Student Loan Repayment. Saint Louis University School of Medicine

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1 Student Loan Repayment Saint Louis University School of Medicine

2 Overview O Locating Your Loans O Organize your loans O Postponing Repayment O Loan Repayment Terms O Loan Repayment Plans O Federal Loan Consolidation O Income Based Repayment O Public Service Loan Forgiveness O Loan Repayment & Forgiveness Programs

3 Locating Your Loans O National Student Loan Data System O O FAFSA PIN O Provides you information on all your federal loans O Does not include information on private loans O Contact your lender/servicer(s) for in-depth information on your loans. O Set up your online account information O Become familiar with their web sites

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5 Locating Your Loans O Federal Student Aid Ombudsman O Resolve problems with your federal loans O O [email protected] O (877)

6 Organize Your Loans O AAMC s FIRST for Medical Education O Offers a variety of resources and tools for financial management O Medloans Organizer and Calculator O O AAMC username and password to log in O Allows you to input the details of all of your loans O Federal, institutional and private O Lender name, phone, address O O Loan type, amount, interest rate Calculate and evaluate the available repayment options

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10 Organization Methods O Excel Spreadsheets O Google Docs Spreadsheets O There is an App for that O Regardless of the method you chose, you have to update it O Monthly O Yearly

11 Grace Periods O A brief time after you cease to be enrolled before repayment begins O Grace Period Lengths O Stafford Loans: 6 months O Grad Plus Loans: 6 months O If borrowed after 7/1/08 O If borrowed before 7/1/08, no grace period O Perkins Loans: 9 months O Loans for Disadvantaged Students and Primary Care Loans: 1 year O Federal Consolidation Loans O Do not have a grace period

12 Postponing Repayment O Deferment is a: O Temporary postponement of payments for borrowers who meet eligibility requirements O Must apply on a yearly basis O Borrowers are responsible for interest on unsubsidized loans O Can choose to accrue the interest or pay it O The most common types of deferment are: O In-School O Graduate Fellowship O Unemployment

13 Postponing Repayment Cont. O Forbearance is: O A temporary postponement or reduction of payments O O O O O Mandatory Residency Forbearance O Lenders must provide you with the option of forbearance on your loans during residency Must apply on a yearly basis Interest will accrue on both Subsidized and Unsubsidized Loans Interest can capitalize at the end of each Forbearance term Generally the most expensive repayment option O If you are having difficulty making payments on your student loans, contact your lender/servicer immediately

14 Interest Capitalization O The addition of outstanding interest to the principal amount O Increases the principal loan balance O Occurs when your loan status changes O End of grace period and the beginning of repayment O As frequently as quarterly during repayment O Capitalization policies will vary by lender

15 Loan Repayment Terms O The Standard repayment term is 10 years O The Extended repayment term is 25 years O For students who have borrowed more than $30,000 in student loans O Does not require consolidation O Payments can be either standard or graduated O Must have borrowed student loans after October of 1998 O The Consolidation Repayment term is 30 years O Must consolidate loans with the Department of Education

16 Repayment Plans Standard Plan- O Monthly payments are a fixed amount for the entire repayment term O Payment amounts are determined based on the total borrowed O Total amount repaid is less than both the Graduated and Income Sensitive/Contingent or Extended Plans

17 Repayment Plans Continued Graduated Plan- O Payments begin smaller O Never below the monthly accrued interest amount O Increase over the repayment period O May be a good option if you expect your salary to increase over time O Repayment totals are generally larger than what the standard would have been

18 Repayment Plans Continued Income Sensitive/Contingent Plan- O Payment amounts are adjusted annually based upon your monthly gross income O Monthly payment amounts will not be less than monthly accrued interest O Available for up to five years O Repayment totals are generally larger than what the standard would have been

19 There is never a penalty for pre-paying your loan

20 Income Based Repayment O Effective July 1, 2009 O Payment based on household income/family size (annual verification required) O Interest is paid on subsidized loans (first 3 years) O Must demonstrate a partial financial hardship O Unpaid interest does not capitalize O Must demonstrate a partial financial hardship O Balance forgiven after 25 years O Monthly payment amount could be lowest of all the different payment plans

