federal loan exit - amazon web services · • allows you to put all of your federal loans together...
Post on 28-May-2020
1 Views
Preview:
TRANSCRIPT
Federal Loan Exit
May/July Grads 2018Jess Christensen
Assistant Director of Financial Aid
jchriste@cord.edu
218-299-3010
• 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
• 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
Prepayment
• 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
• 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
• 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
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
NSLDS.ed.gov
• 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?
• 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
Extended Repayment
Loan Balance Maximum Loan Term
Greater than $30,000 Up to 25 years
Maximum Loan Term depends on total amount owed
• 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
• 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
• 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)
• 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?
• 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
• 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
• Lowest Monthly Payment?
• Lowest Total Cost of Borrowing?
• Convenience?
Weighing the Loan Repayment Options
???What is Best for YOU???
• Department of Ed-Federal Loan Repayment Estimator
Helpful Tool- Loan Repayment Estimator
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
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
• 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)
• 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
• May be eligible for up $17,500 in loan forgiveness
• www.studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/teacher
Teacher Loan Forgiveness cont.
• 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?
Remember…
Student Loans are just like Justin Bieber… They will not go away…
no matter how much you wish they would!!
• DEATH
• TOTAL AND PERMANENT DISABILITY
• Federal Student Loans are rarely forgiven through bankruptcy!
How can I get out of Federal Loans?
Humm…
• 270 days or more delinquent on your student loan.
DEFAULT
• 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?
• 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?
• Call or contact your lender or servicer!!!!
• They want to help you!
I’m having trouble making payments…What can I do?
• Deferment
• Forbearance
Difficult Times…
What options do you have?
• 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
• 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
• 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
• Federal Student Aid Site
www.studentaid.ed.gov
• Finaid.org
www.finaid.org
Helpful SitesReviewing Repayment Options
• 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
Graduate School Questions
• 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
• 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
CREDIT & BUDGETING
• 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
• 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
• 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
• 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?
• 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?
• 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
• 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?
• 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
Federal Perkins Loan Exit Counseling
Larry RockDirector of Student Loan Repayment
larock@cord.edu(218) 299-3323
Receive an email invitation in your college email account.
Will come from support@myloancounseling.com
https://www.myloancounseling.com
Online Exit Counseling
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
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?
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
At least half-time student
U.S. Armed Services
Unemployment
Economic Hardship
Forbearance
Deferment Eligibility
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
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
Teaching Special Education
Early Intervention Services
Provider or Supervisor of services to High-risk Children
Public Defender
Librarian
Firefighter
Continued…
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…
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
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…
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
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
Consolidation
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
Forfeit Cancellation Benefits
Forfeit Grace Period
Cons of Consolidation
Most Important Thing
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
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
Direct Consolidation
https://studentloans.gov/myDirectLoan/consolidationRedirect.action?webSource=StudentAid
Ombudsman
www.studentaid.gov
Helpful Websites Cont.
Types of Stafford Loans
• 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
larock@cord.edu(218) 299-3323
Thank You!
top related