Loan Exit
Loan Exit Agenda O Interest Rates O Rights & Responsibilities O Payment information O Consolidation O Benefits O Consequences O Last steps O Contacts Goals O Fulfill requirement O Translate terms O Learn what to avoid O Successful repayment
Interest Rates How does this loan work?
Loan Types O Subsidized need based O Undergraduates O Graduates until July 1, 2012 O Interest is paid by government while: O In school at least half-time O During grace period O Deferment O You are charged interest during repayment and forbearance
Loan Types O Unsubsidized not need based O Interest is charged when you get the money O Pay the interest while in school and during grace or let it accrue O Accrued interest is capitalized
Loan Types O PLUS Loans O Graduate or professional degree, and parents of dependent undergraduate O Interest is charged when the money is disbursed
Interest Rates - Undergrad O Subsidized O 7/01/2014 6/30/2015 4.66% O 7/01/2013 6/30/2014 3.86% O 7/01/2011 6/30/2013 3.4% O 7/01/2010 6/30/2011 4.5% O 7/01/2009 6/30/2010 5.6%
Interest Rates - Undergrad O Unsubsidized O 7/01/2014 6/30/2015 4.66% O 7/01/2013 6/30/2014 3.86% O 7/01/2006 6/30/2013 6.8%
Interest Rates Graduate O Subsidized O 7/01/2006 6/30/2012 6.8% O Unsubsidized O 7/01/2014 6/30/2015 6.21% O 7/01/2013 6/30/2014 5.41% O 7/01/2006 6/30/2013 6.8%
Interest Rates Graduate O PLUS Loans O Direct 7/01/2014 6/30/2015 7.21% O Direct 7/01/2013 6/30/2014 6.41% O Direct 7/01/2006 6/30/2013 7.9% O FFEL 7/01/2006 6/30/2010 8.5%
Rights and Responsibilities The fine print no one reads
Responsibility O Repay the loan in full even if: O Do not finish school O Unable to find a job O Work in an unrelated field O Dissatisfied with the school or program O Do not receive a bill
Responsibility O Notify the loan holder(s) if you: O Change your name O Change your phone number O Move O Change your social security number O Return to school at least half-time O Change employment
Rights O You must be notified if: O Your loan servicer changes O Identity of new servicer O Address and contact information O Access to your loan repayment schedule
Rights O Deferment O Postpone payments O Interest on subsidized loans is paid by ED O You must apply for deferment
Types of Deferment O Enrolled at least half time O Graduate fellowship program O Unemployed (up to 3 years) O Economic hardship (up to 3 years) O Rehabilitation Training Program O Qualifying Active Military Duty O Domestic Volunteer
Rights O Forbearance O When you don t qualify for deferment O Reduce payment up to 12 months O Interest accrues O Two types forbearance: O Discretionary O Mandatory
Discretionary Forbearance O Loan holder decides O Financial hardship O Illness
Mandatory Forbearance O Loan holder is required O Medical or dental internship or residency O Student loan(s) >= 20% of monthly gross income O National service position O Teaching service that would qualify for Teacher Loan Forgiveness O National Guard
Payment Information The really important part
When? After Grace Period O Grace period = 6 months O Clock starts when less than ½ time, withdraw, or graduate O Receive one grace period O Payments begin when grace period ends
Who Do You Pay?