21 Income Based Repayment O Equates to: 15% of income that exceeds 150% of the poverty line for a borrower s family size Monthly Gross Income $3, % of the poverty line -$1, $2, % of difference x.15 Monthly Loan Payment = $ * * Based on a family size of 1 with an annual salary of $46,000 and 2011 Poverty Guidelines or

22 Income Based Repayment O Partial Financial Hardship (PFH) O When you enter repayment, if your standard monthly payment is more than your IBR payment, you have a PFH Loan Balance $180,000 Standard Monthly Payment Income Based Repayment $3,240 > $370 * Based on a family size of 1 with an annual salary of $46,000 and 2011 Poverty Guidelines

23 Repayment Plans Graduated Standard Income Contingent/ Sensitive As low as interest only Income Based

24 Federal Loan Consolidation The process of combining multiple loans into one loan with a single lender Pros of Consolidation Simplify your loan portfolio Lock in low variable interest rates Take advantage of Public Service Loan Forgiveness Make Perkins or LDS loans eligible for IBR Cons of Consolidation The longer the repayment means an increase in interest Benefits through your other lender will be lost Weighted average, will not lower fixed interest rates Lower monthly payments, with extended repayment

25 Federal Loan Consolidation O To consolidate you must no longer be attending school O You must also have eligible Federal loans O Perkins O Loans for Disadvantaged Students (LDS) O Stafford O Graduate Plus O Currently only the Department of Education is consolidating Federal Loans O For more information and the online application for Consolidation, visit:

26 Public Service Loan Forgiveness (PSLF) Is intended to encourage individuals to enter and continue in full-time public service employment by forgiving the remaining balance of their Direct loans after they satisfy the public service and loan repayment requirements -Federal Register Volume 28, p Department of Education Public Service is not limited to Primary Care 10/23/2008

27 Public Service Loan Forgiveness Eligible Work Eligible Loans Eligible Payments PSLF

28 Public Service Loan Forgiveness O Eligible work is defined as: O Full-time work in any position in one of the designated areas such as: O Non-profit, tax exempt, 501(c)(3) organizations O Federal, state or local government O Military service O Public schools and colleges O Work does not have to be continuous O Must total 10 years in Public Service Eligible Work

29 Public Service Loan Forgiveness O Eligible Loans are Federal Direct Loans O Direct Stafford Subsidized and Unsubsidized O Direct Grad Plus O Direct Consolidation O Borrowers who do not have Direct Loans may consolidate to make their Non-Direct Loans eligible O Payments on Non-Direct Loans made prior to consolidation will not count toward PSLF O Private/Alternative loans are not eligible O Residency Relocation Eligible Loans

30 Public Service Loan Forgiveness O Eligible Payments on Federal Direct Loans O Must make 120 (10 years) on time payments O Only payments beginning October 1, 2007 will count O Payments can be made using the following plans O Standard O Pay the same monthly amount O Income Contingent O Payment is as low as monthly interest O Income Based O Payment is often lower than monthly interest O Based on adjusted gross income and family size Eligible Payments

31 Public Service Loan Forgiveness O After 10 years you must apply for PSLF O O As of today, PSLF application is still in development You are responsible for providing proof of all 3 requirements O Must maintain Public Service employment during application and forgiveness periods O New Employment Certification O O Meant to help you track your qualification for PSLF Beginning in 2012 you will be able to annually submit information about your employer(s) O Consider combining Public Service with IBR to maximize the amount forgiven O For additional information:

32 Loan Repayment Programs (LRP) O National Health Service Corps (NHSC) O NHSC s Student to Service (S2S) O National Institute of Health (NIH) O Indian Health Service (IHS) O State and Local Government O AAMC Database

33 National Health Service Corps (NHSC) O Recruits fully trained/licensed health professionals to provide care in shortage areas O Must be a U.S. citizen O Eligible loans: All Federal and some private loans that were used for tuition and living expenses O 2 year full-time minimum commitment O 4 year part-time minimum commitment O Can extend contract for an additional years

