How To Pay Off A Student Loan

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1 Exit Counseling Feeling a little crabby about student loan repayment?

2 Why am I here? You graduated? You are transferring? You dropped below the required 6 credits? You dropped out of classes? FED AID

3 MPN REVIEW You agreed to repay your loan(s) and interest back even if: You did not complete the program Did not complete the program within the regular time frame Unable to find employment Dissatisfied i with ih the education you received You must notify your lender if: Change name, phone number, SSN Re enroll, transferring New Graduation date

4 Grace Period is Over: Now What!? Payment Plans Standard Repayment: Principal and interest payments are due each month throughout the repayment term (10 years) Graduated Repayment: Payments are smaller at the beginning of repayment and step up at specified periods and in specified amounts over the term of the loan (Based on the idea that borrowers will make more further in their career) Income Sensitive Monthly payments based on your income (4 25% of gross income), payments are fixed one year at a time Income Based Repayment: Monthly loan payments are based on a percentage of borrower s monthly gross income (Must have a financial hardship to qualify) ( ) Extended Repayment (Graduated and Fixed): Lengthen repayment term up to 25 years

5 Additional Repayment Option Consolidation Loans are combined together and refinanced. Lower monthly payments but total payback is substantially more years to pay it off depending on how much you have borrowed. Your interest rates from your previous loans will change. May forfeit deferment options Could forfeit grace period Could affect forgiveness or discharge benefits REMEMBER: You can prepay all or any part of your loan with NO Penalties.

6 Debt Management Strategies You can prepay your loan You can request a shorter payment schedule You can change payment plans Remember if you are continuing your EDUCATION and may be making MORE student loans do your best to stay within YOUR borrowing perimeter REMEMBER: Live like a student while you are a student so when you aren t a student anymore you don t have to.

7 Deferments What if I Can t Pay?!?! Temporary suspension of monthly payments where interest does not accrue. Qualifications for Deferment: 1. Unemployed or working less than 30 hours a week 2. Enrolled in school full or half time 3. Temporarily disabled 4. In graduate school 5. In an internship/ residency program 6. In the military or providing a public service 7. Pregnant or caring for a new born 8. Teaching in a teacher shortage area 9. Have an economic hardship 10. Monthly student loan payments are equal to or exceed 20% of your gross monthly income

8 What if I Can t Pay: More Options Forbearance Temporary suspension of monthly payments that is granted under certain circumstances by your lender/ servicer Interest continues to accrue and you will be responsible for paying it when you begin to pay on your loan again. Does not lock in your interest rates May be granted for the following reasons: Unemployment Partial Disability Other Documented Hardship Period of time during which the borrower is permitted to temporarily stop making loan payments or reduce the amount paid

9 Loan Discharge/Forgiveness What qualifies my loan for discharge/forgiveness? g Death Total and permanent disability Teaching in a low income school or designated d teacher shortage area (as designated by MDHE) For child care providers Public Service Employees Volunteering Military Contact your lender and discuss possible options Visit:

10 What happens if I default? You will lose you federal and state tax returns and any social security payments You will become ineligible for any Title IV student aid (Pell, loans, scholarships, hi etc.) You become ineligible for federal benefits; including employment Since df default is reported to the credit bureaus, it will become difficult to borrow money or obtain a credit card or other types of credit You wages can be garnished ihd up to 15% you could be sued for the entire amount of the loan Your loan will be turned over to a collection agency Late fees each month from lender

11 I ve Ive Defaulted: Can I fix it? Contact you lender/servicer of your loan and make arrangements for the loan Make 6 full consecutive payments py towards your student loan There is a rehabilitation ti program available to cure the default Pay the full amount of the loan

12 General Tax Info For You You can possibly qualify for: Hope Credit Lifetime Learning Credit Tuition and Fees Deduction Student Loan Interest Deduction Talk to your tax preparer for more information

13 Student Loan Ombudsman If you have a question about your student loan contact School Lender Guarantor If you still have a problem contact the FSA Ombudsman to help resolve student loan disputes FSA Ombudsman, 830 First Street, NE Fourth Floor, Washington, D.C

14 Remember, every decision

15 has a consequence!!

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