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