Federal Loan Exit - Amazon Web Services · • Allows you to put all of your federal loans together...
Transcript of Federal Loan Exit - Amazon Web Services · • Allows you to put all of your federal loans together...
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Federal Loan Exit
May/July Grads 2018Jess Christensen
Assistant Director of Financial Aid
218-299-3010
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• 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
Responsibilities as a Borrower
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• 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
Prepayment
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Prepayment
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• 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
Types of Direct Student Loans
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• 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
Grace Period
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• Any unpaid interest will be added to your total principal loan
amount
• Increases the total loan amount that you will pay on this loan
Interest Capitalization
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Federal Servicer Contact Information(Tip: Set-Up a Profile on their Website)
Loan Servicer ContactCornerStone 1-800-663-1662 www.mycornerstoneloan.org
FedLoan Servicing (PHEAA) 1-800-699-2908 www.myfedloan.org
Granite State – GSMR1-888-556-0022 www.gsmr.org
Great Lakes Educational Loan Services, Inc.1-800-236-4300 www.mygreatlakes.org
HESC/Edfinancial1-855-337-6884 www.edfinancial.com
MOHELA1-888-866-4352 www.mohela.com
Navient1-800-722-1300 www.navient.com
Nelnet1-888-486-4722 www.nelnet.com
OSLA Servicing1-866-264-9762 www.osla.org
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NSLDS.ed.gov
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• Lists all of your FEDERAL loans.
• Lists your current servicer
• NSLDS requires your Federal Student Aid FSA ID and password to log in (This is the same username and password used to log in to the FAFSA)
• It will NOT list Private Loans.
NSLDS (National Student Loan Data System)
What is it & why is it important?
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• 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
Standard Repayment
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Extended Repayment
Loan Balance Maximum Loan Term
Greater than $30,000 Up to 25 years
Maximum Loan Term depends on total amount owed
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• 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
Graduated Repayment
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• 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: https://studentaid.ed.gov/repay-loans/understand/plans/income-driven
Income-Based Repayment
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• 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: https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven
Pay As You Earn Plan (PAYE) Revised Pay As You Earn (REPAYE)
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• Federal Direct Loan Consolidation Program
• https://studentloans.gov
• 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
ConsolidationIs it right for ME?
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• 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.
Consolidation- Pros
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• 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.
Consolidation- Cons
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• Lowest Monthly Payment?
• Lowest Total Cost of Borrowing?
• Convenience?
Weighing the Loan Repayment Options
???What is Best for YOU???
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• Department of Ed-Federal Loan Repayment Estimator
Helpful Tool- Loan Repayment Estimator
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REPAYMENT SAMPLES
Loan Amount $30,000
Interest Rate 4.45% FIXED
Standard Repayment
10 years 20 years
Monthly Payment $313.53 Monthly Payment $191.02
Total Cost of Loan $37,624.35 Total Cost of Loan $45,845.72
Total Interest Paid $7,624.35 Total Interest Paid $15,842.72
Monthly Payment Saving on 20 year Repayment = $122.51
Additional Cost of 20 year Repayment = $8218.37Repayment calculations from www.finaid.org
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REPAYMENT SAMPLES
Loan Amount $30,000
Interest Rate 7.00% FIXED
Standard Repayment
10 years 20 years
Monthly Payment $348.33 Monthly Payment $232.59
Total Cost of Loan $41,798.81 Total Cost of Loan $55,821.43
Total Interest Paid $11,798.81 Total Interest Paid $25,821.43
Monthly Payment Saving on 20 year Repayment = $115.74
Additional Cost of 20 year Repayment = $13,922.62Repayment calculations from www.finaid.org
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• Only available in the Direct Loan Program
• Allows forgiveness of remaining debt after 10 years of standard payments or Income Driven Repayments
• Must work in a qualified Public Service Field
• Generally this will be a 501(c)(3) Non-Profit Employer, Some other Not-for-profit organizations providing Public Service, or government organization
• Additional Information on PSLF
Public Service Loan Forgiveness (PSLF)
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• 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
Teacher Loan Forgiveness
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• May be eligible for up $17,500 in loan forgiveness
• www.studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/teacher
Teacher Loan Forgiveness cont.
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• It is your responsibility to make sure that your 1st 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 1stpayment!
What if I don’t get a bill?
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Remember…
Student Loans are just like Justin Bieber… They will not go away…
no matter how much you wish they would!!
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• DEATH
• TOTAL AND PERMANENT DISABILITY
• Federal Student Loans are rarely forgiven through bankruptcy!
