exit loan counseling presentation - quinnipiac university · when reaching out to your servicer be...
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Exit Loan Counseling PresentationOffice of Financial Aid – Spring 2018
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Service design and you Federal Regulations require
federal loan borrowers to complete an “Exit Interview” session prior to leaving college
To learn about your: Responsibilities Rights Repayment Options
Why Do You Have to Be Here?
Interest paid by government while in school & in grace
period or authorized deferment
Direct Subsidized
Perkins
Interest paid by student in-school or accruing &
capitalizes
Direct Unsubsidized
Graduate PLUS
Federal Loans
Getting Organized –Where Are My Loans?
Federal Loans
www.studentloans.govwww.nslds.ed.gov
Private Loans
Or Lender’s Website(s)
From NSLDS.ED.GOV
Keep Track of Your Loans
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Your Responsibilities Complete Exit Loan Counseling Know the name and contact information of your loan servicer Notify servicer of changes in name, email, address,
employment, etc. Make your monthly payments
Know Your Servicer
Tips When Contacting Servicers When reaching out to your servicer be sure to keep a record
of your communications Create a log of all phone calls including: Date & Time Who you spoke to If they agreed to do anything for you (i.e. send paperwork, change
repayment plan, etc.)
Open your mail/emails and be sure to see if you are required to take any action (i.e. renewing paperwork for your payment plan)
You promise to repay even if you Don’t receive payment notices or reminders from your
lender/servicer Unable to locate work after completing your program Are not satisfied with your education Don’t complete program of study
Know What You Owe in Federal Loans
UndergraduateAverage Federal Direct Stafford Loan Debt
Graduate Average Federal Direct Stafford Loan Debt
Graduate PLUS Average Loan Debt
AmountBorrowed
$23,510 $36,752 $34,992
Interest Rate 4.45% 6% 7%Monthly Payment
$244 $408 $406May 2018 Graduates
Understanding Your Federal Debt
Capitalized Interest
Interest accrues on most loans from disbursement date Remains until enters repayment Can payoff before repayment which saves $
Principal Loan Interest
Loan
Total Principal & Interest +
New Interest
$29,000$1,000
$30,000
Capitalization is the addition of unpaid accrued interest to the principal balance of the loan Capitalization may occur more frequently for certain loans at certain times
Your Rights
Receive a copy of your MPN Receive a disclosure statement Receive notice if your loan is sold and the name of the new
holder
Grace Period Time before you start paying on your loans
Type of Loan Length
Subsidized/Unsubsidized 180 days (6 Months)
Graduate PLUS 180 days (6 months)
Perkins 9 Months
Private Loans Varies
Stopped Attending School
(Exhausted Your Grace Period)
Type of Loan When Repayment Starts
Federal Loans Right after Graduation Within 30-45 days
Private Loans Right after GraduationWithin 30-45 days
Your Rights – Grace Period
You may prepay all or a portion of your loans without penalty
Any additional payment made above “required” monthly amount due will reduce outstanding balance
Must have all accrued interest paid
Must not have late fees
Option of requesting shorter repayment schedule
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Your Rights - Prepayment
Be sure to consult with your servicer to ensure taking the correct stepsOnce loan paid in full, right to have proof of zero balance
Your Rights - Repayment Options
Standard Repayment• Highest monthly
payment• Lowest total interest• 10 year repayment
term
Graduated Repayment• Interest only payments
initially• Payments increase
incrementally every 2 yrs
• 10 year repayment term
Extended Repayment• Federal debt must
exceed $30,000 all within the same loan program (DL or FFEL)
• Lowest monthly payment
• Highest total interest• Up to 25 years to
repay
2. GraduatedRepayment
$137$278
$411
Payments start out low & increase every 2 years for 10 years
$244 $244 $244
1. Standard Repayment
Payments stay the same for10 years
3. Extended Repayment$237
$237
$237$237
$237
Extended Graduated (also available)Payments will increase every 2 years for 25 years
25 Years
Extended FixedBorrowed at least $30,000 and payments will
remain same for 25 years
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Repayment Plan
First Monthly Payment
LastMonthly Payment
TotalInterest
Paid
Total LoanPaid
Repayment Months
Standard $244 $244 $5,728 $29,238 120
Graduated $137 $411 $7,178 $30,688 120
Extended Fixed
Not Eligible Not Eligible Not Eligible Not Eligible N/A
Traditional Repayment Examples - Undergraduate
Based on a debt of $23,510 at an interest rate of 4.45%
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Repayment Plan
First Monthly Payment
LastMonthly Payment
TotalInterest
Paid
Total LoanPaid
Repayment Months
Standard $814 $814 $25,959 $97,703 120
Graduated $468 $1,404 $33,055 $104,799 120
Extended Fixed
$484 $484 $73,417 $145,161 300
Traditional Repayment Examples - Graduate
Total debt of $71,744 (Unsubsidized $36,752 at an interest rate of 6% & Graduate PLUS debt of $34,992 at an interest rate of 7%)
Income Driven Repayment Plans
Income Driven Repayment Plans
IDR plans are based on your income, family size, marital status and state
of residence. Since these can change, annual updates are required to
keep payments aligned with your current situation.
