student loans & service members€¦ · consumer financial protection bureau 29 repaying...

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https://learn.extension.org/events/3014

This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Military Family Readiness Policy, U.S. Department of Defense under Award Number 2015-48770-24368.

Student Loans & Service Members

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Connecting military family service providers and Cooperative Extension professionals to research

and to each other through engaging online learning opportunities

militaryfamilies.extension.org

MFLN Intro

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Today’s Presenters Carol Kando-Pineda Counsel in the FTC’s Division of Consumer and Business Education where she leads teams to create and distribute free materials – in print, through online tips and videos, and by social media – to help people avoid scams, manage their money and make wise buys.

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Patrick Campbell Policy Analyst for the Office of Servicemember Affairs (OSA) at the Consumer Financial Protection Bureau (CFPB). Patrick is one of the country’s leading experts on the Post-9/11 GI Bill® having been a key architect of the new program in 2008.

Choosing a college

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Military.Consumer.gov • Research what you want to do for a living

o Education needed? o Average salaries

• College Scorecard https://collegescorecard.ed.gov

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Military.Consumer.gov • Research schools

o  Department of Veterans Affairs’ GI Bill Comparison Tool https://www.vets.gov/gi-bill-comparison-tool § Graduation rate § Benefits calculator § Default rate § Accreditation

o  Will the program get you where you want to go?

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Military.Consumer.gov Research schools

o College Navigator § Be sure you have the correct URL:

https://nces.ed.gov/collegenavigator/ § For-profit or not-for-profit

o  Visit the school o  Do they offer support to veterans?

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Military.Consumer.gov Research schools

o  Can you get credit for your military training?

o  Will other college credits transfer?

o  What are the total costs?

o  Read the enrollment contract

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Military.Consumer.gov Is there pressure to enroll?

o  That’s a big warning sign

o  If they won’t give you documents before signing, don’t enroll

o  Can you cancel? How?

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Military.Consumer.gov Signs of trouble: Student loan relief scams • Warning signs:

§ Up-front fee § Promising total loan forgiveness § Tell you to stop paying your student loans

• Beware: § A Department of Education seal doesn’t mean it’s legit § You have time to check out your options

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Military.Consumer.gov Signs of trouble: College degree scams • Warning signs:

§ No Studies, No Exams, No Interaction §  “Get a Degree for Your Experience!” § Flat Fee § No Waiting

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Military.Consumer.gov • Signs of trouble: high school equivalency pitfalls

o  Four legitimate high school equivalency tests GED, HiSET, TASC, and CHSPE (California only)

o  Must be: in-person, supervised, closed-book tests, given on a specific date, show ID

o  Can also take certain classes for HS requirements

• No state accepts o  An online high school equivalency test o  Work experience credits only

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Military.Consumer.gov

Questions?

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Consumer FinancialProtection Bureau

Servicemembers & Student Loans Patrick Campbell │ Office of Servicemember Affairs

Note: This presentation is being made by a Consumer Financial Protection Bureau (CFPB) representative on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the CFPB. This document was used in support of a live discussion. As such, it does not necessarily express the entirety of that discussion nor the relative emphasis of topics therein.

Consumer FinancialProtection Bureau 15

Who is this guy?

§  OIF Veteran (Combat Medic)

§  Advocated for veterans for 5 years

§  Now works for CFPB –  Office of Servicemember Affairs


What is the CFPB?

§  Consumer Financial Protection Bureau ¨  Founded in response to the 2008 financial crisis ¨  Dodd-Frank Wall Street Reform and Consumer Protection Act ¨  Our purpose is to make markets for consumer financial products

and services work for Americans.

§  Ensure consumers get the information they need to make sound financial decisions. ¨  Prices are clear up front; ¨  Risks are visible; and ¨  Nothing is buried in fine print.


What is the Office of Servicemember Affairs?

§  What we do:

¨  Educate and empower consumers

¨  Monitor complaints

¨  Coordinate on consumer protection


Paying for College

§  What is available from the federal government? ¨  Military Tuition Assistance

¨  GI Bill®

¨  Pell grants

¨  Subsidized Federal loans

¨  Unsubsidized Federal loans

¨  Grad PLUS loans


Post-9/11 GI Bill ®

Most generous GI Bill benefit since WWII §  Tuition / Fees: pays in-state tuition or $21,000+/year §  Living allowance: BAH for E-5 with dependents

§  Book stipend: $1,000/year §  Yellow Ribbon Program §  Transferability


GI Bill® Comparison Tool

Combines 17-25 different websites into a “single click” tool ¨  Calculates GI Bill benefits (all chapters of the GI Bill)

¨  Searches through over 16,000 approved schools

¨  Shows number of GI Bill students at that school

¨  Flags schools that warrant extra “caution”

