Federal Student Loan Repayment SUFFOLK UNIVERSITY STUDENT FINANCIAL SERVICES JANICE EVANS

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1 Federal Student Loan Repayment SUFFOLK UNIVERSITY STUDENT FINANCIAL SERVICES JANICE EVANS

2 You Are in Control! With a myriad of loan repayment options and consumer protections, you take control of your loans.

3 We ll cover: Organizing and Researching Your Loans Understanding your Rights and Responsibilities Understanding Your Own Situation Public Service Loan Forgiveness Learning about the Different Payment Plans Other Loan Forgiveness Resources

4 Organize and Research ORGANIZE RESEARCH Use methods you are comfortable with National Student Loan Data System (NSLDS) Scan and keep all documents electronically Gather all records from all schools and compare to NSLDS Good old fashioned expandable folder and manila folders for each loan/type of issue Create spreadsheet with all federal student loans (and alternative loans, if any)

5 nslds.ed.gov - National Student Loan Data System Provides a list of each of your federal student loans, including: Amount initially borrowed Current principal due Type of interest (fixed /variable) Interest rate Provides the federal loan servicer for each of your federal student loans

6 nslds.ed.gov - National Student Loan Data System

7 nslds.ed.gov - National Student Loan Data System

8 Rights and Responsibilities Rights Grace Period Deferment and Forbearance Options Loan Forgiveness Options Choice of Repayment Plan No prepayment penalty Responsibilities Always notify the Loan Servicer of: And: Address changes Income changes if on IBR Change in ability to pay loan for any reason Ability to Change Repayment Plan Annually Read every line of every document!

9 Your Own Situation You can tailor your loan repayment approach based on your own circumstances: Type of job expected Other financials Other responsibilities

10 Public Service Loan Forgiveness If you are: employed full-time in qualifying public service job and have made120 qualifying payments on your Direct Loans (after Oct. 1, 2007), in a qualifying payment plan - the remaining balance on loans that you owe may be forgiven. You must not be in default on the loans that are forgiven.

11 Public Service Loan Forgiveness Qualifying Employment Complete Employment Certification Form Government organizations at any level (federal, state, local, or tribal) Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code Other types of not-for-profit organizations that provide certain types of qualifying public services Definition of Full-Time For PSLF, you are generally considered to work full-time if you meet your employer s definition of full-time or work at least 30 hours per week, whichever is greater. If you are employed in more than one qualifying part-time job at the same time, you may meet the full-time employment requirement if you work a combined average of at least 30 hours per week with your employers. Qualifying Loans DIRECT LOANS ONLY

12 Public Service Loan Forgiveness Qualifying Repayment Plans Any of the Income Driven Repayment Plans 10 year Standard Repayment Plan Qualifying Monthly Payment after October 1, 2007; under a qualifying repayment plan; for the full amount due as shown on your bill; no later than 15 days after your due date; and while you are employed full-time by a qualifying employer. You can make qualifying monthly payments only during periods when you are required to make a payment. Therefore, you cannot make a qualifying monthly payment while your loans are in an in-school status, the grace period, a deferment, a forbearance, or default. Your 120 qualifying monthly payments do not need to be consecutive. You do not have to pay taxes on the amount forgiven.

13 Payment Plans Standard (Default Option) Graduated Extended PAYE* (negative amortization) REPAYE* (negative amortization) IBR* (negative amortization) ICR* (negative amortization) Payments are a fixed amount for up to 10 years. Payments are lower at first and then increase, usually every two years Payments may be fixed or graduated for up to 25 years Payments are 10 percent of discretionary income (if married, spouse s income considered only if file jointly) Payments are 10 percent of discretionary income (if married, spouse s income considered regardless of filing status) Payments are 15 percent of discretionary income (if married, spouse s income considered only if file jointly) Payments are 20 percent of discretionary income (if married, spouse s income considered only if file jointly) *Payments are recalculated each year and are based on updated income and family size

14 Payment Comparison ($125,000 debt/$40,000 income/single/massachusetts)

15 Income-Driven Payment Plan Loan Repayment Periods (Loan Forgiveness at end of Loan Repayment Period Taxes owed on amounts forgiven) Income-Driven Repayment Plan Repayment Period REPAYE Plan 20 years if all loans were received for undergraduate 25 years if any loans were received for grad or prof PAYE Plan 20 years IBR Plan 20 years if new borrower on or after July 1, years if NOT new borrower on or after July 1, 2014 ICR Plan 25 years

16 Direct Loan Consolidation Fixed interest rate for the life of the loan Fixed rate is based on the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%. There is no cap on the interest rate of a Direct Consolidation Loan. Pros Simplify Cons Lose benefit of different rates if want to pay principal down more quickly

17 STAY IN CONTROL Change your payment due date (check with your servicer for availability). Change your repayment plan. Consolidate your loans. Consider Deferment or Forbearance CALL YOUR SERVICER!

18 Changes in Federal Student Loan Laws/Regulations Keep your eyes open; follow the bills. There are many new bills in Congress regarding financial aid and student loans. Follow the news and check with your loan servicer periodically to find out if any changes have been made that would affect your repayment terms, rights, or responsibilities as a federal student loan borrower.

19 $ALT A Responsible Borrower Program Suffolk University Law School has teamed up with SALT to offer a comprehensive financial literacy program, brought to you in partnership with Student Financial Services and American Student Assistance (ASA). SALT offers services built around YOU: Neutral financial education resources, advice, and self-paced courses Live one-on-one counseling by trained advisers who can answer your questions objectively and advocate on your behalf Easy-to-use tools that help you monitor and manage your loans and payments online To get started, please register at saltmoney.org

20 Resources studentloans.gov studentaid.ed.gov nslds.ed.gov loanconsolidation.ed.gov Suffolk University Office of Student Financial Services $ALT A Financial Literacy Program through the Office of Student Financial Services and American Student Assistance (at the Financial Literacy section of our website) Register Now! saltmoney.org Access Group helping law students with information about student loan repayment

21 QUESTIONS?