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Income Driven PlansIncome Based
• Payments capped at standard 10 year amount• Must submit annual paperwork to determine
yearly payment• Up to 25 years to repay• FFEL & Direct Loan Program
Pay As You Earn • Payments capped at standard
10 year amount• Must submit annual
paperwork to determine yearly payment
• Up to 20 years to repay• Direct Loan Program Only
Revised Pay As You Earn• Payment amount is10% of household income
without a cap• Must submit annual paperwork to determine
yearly payment• Up to 20 years to repay (Undergrad debt)• Up to 25 years to repay (w/Grad debt)• Direct Loan Program Only
IBR
PAYEREPAYE
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Loan ForgivenessMarried
BorrowersEligibility
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Repayment Plan
First Monthly Payment
LastMonthly Payment
TotalInterest
Paid
Total LoanPaid
Repayment Months
IBR (New) $183 $244 $6,709 $30,219 122
PAYE $183 $244 $6,709 $30,219 133
REPAYE $183 $331 $6,401 $29,911 120
IDR Repayment Examples - Undergraduate
Based on a debt of $23,510 at an interest rate of 4.45%, AGI $40,000, 1 household, reside in CT
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Repayment Plan
First Monthly Payment
LastMonthly Payment
TotalInterest
Paid
Total LoanPaid
Projected Loan
Forgiveness
Repayment Months
IBR (Old) $399 $814 $53,870 $125,614 n/a 198
PAYE(IBR New)
$266 $814 $47,887 $119,631 $39,037 240
REPAYE $266 $1,020 $86,512 $158,256 n/a 282
IDR Repayment Examples - Graduate
Total debt of $71,744, AGI $50,000, 1 Household residing in CT(Unsubsidized $36,752 at an interest rate of 6% & Graduate PLUS debt of $34,992 at an interest rate of 7%)
Keep in Mind with IDR
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• Increased interest will accrue and may have negative amortization• Unpaid interest will capitalize at some point• Monthly payments could change• All IDR payments except REPAYE will cap at the standard 10 yr amount• Must select an IDR plan if seeking public service loan forgiveness (PSLF)
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Thinking Public Service Loan Forgiveness Need to make 120 qualifying payments under the IDR plan on your Federal Direct
Loans Work for a non-profit organization full-time for the 10 years of payments Any remaining loan balance after the 120 payments will be forgiven but are not
taxable
Eligible LoansEligible
Employment Eligible Payments Forgiveness
Plan 1st payment Last payment Total Paid Total Forgiven
IBR (New) $266 $460 $42,746 $75,544
Graduate Unsub. and GPLUS debt $71,744
PSLF – Primary Servicer is FedLoans
Learn more www.saltmoney.org
Understanding Your Federal Debt
Contingent Benefits
.25% Interest Rate Reduction for Auto-Debit
12 on-time payments* for loans disbursed before July 1, 2012
Possible rebate Programs
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Borrower Benefits
Having Difficulty Repaying Loans?Contact servicer regarding possible options/rights:
Adjustment of Repayment Plan
Deferment
Forbearance
Cancellation Specific terms apply
Your Rights - Deferment
In-School part-time or more The economic hardship deferment has a
complicated set of eligibility criteria, contact your servicer for specifics Military service Peace Corp Federal government pays the interest on
subsidized Stafford loans, Perkins loans and on the portion of a consolidation loan that paid off a subsidized Stafford loan
Your Rights - Forbearance Temporary time when you are not
making loan payments and considered in good standing Must be approved before stopping
payment Total of 36 months for the life of your
loan, generally receive 6 months at a time Interest is still accruing during a
forbearance or you may pay on it
There are a few situations in which your loan may be discharged, cancelled or forgiven: Your death You become totally or permanently disabled (and meet certain
additional requirements) Your school falsely certified your loan eligibility A loan was taken in your name falsely as a result of identity theft Your school failed to refund required loan funds to your lender on your
behalf You are unable to complete your program of study due to the closing of
your school
Your Rights – Loan Cancellation or Discharge
Your Rights - Loan Forgiveness Programs Full or partial Volunteer work AmeriCorps Peace Corps Volunteers in Service to America
(VISTA) Military Service (ex. Army National Guard) Teaching in High Need or Underserved Area Legal Area (ex. Public interest or Non-profit) Medical (ex. Health & Human Services,
Hospitals, Private Healthcare Org)
