student loan counseling
TRANSCRIPT
Private Student Loan Counseling
Overview:
The school determines student’s eligibility based on Federal Regulations for Perkins, Stafford
and Plus Loans.
Private student loans can be pursued once all federal options have been exhausted.
How Does Loan Qualification Work?
Loan Qualification is based on student financial need- which is determined by an equation
Cost of Attendance – (Expected Family Contribution + Grants and Scholarships)= Financial Need
What Do You Qualify For?
The types of student loans received by students are often determined by financial need.
Students with large financial need receive Subsidized Stafford Loans and Perkins Loans. Students with less financial need
will receive Unsubsidized Stafford Loans and Private Loans.
What is Financial Aid?
Financial Aid is money that is used to pay for school!
This aid consists of Grants ( need based aid) and work study( working to pay directly for school).
What is a Student Loan?
A student loan is considered “self help!”
A student loan is something you pay back!
What Types of Student Loans Are There?
Perkins Loans
Campus based student loans which are subsidized by the Department of Education. Awarded in cases of exceptional financial need
What Types of Student Loans Are There?
Direct Stafford Loans
Direct Stafford loans- both subsidized (interest is paid on the borrower's behalf by the Federal Government) and unsubsidized (interest is the responsibility of the borrower from the day the funds are issued and will be added to the principal balance once in repayment, capitalized) come from the Federal Department of Education in the students name at fixed interest rates.
What Types of Student Loans Are There?
Parent Plus Loan
A federal loan offered in the parent’s name on behalf of the student. It is credit based (for adverse credit history) and repayment begins immediately.
What Types of Student Loans Are There?
Grad Plus Loan
Graduate student loans offered by the Department of Education at fixed interest rates. The interest is the responsibility of the borrower from the day the loan is
issued until it is paid in full.
What Types of Student Loans Are There?
Private Loans
Credit based loans offered by private lenders at both variable and fixed interest rates. The loan is in the student’s name. A cosigner is usually
required.
Know What You Owe!
Most students take out loans and forget not only how much, but who they owe
Students can reduce the cost of borrowing and stay on top of their student loan balance by making minimal
monthly payments while in school.
How Much Will You Actually Owe?
The $5,000 a student has in loan balance at freshman year will likely increase before
graduation due to interest accrual.
Student Loan Capitalization, is when unpaid interest is added to the principal balance 6 months after graduation. It leads to a higher
outstanding balance. The average borrower graduating today owes close to $30,000 on their student loans.
What Are Your Loan Repayment Options?
Deferment
The option to delay payments during school and during repayment. The Federal Government will pay interest on Subsidized Loans during deferment. The borrower is responsible for interest on all other loans during deferments.
What Are Your Loan Repayment Options?
Pay As You Earn
For borrowers with partial financial hardship, repayment can be determined based on monthly income, family size etc. 20 year repayment
plan based on federal criteria
What Are Your Loan Repayment Options?
Income Based Repayment
For borrowers with partial financial hardship, repayment can be determined based on monthly income, family size etc. 25 year repayment plan based on federal criteria.
What Are Your Loan Repayment Options?
Forbearance
The ability to delay payments, though interest will still accrue
What Are Your Loan Repayment Options?
Interest Only
Some lenders allow students to just pay interest for a certain amount of time
What Are Your Loan Repayment Options?
Full Repayment
Full repayment is of the principal and capitalized interest balance.
What Are Your Loan Repayment Options?
Consolidation
Combine all of your loan payments into one with new terms and loan conditions
How Can Employment Impact Loan Repayment?
Certain career choices have the privilege of loan forgiveness!
Working with employers such as NPOs or government organizations can earn a borrower public service loan forgiveness after 10 years!
What If You Don’t Pay Your Loans Back?
Failure to repay student loans leads to delinquency, and then default on loan
obligations
When an account goes unpaid for 30+ days, it is often considered to be in delinquency. 90+ days of delinquency often leads to default. Student
loans can not be discharged in bankruptcy, so default can mean garnishment of wages
How Do Student Loan Repayments Impact Credit?
Most students do not have credit when they borrow their student loans
Student loans often are an early factor into many people’s credit scores, so it’s important to start off well!
More info about credit scores
What Are Some Recommendations?
• Create a budget- Create a budget for repayment and stick to it. It’s important to get off to a strong start after graduation!
• Make In School Payments- Helps student keep track of student loan balance and build credit
• Investigate consolidation- Depending on level of indebtedness or current loan program, consolidation could serve you well!
Connect With Michelle!
Michelle Bowman Director of School Development [email protected]
O: 646-843-4433