Federal Loans O Loans before June 30, 2010? O Federal Family Education Loan Program O FFEL Program or FFEL O Money directly from a Lender O 1964 June 30, 2010
Federal Loans O All loans after June 30, 2010 O William D. Ford Federal Direct Loan Program O Direct Loan Program or DL O Money directly from the U.S. Department of Education O 1992 - current
Who Do You Pay? O FFEL still held by the lender O Your bank down the street O FFEL sold to the Department O One of the servicers for the Department O Direct Loan O One of the servicers for the Department
Who Do You Pay? O National Student Loan Data System O For all you federal student loan history O www.nslds.ed.gov/nslds_sa/
NSLDS
Payment Plans O Standard Repayment Plan O Graduated Repayment Plan O Extended Repayment Plan Choices O Income-Sensitive Repayment Plan O Income-Contingent Repayment Plan O Income-Based Repayment (IBR) O Pay as You Earn
Standard O Repayment up to 10 years O Same amount each month O Minimum payment of at least $50 O Example: O Loans - $30,000 O Monthly payment $345 O Total amount repaid $41,429
Graduated O Repayment up to 10 years O Payments start low and increase every 2 years O Minimum payment accrued interest or $50 O Example: O Loans - $30,001 O Payment: Years 1-2 = $237; Years 7-8 = $426 O Total amount repaid $43,668
Extended O Repayment up to 25 years O Loan debt more than $30,000 O Payments are fixed or graduated O Example: O Loans - $30,000 O Monthly payment $229 O Total amount repaid $54,961
Income-Sensitive O Repayment up to 10 years O Possible 5 year extension O FFEL loans only O Monthly payment adjusted annually O 4% - 25% of gross monthly income O Example: O Loans - $30,000; Income $25,000 O Payment: Years 1-5 = $83; Years 6-10 = $713 O Total amount repaid $47,771
Income-Contingent O Repayment up to 25 years O Direct Loans only O Payment calculated yearly based on income, family size, and loan debt O Example: O Loans - $30,000; Income $36,000 family of 3 O Payment: $249 O Total amount repaid $48,500
Income-Based O Repayment period up to 25 years O Partial financial hardship O Payments calculated at 15% AGI O Example: O Loans - $30,000 O AGI $36,000 family size of three O Monthly IBR payment $92
Pay as You Earn O Qualifications O Partial financial hardship and O New loan borrower on/after Oct. 1, 2011 or O Loans before Oct. 1, 2007 have zero balance before new loans are taken out and have a Direct Loan disbursed after Oct. 1, 2011
Pay as You Earn O Repayment period up to 20 years O Loan balance and dates O Calculated at 10% discretionary income O Example: O Loans - $30,000 O AGI $36,000 family size of three O Monthly payment $61
Standard Payment Plan Loan Amount Length Monthly Payment Interest Total Repaid $ 7,500 10 years $86 $2,857 $10,357 $ 15,000 10 years $173 $5,715 $20,715 $ 30,000 10 years $345 $11,429 $41,429 $ 46,000 10 years $529 $17,524 $63,524 $ 60,000 10 years $690 $22,858 $82,858 $100,000 10 years $1,151 $38,097 $138,097 $150,000 10 years $1,726 $57,144 $207,144 $175,000 10 years $2,014 $66,669 $241,669 $225,000 10 years $2,589 $85,717 $310,717
Comparison $30,00 loan balance Payment Plan Monthly Amount Payment Length Total Repaid Standard $345 10 years $41,429 Graduated $237- $518 10 years $43,668 Extended Fixed $229 25 years $54,961 Income Contingent $249 14 yrs. 10 mos. $48,500
Repayment Tools O https://studentaid.ed.gov O www.mappingyourfuture.org O www.finaid.org O Loan Servicer O Excel sample templates, loan amortization
Consolidation Making it whole
Consolidation O Combine loans with different payees into one loan O One payment O Maximum repayment is up to 30 years O Fixed interest rate using a weighted average O Learn more at 1.800.557.7392 O https://studentaid.ed.gov
Eligibility O Loans must be in good standing O Grant or loan refunds are not owed by the borrower O Qualifying loans include O Federal student loans: FFEL, DL, PLUS O Perkins O Health Professions Student Loans O Nursing Student Loans (NSL) O Health Education Assistance Loans (HEAL)
Not Eligible O Defaulted federal student loans O Unless satisfactory repayment has been met O Credit card debt O Private, signature, or alternative loans O State loans not guaranteed by the federal government
Should you consolidate? Yes One bill Lower payment No 30 years Pay more Lose benefits