Delinquency & DefaultDon’t let this happen to you! Delinquency Lender has not received payment by the stated due date Could lose benefits in repayment
Default is the worst case scenario 270 days delinquent Responsible for Attorney & Collection fees Affects credit score Garnished wages Tax refunds withheld Ineligible for financial aid
Unresolved Federal Loan Issues
Office of the OmbudsmanU.S. Department of Education
FSA Ombudsman GroupP.O. Box 1843
(P) 877-557-2575(F) 606-396-4821
www.studentaid.gov (search for Ombudsman)
Consolidation
What About Federal Consolidation? Can only consolidate Federal loans together
(Stafford/Direct, Graduate PLUS, Perkins)
Provides ability to secure a fixed interest rate Interest rate based on the weighted average of the
interest rates on the loans being consolidated, rounded up to the nearest eighth of a percent and capped at 8.25%
Need to apply for consolidation & no fees charged
www.studentloans.gov for Federal Loan Consolidation Application
Pros Creates one loan versus multiple
loans with different servicers Reduces monthly payment by
extending years to repay Possible interest rate reduction
uses averages Can select your Federal Loan
Servicer
Cons Lengthens time of repayment,
increases amount interest paid Possible increase to interest rate Lose original borrower benefits Lose grace period (repayment will
begin within 45 days)
Consolidation
Consolidation RepaymentExample
https://myfedloan.org/manage-account/consolidation/estimator.shtml Lower Payment More YrsBased on 20 yrs
Pros Creates one loan with one company
with the one interest rate versus multiple loans with different interest rates & servicers
Can elect to only consolidate private educational loans
Could reduces monthly payment by extending years to repay
Possible interest rate reduction depending upon credit score
Ability to remove or change co-signer
Cons Create new loan where loss of
repayment benefits may occur If include federal loans all
repayment benefits lost Longer repayment time, increases
amount of interest paid Possible increase to interest rate
or changing from fixed to variable
Private / Refinance Consolidation
Now That You are Done with School What Happens Next…..
Moving onto Graduate School Notify your Servicer that you are returning to
school Generally will not accept deferments unless currently
enrolled
File for In-School Deferment, if attending at least part-time (be sure to check with your school how they define part-time)
Private Alternative Loans Remember not part of this discussion Things to consider and remember Research about repaying your Private Alternative Loans
Loan Amount Interest Rate Loan Term Monthly Payment
Sub./Unsub. Direct Loan
$23,510 4.45% 10 years $244
Private Alternative Loan
$40,000 8% variable 15 years $382
Repayment Example
Managing Your Debt
Make the most of your grace period Use this time to get your finances in order Get yourself organized Consider making a “spreadsheet” of all your debt not just student loans and start
looking at the types of debt and benefits or drawbacks of each
Develop monthly budget including all expenses Consider using www.paycheckcity.com to help determine your take home paycheck
Take the time to be realistic when looking at your expenses
Keep your payments current – Affects your credit Landlords, insurance companies, potential employers, licensures may be affected
BEWARE…..Debt Relief Organizations
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Too Good to be True – Question It
Check Reliability
Your Personal Credit
Free Annual Credit Report www.annualcreditreport.com
Trans Union www.transunion.com or 1-800-888-4213
Experian www.experian.com or 1-888-Experian
Equifax www.equifax.com or 1-800-685-1111
Tax Benefits To Consider Now That You are Working
http://www.irs.gov/pub/irs-pdf/p970.pdf
American Opportunity Credit
Lifetime Learning Credit
Student Loan Interest Deduction
SALTwww.saltmoney.org
Quinnipiac believes you should have the knowledge & skills to successfully navigate the financial world. $ALT offers
several tools to help you gain these skills & Quinnipiac has provided the membership for you.
Now What?Check www.nslds.ed.gov to see your loan servicersGet organized using our “Student Loan Checklist” Save money – use automatic debit to make paymentsMake payments on time to build a good credit ratingConsider paying a little extra each month to reduce the total cost of
the loanSeek help at the first sign of financial difficulty
Thank You
ContactFinancial Aid Staff
Office Undergraduate Financial Aid203-582-8750
Office Graduate Financial Aid203-582-8588