How can I get out of Federal Loans?
Humm…
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• 270 days or more delinquent on your student loan.
DEFAULT
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• 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.
What Happens if I Default?
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• 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.
Successful loan repayment tips?
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• Call or contact your lender or servicer!!!!
• They want to help you!
I’m having trouble making payments…What can I do?
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• Deferment
• Forbearance
Difficult Times…
What options do you have?
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• 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
Deferment
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• 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
Forbearance
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• Don’t Fall for Scams
• For the great price of free, the U.S. Department of Education can help you:– Lower Monthly Payments– Consolidate Federal Student Loans– Check on Loan Forgiveness– Get Out of Default
• https://blog.ed.gov/2016/01/dont-be-fooled-you-never-have-to-pay-for-student-loan-help/
Don’t Be Fooled-You Never Have to Pay for Student Loan Help
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• Federal Student Aid Site
www.studentaid.ed.gov
• Finaid.org
www.finaid.org
Helpful SitesReviewing Repayment Options
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• 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.
• 1-877-557-2575
• https://studentaid.ed.gov/sa/repay-loans/disputes/prepare
Ombudsman Office
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Graduate School Questions
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• 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.
Graduate School
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• 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.
Graduate School
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CREDIT & BUDGETING
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• 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.
Credit
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• 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.
Credit Report
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• 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 300-850
• The higher the score the lower the risk and the better the interest rates you will receive.
• It is often called your FICO score
Credit Score
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• You can receive 1 free credit report every 12 months.
• www.AnnualCreditReport.com
or
• call 1-877-FACT-ACT (1-877-322-8228)
How can I get my Credit Report?
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• You can access this at www.myfico.com
• 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
How can I get my Credit Score?
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• 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!
• www.mint.com
Create a Budget
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• 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.
https://studentloans.gov
What is your Final Task for Concordia College?
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• 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
Types of Stafford Loans
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Federal Perkins Loan Exit Counseling
Larry RockDirector of Student Loan Repayment
[email protected](218) 299-3323
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Receive an email invitation in your college email account.
Will come from [email protected]
https://www.myloancounseling.com
Online Exit Counseling
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Government loan that must be repaid
Your lender is Concordia College
9 month grace period
Interest rate = 5%
Min. Monthly Payment = $40.00
About the Federal Perkins Loan
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First Payment Due By:December 2017 Grads: October 15, 2018
May 2018 Grads: February 4, 2019
Aug 2018 Grads: June 17, 2019
No prepaymentpenalty
When Do Payments Begin?
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DefermentsCancellationsWhere can I find the forms?
www.uaservice.com
Where can I find out if my school is a low-income school? https://www.tcli.ed.gov/CBSWebApp/tcli/TCLIPubSchoolSearch.jsp
Benefits
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At least half-time student
U.S. Armed Services
Unemployment
Economic Hardship
Forbearance
Deferment Eligibility
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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
Cancellations
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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
Cancellation & Deferment Eligibility
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Teaching Special Education
Early Intervention Services
Provider or Supervisor of services to High-risk Children
Public Defender
Librarian
Firefighter
Continued…
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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
Continued…
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Outside Billing Service:
University Accounting ServicePO Box 5865Carol Stream, IL 60197-5865
Will be billed each month
Tell your parents about UAS
Where can I view my account online?
www.uasecho.com
University Accounting Service
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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
UAS continued…
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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
National Credit Bureau
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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
Regulations
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Consolidation
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One Lender & One Monthly Payment
Flexible Repayment Options (IBR)
No Minimum or Maximum Loan Amounts or Fees
Varied Deferment Options
Reduced Monthly Payment
Retention of Subsidy Benefits
Pros of Consolidation
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Forfeit Cancellation Benefits
Forfeit Grace Period
Cons of Consolidation
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Most Important Thing
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Complete Online Exit Counseling
https://www.myloancounseling.com
Notify me of any address/name change
Contact me if you can’t make your scheduled payment
Your Responsibilities
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University Accounting Service
www.uaservice.com
Perkins E-statements & On-line Payments
www.uasecho.com
National Student Loan Database System
www.nslds.ed.gov
Helpful Websites
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Direct Consolidation
https://studentloans.gov/myDirectLoan/consolidationRedirect.action?webSource=StudentAid
Ombudsman
www.studentaid.gov
Helpful Websites Cont.
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Types of Stafford Loans
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• 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
Types of Stafford Loans
Larry RockDirector of Student
Loan Repayment
[email protected](218) 299-3323
Thank You!