Loan Forgiveness
Wiping out student debt?? O Not usually O Federal student loans are not discharged through bankruptcy O Loan forgiveness O Total and Permanent Disability (TPD) O Teacher Loan Forgiveness (TLF) O Public Service Forgiveness
Total and Permanent Disability (TPD) O Veteran - due to a service connected disability O Receiving SSDI or SSI benefits O Certification from a doctor of TPD O www.disabilitydischarge.com O 1.888.303.7818
Teacher Loan Forgiveness (TLF) O Loan forgiveness for teachers O Up to $17,500 O Teach five (5) consecutive academic years full time in: O Schools or O Education service agencies that O Service low-income families and meet other requirements
TLF Requirements O New borrower O First loan on/after October 1, 1998 or, O Loans before October 1998 with zero balance O Eligible Stafford loan O Direct Loan or FFEL Program loan, or O Consolidation loan O https://studentaid.ed.gov/tc O 1.800.433.3243
Public Service O Loan forgiveness for public service workers O Eligible loans O William D Ford Federal Direct Loans O Undergraduate loans O Graduate loans O PLUS loans O Consolidation loans
Public Service O Worked/Served full time 10 years O Not-for-profit employees O Teachers O Law enforcement officers O Government employees O 120 qualifying payments O https://studentaid.ed.gov/publicservice
Benefits of Paying What s in it for you
Benefits O Credit reports and score O Lower finance charges O Avoid collectors O Interest benefits O Tax benefits O www.irs.gov IRS Publication 970 O It s the right thing to do
Consequences Here are the bad things
Delinquency O Payment is received after the due date O Late fee may be added O May be reported to the credit bureau O Can lower your credit score O Failure to make full payments for 270 days will lead to ODefault
Default Consequences O Nothing good
Default Consequences O Collection Charges
Default Consequences O Loans assigned to a collection agency
Default Consequences Garnish Your Wages
Default Consequences O Treasury Offset
Default Consequences O Revoke your professional license
Default Consequences O Nothing good O It will haunt you
Unable to Pay? O Don t ignore it O Contact your servicer immediately O Change you payment due date O Ask about deferment or forbearance O Consider a different repayment plan O Keep track of all communications
Financial Considerations Taking care of business
Debt-Management OKnow where your money goes O Organize O Budget O Plan
Money Matters O Budget & Organize O Repay Your Student Loan O Control Your Credit O Identity Theft O Calculator Tools O www.mappingyourfuture.org
Completing Exit Counseling Last steps
Completing the Exit O Log on to complete your exit counseling O www.studentloans.gov O Sign in O Need FAFSA pin number O Click on Complete Counseling O Select Counseling type Exit O Designate your school Union University O Review your personal information
Summary & Contacts Key points
Summary O Know who you owe O Find the right payment plan O Create a budget O Pay on time O Ask for help if trouble is ahead O Stay in touch
Loan Repayment O Calculate estimated payment O https://studentaid.ed.gov O www.mappingyourfuture.org O Pick the a plan that works for you
Servicer Phone Website Aspire Resources 1.855.475.3335 www.aspireresourcesinc.com Cornerstone 1.800.663.1662 www.mycornerstoneloan.org ESA/Edfinancial 1.855.337.6884 www.edfinancial.com Fed Loan Servicing (PHEAA) 1.800.699.2908 www.myfedloan.org/ Granite-State 1.888.556.0022 www.gsmr.org Great Lakes Educational 1.800.236.4300 www.mygreatlakes.org MOHELA 1.888.866.4352 www.mohela.com Navient 1.800.722.1300 www.navientcom Nelnet 1.888.486.4722 www.nelnet.com OSLA Servicing 1.866.264.9762 www.osla.org VSAC Federal Loans 1.888.932.5626 www.vsacfl.org
NSLDS O National Student Loan Data System O All you federal student loan information O www.nslds.ed.gov/nslds_sa/ O e-mail: studentaid@ed.gov O 1.800.433.3243
Credit Bureaus O Experian...888.397.3742 O TransUnion..800.680.7289 O Equifax.800.525.6285 O www.annualcreditreport.com O Free annual credit report O 1.877.322.8228
Print Out a Copy of the Exit Counseling Presentation O http://www.uu.edu/financialaid/undergraduate or O http://www.uu.edu/financialaid/adultstudies or O http://www.uu.edu/financialaid/graduate