34 National Health Service Corps (NHSC) O Must practice full or part-time primary care in an underserved area O Must repay if you do not fulfill your contract O Offers a competitive salary and benefits O Award amounts up to $60,000 for a 2 year full-time commitment O Up to $170,00 for a total of a 6 year commitment O Up to $60,000 for a 4 year part-time commitment O Applications online at: O

35 NHSC S Student To Service (S2S) O Receive $120,000 in Loan Repayment during residency O Receive a total of 4 payments beginning after you graduate O Must be a fourth year medical student O Committed to Primary Care O A U.S. citizen O Offers a competitive salary and benefits

36 NHSC S Student To Service (S2S) O 3 years of full-time or 6 year of half-time service O Service commitment begins after residency O Must be in an NHSC Health Professions Shortage Area (HPSA) O Eligible Loans O Any federal or private/alternative loans that were used for educational expenses O Residency Relocation---does not qualify O Grad Plus or Private/Alternative with a co-signer do not qualify

37 National Institute of Health (NIH) O Offers loan repayment in exchange for research in 5 defined areas. O Clinical, Disadvantaged Clinical, Contraception & Infertility, Health Disparities, Pediatrics O Eligibility: O U.S. citizen O Have a doctoral level degree O Loan debt equivalent to or exceeding 20% of your income O Applications available at O

38 National Institute of Health (NIH) O Up to $35,000 per year O All Federal and some private loans used for tuition and living expenses O 2-3 year minimum commitment O Research can occur at any non-profit or government facility O Must repay if you do not fulfill your contract

39 Indian Health Service (IHS) O Eligibility O U.S. citizen O Have a health professions degree O A valid state license O Participation is contingent on receiving job offer from an approved site O Up to $20,000 per year O Eligible loans are loans borrowed to pay for your health professions education O Must repay if you do not fulfill your contract O Applications available at:

40 State and Local Government Programs O Similar to the NHSC, IHS and NIH programs O May require a contract to serve in a specific area for a given period of time O Many of them are geared to the Primary Care area O Search the state or local government web sites O Due to the economy some programs have been suspended O Also consider looking at your employer s benefit package

41 State and Local Government Programs O AAMC database lists Federal, State and other sources: O Loans O Scholarships O Repayment and Forgiveness programs O Don t use keyword search O Sort by state O Link to it by going to the SFS website O O Click on Loan Forgiveness Programs O Click on AAMC Database link

42 O Location Things to Consider about LRPS O Some LRPs are state, school or institution specific O Must serve an underserved population or area O Penalties O Can be severe if you do not fulfill the requirements O Service commitments O You may have to sign a contract O Obligates you for a minimum of 2 years depending on program

43 Things to Consider about LRPS O Payments to your loans are considered taxable income O You are responsible for paying the taxes O Some LRPs assist with taxes O Restrictions O There may be restrictions within the field of your residency, private practice or research O Determine if your hospital, facility or company is: O For profit O Non-Profit (501c3) O Public health

44 O Locate Federal Loans at: O Highlights O MED Loan Organizer by AAMC O O Grace Periods O Short time after leaving school when payment is not required O There are 6 types of repayment O Forbearance Standard Extended Income Based Graduated Income Sensitive/Contingent O Available during residency, but can be costly O Pre-Payment is never penalized

45 Highlights O Consolidate loans to: O Simplify your loan portfolio O Take advantage of Public Service Loan Forgiveness O Income Based Repayment (IBR): O Lowest monthly payment O No interest capitalization O 25 years loan forgiveness O Public Service Loan Forgiveness O Not limited to Primary Care O 10 year loan forgiveness O Can use IBR with Public Service Loan Forgiveness O Consolidate to Direct Loans

46 Have a plan O Find and organize your loans and lenders O Define your goals and make repayment part of them O What payment term fits your goals O What payment plan fits your goals O How does each payment fit into your budget O Is deferment an option O Is forbearance right for you O Are you interested in Income Based Repayment O Does PSLF fit into your plans O Do you need to Consolidate for PSLF

47 Planning O If you need assistance in developing your repayment plan contact the SFS office O us: [email protected] O Call us: O Visit us: Caroline Room, 120 O Monday to Friday 8:30 a.m. to 5:00 p.m. Appointments preferred!

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