¨  Displays key indicators of value •  Veteran outcomes

•  Signatories to Yellow Ribbon Program, Military Tuition Assistance MOU, Principles of Excellence, 8 Keys to Veteran Success

https://www.vets.gov/gi-bill-comparison-tool


Federal financial aid

§  How to apply? ¨  FAFSA.gov

§  Tips & Tricks ¨  Pell grants & the GI Bill

¨  Submit FAFSA early

¨  Take out loans last


Scholarships & grants

§  National Resource Directory (VA website) https://www.nrd.gov/

§  Department of Education https://studentaid.ed.gov/sa/types/grants-scholarships/finding-scholarships

§  State and school scholarships


Advantages of federal loans

§  Interest rates •  Federal government may subsidize

•  Generally fixed rate versus variable

§  Repayment •  Income-driven repayment plans available

•  Public Service Loan Forgiveness (PSLF)

•  Deferment / Forbearance

•  Discharge due to death or permanent disability


Private student loans

Private student loans usually… §  Have higher costs than federal student loans

§  Require a co-signer §  Have less flexible repayment options

§  Explore all your federal loan options first


Repaying Student Debt

§  Between 2007 and 2017, ¨  Total volume of outstanding student loan debt more than doubled,

¨  Growing from less than $600 billion to more than $1.4 trillion today

§  Student loans debt is second only to mortgages

§  Today, the average borrower with student loan debt owes over $30,000, an increase of 60 percent over the last eight years.

§  At least one-in-four student loan borrowers is behind on his or her payments or in default.



http://files.consumerfinance.gov/f/documents/201604_cfpb_servicemember-student-loan-guide.pdf


Repaying student debt

https://studentaid.ed.gov/sites/default/files/military-student-loan-benefits.pdf



Student loan benefits for servicemembers §  6% interest cap (SCRA)

¨  On pre-active duty service loans ¨  Federal loans

•  SCRA benefits are now automatically applies to Federal loans •  At least 300,000 more military borrowers have obtained the SCRA rate cap

¨  Private loans •  SCRA must be requested •  Some private loan servicers proactively apply SCRA benefits

•  Sometimes there mistakes (file a complaint)


Student loan benefits for servicemembers

§  0% interest for service in area of hostile fire ¨  Must be requested (very few ask for this benefit)

¨  Applies only to Direct Loans

§  Perkins loans forgiveness



Income-Driven Repayment (IDR) plans §  Monthly payments can be reduced based on income and

family size §  PAYE – caps monthly payments at 10% of discretionary

income §  If income is low enough (e.g., E-1) the monthly payment

could be $0/month



Public Service Loan Forgiveness (PSLF) §  Active duty servicemembers (and veterans) meeting certain

requirements may have the balance of their federal student loans forgiven after working in public service for ten years. ¨  10 years of qualifying public service- military counts.

¨  120 on-time payments

¨  Must have a qualifying loan (only Direct Loans and Direct Consolidation loans. ) •  Consolidating older loans may disqualify those loans for the 6%

SCRA interest cap



HEROES Act Waiver §  While are on “active duty,” ED waives many of the

documentation requirements attached to federal student loan benefits.

§  For example, if a servicemember is on an income-driven repayment plan and military service prevents them from providing updated information on family size and income, the servicemember can make a request to have the monthly payment amount maintained.



Military deferments §  Allows a servicemember to delay payments during certain

periods of military service. §  For private student loans - availability is at the discretion of

the lender



Veterans Total and Permanent Disability §  May qualify for discharge of student loans. §  VA has to determine that the servicemember is

unemployable due to a service-connected disability.


Inappropriate requirements for seeking SCRA

§  DOJ and the FDIC ordered Sallie Mae and Navient to ¨  Pay nearly $100 million

¨  To more than 77,000 servicemembers

§  Regulators determined that the companies were: ¨  Unfairly conditioning receipt of benefits under the SCRA upon

requirements not found in the law;

¨  Improperly advising servicemembers that they must be deployed to receive benefits under the SCRA; and

¨  Failing to provide complete SCRA relief to servicemembers after having been put on notice of these borrowers’ active-duty status

Consumer FinancialProtection Bureau

Questions & Discussion For more information, visit:

http://www.consumerfinance.gov/servicemembers/ Contact:

[email protected]

www.consumerfinance.gov/servicemembers

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Personal Finance Upcoming Events Lunch & Learn: Money Apps – A Review

•  Date: May 12, 2017 •  Time: 12 p.m. Eastern •  Location: learn.extension.org/events/3056

50 Interactive Personal Finance Learning Activities

•  Date: May 16, 2017 •  Time: 11 a.m. Eastern •  Location: learn.extension.org/events/2971

For more information on MFLN Personal Finance go to: https://militaryfamilies.extension.org/personal-finance

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militaryfamilies.extension.org/webinars

This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Military Family Readiness Policy, U.S. Department of Defense under Award Number 2015-48770-24368.

student loans & service members€¦ · consumer financial protection bureau 29 repaying...

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