed collection costs and attorney fees. Your loan will become due in full immediately. You will lose eligibility for future aid if you decide to go back to school. Your Federal and State Tax refunds may be withheld. Your wages may be garnished.

31 Successful loan repayment tips? Watch your mail for correspondence from your lender/servicer and keep them informed of any name, address, or phone number changes. Sign up for auto payments Sign up for e-services offered by your lender so you can track your payments on-line Choose the repayment plan that best fits your needs.

32 I m having trouble making payments What can I do? Call or contact your lender or servicer!!!! They want to help you!

33 Difficult Times What options do you have? Deferment Forbearance

34 Deferment Allows you to postpone payments for a limited period of time, if you meet certain requirements. Examples: In-School, Temporary Total Disability, Unemployment, Economic Hardship

35 Forbearance Temporary Postponement of your student loan payments Discretion of your student loan servicer and can often be done over the phone or on the web

36 Ombudsman Office If you have a discrepancy with your lender/servicer that you cannot resolve by making a reasonable effort to resolve through the normal process of contacting them or the school for assistance you can contact the Ombudsman Office

37 Graduate School Questions

38 Graduate School As long as you are attending an accredited graduate school you can contact your lender for an in-school deferment. Schools should be reporting your enrollment, but don t depend on that. Call your lender to determine if there is any paperwork that you need to complete for them. If you start graduate school during your 6 month grace period you will have you grace period again when you are done with graduate school or drop to less than ½ time status.

39 Graduate School Check with your graduate school to determine the possibility of scholarships or institutional grants they may offer. Make sure you send your graduate school your FAFSA Consider the costs and benefits of graduate school. You may possibly be looking at a majority of your graduate school education being covered by loans if your school does not have institutional grants of scholarships to assist you.

40 CREDIT & BUDGETING

41 Credit One of your best assets is to maintain good credit. Your credit is going to be a determining factor on all your future purchases. The best way to maintain good credit is to make sure that you are making your payments on time. If you are having trouble with payments call your lender, whether it is your student loan, car loan, or a personal payment and let them know your situation and see if you can come up with a resolution.

42 Credit Report Detailed list of your credit history. It has information on all lenders or agencies that have extended credit to you. It will also show what type of credit has been extended to you, how much, and your payment history on that credit.

43 Credit Score Numerical value assigned to you by the credit agencies based on the information contained in your credit report. Can vary from credit agency to credit agency. Used to assess what level of risk an individual would be to that lender. Usually can vary from about The higher the score the lower the risk and the better the interest rates you will receive. It is often called your FICO score

44 How can I get my Credit Report? You can receive 1 free credit report every 12 months. or call FACT-ACT ( )

45 How can I get my Credit Score? You can access this at There is often a fee to obtain your FICO or credit score You will often have the opportunity to pay to receive this when you obtain your free credit reports Some lenders and credit cards are now offering a credit tracker for free as a service to their customers

46 Create a Budget Track how much money you are bringing in and what expenses are coming out. Make sure you are paying yourself as well. Be realistic. If you are paying out more than is coming in make sure that you are adjusting your budget. Be cautious with credit cards!

47 What is your Final Task for Concordia College? Complete the on-line Exit Counseling Session. This will update all of your biographical information and confirm your completion of the required Stafford Loan Exit Counseling.

48 Types of Stafford Loans Subsidized Stafford -Government pays the interest in-school and during repayment Unsubsidized Stafford -Interest has been accruing while you were in school -You are responsible for interest

49 Federal Perkins Loan Exit Counseling Larry Rock Director of Student Loan Repayment (218)

50 Online Exit Counseling Receive an invitation in your college account. Will come from

51 About the Federal Perkins Loan Government loan that must be repaid Your lender is Concordia College 9 month grace period Interest rate = 5% Min. Monthly Payment = $40.00

52 When Do Payments Begin? First Payment Due By: December 2015 Grads: October 18, 2016 May 2016 Grads: February 29, 2017 Aug 2016 Grads: June 12, 2017 No prepayment penalty

53 Benefits Deferments Cancellations Where can I find the forms? Where can I find out if my school is a lowincome school?

54 Deferment Eligibility At least half-time student U.S. Armed Services Unemployment Economic Hardship Forbearance

55 Cancellations Years 1 & 2: 15% cancellation Years 3 & 4: 20% cancellation Year 5: 30% cancellation Entire loan will be paid off in 5 years Must fill out forms in a timely manner Employment, name and address changes must be reported immediately

56 Cancellation & Deferment Eligibility Peace Corps or Action Programs (15%, 15%, 20%, 20%, Total 70%) Head Start Program (15% per year) Teaching Pre-Kindergarten/Child Care (15% per year) Law Enforcement Teaching in Low-Income School Teaching in Math, Science, Foreign Language or other shortage area

57 Continued Teaching Special Education Early Intervention Services Provider or Supervisor of services to High-risk Children Public Defender Librarian Firefighter

58 Continued Speech Language Pathologist Nurse or Medical Technician Military Service (Hazardous Duty Pay) Tribal Faculty Spouse of Victim of 9/11/2001 Death or Total & Permanent Disability

59 University Accounting Service Outside Billing Service: University Accounting Service PO Box 3131 Milwaukee, WI Will be billed each month Tell your parents about UAS Where can I view my account online?

60 UAS continued Checks made payable to Concordia, BUT mailed to University Accounting Service in envelope provided Direct all correspondence, telephone calls, questions, etc. to me at Concordia

61 National Credit Bureau Loan has been reported at time of first disbursement You DO have a credit history and it s very important to you 30 days late, causes detrimental credit history More than 1 or 2 late payments = no credit will be granted Stays on report for 7 years

62 Regulations Required to charge a late fee If payment is late, we add additional $2.80 to monthly bill Required to turn a defaulted account over for outside collection Once this occurs, the loan is no longer negotiable with Concordia. Cannot be discharged in bankruptcy

63 Consolidation

64 Pros of Consolidation One Lender & One Monthly Payment Flexible Repayment Options No Minimum or Maximum Loan Amounts or Fees Varied Deferment Options Reduced Monthly Payment Retention of Subsidy Benefits

65 Cons of Consolidation Forfeit Cancellation Benefits Forfeit Grace Period

66 Most Important Thing

67 Your Responsibilities Complete Online Exit Counseling Notify me of any address/name change Contact me if you can t make your scheduled payment

68 Helpful Websites University Accounting Service Perkins E-statements & On-line Payments National Student Loan Database System

69 Helpful Websites Cont. Direct Consolidation onredirect.action?websource=studentaid Ombudsman

70 Types of Stafford Loans

71 Types of Stafford Loans Thank You! Subsidized Stafford -Government pays the interest in-school and during repayment Unsubsidized Stafford Larry Rock Director of Student Loan Repayment -Interest has been accruing while you were in school -You are responsible for interest (218)