Transcript Document

2012
G
General Audiences
All ages admitted. No content that would be objectionable to
most parents. Polite language. No swearing. Only mild violence.
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Bill Mack
Associate Director of Financial Aid
University of Texas at Dallas
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Federal Insured Student Loans (FISL)
Guaranteed Student Loan (GSL)
Auxiliary Loans to Assist Students (ALAS)
Supplemental Loan for Students (SLS)
Federal Family Education Loan Program
(FFELP)
Robert T. Stafford Loan Program
William D. Ford Federal Direct Loan Program
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www.studentloans.gov
Entrance Counseling
First-time borrowers
Inform them of their rights and responsibilities of taking out this
loan
www.nslds.ed.gov
Exit Counseling
All borrowers that depart from your institution
Graduate, withdraw, transfer, do not return
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• The school is required to notify the
borrower that a loan disbursement has
been made, and that the borrower may
reduce or cancel the disbursement
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Document executed by borrower, which
spells out the terms & conditions of
the loan disbursements, use and
repayment
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If the note is for multiple loan periods
and varying amounts, the school
may elect to have the borrower use a
Master Promissory Note
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Oldest active educational loan
• Institution administers this loan
• Previous allocations came from the Dept of
Ed, now schools operate this loan from
repaid funds
• Fixed 5% interest rate
• Repayment begins 9 months after student
ceases to be enrolled at least 1/2 time
• Minimum payment as low as $30
• Maximum repayment term is 10 years
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Undergraduate annual limit
$5,500
Underclassman (first two years) Aggregate limit
$11,000
Undergraduate Aggregate limit
$27,500
Graduate annual limit
$8,000
Graduate Aggregate limit
$60,000
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•
Federal PLUS Loan is a loan for parents of
dependent students
• Parent borrower is fully liable for loan
• FAFSA is required, but not based on need
• Eligibility
• Borrower must be the natural or adoptive parent of the student,
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or spouse of one of those people (step-parent can borrow if
he/she is included in the FAFSA)
Borrower must be a US Citizen, U.S. National or eligible noncitizen
Borrower must have no Title IV loans in default
Borrower must be credit worthy, or have credit worthy endorser
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• No Annual limit, other that COA minus Aid
• No Aggregate limit
• If the parent is not eligible, the student may
borrow a Stafford Loan using the independent
student limits.
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• Eligibility
• Borrower must complete a FAFSA, not need-based
• Eligible graduate student attending at least halftime
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Borrower must pass a credit evaluation (or have
an eligible “endorser”.
• Annual Loan Limit
• COA minus other aid
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No aggregate maximum
7.9 percent fixed interest. 4% Origination fee.
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• Eligible student in an eligible program at an
eligible institution (per General Provisions)
• Enrolled at least 1/2 time
• COA-aid= greater than zero
• COA-EFC-aid=greater than zero for subsidized
loan
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Subsidized DL
Unsubsidized DL
(Need-based)
(Non need-based)
Interest:
Interest:
ED pays during
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Student responsible for all
In-school
• Can be capitalized, or
• Student can choose to pay
Grace
Deferment
interest while enrolled
* Student pays during
• Repayment
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Year in School
Dependent Student
Independent Student
First Year
Undergraduate
Total DL $5500*
Total DL $9500*
Second Year
Undergraduate
Total DL $6500*
Total DL $10,500*
Third Year &
Remaining
Undergraduate
Total DL $7500*
Total DL $12,500*
Graduate Student
k
Total DL $20,500*
*No
more than $3500 Sub may be awarded for First Year Student, No more
than $4500 Sub for 2nd year students, no more than $5500 Sub for 3rd year
+ undergrad students, no more than $8500 Sub for grad/prof students
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*As of July 1, 2012
Graduate students will no
longer be eligible for
subsidized Stafford Loans.
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Combined
Sub & Unsub
Sub may not
exceed
Undergrad
Dependent
$31,000
$23,000
*Undergrad
Independent
$57,500
$23,000
Grad and
Professional
$138,500
$65,500
* And dependent student whose parent is unable to obtain a
PLUS loan; denial of parent’s PLUS produces add’l unsub
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Must occur when an undergraduate student’s
academic program is less than 1 year in length
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Must occur when a student is completing a
remaining period of enrollment that is
less than one academic year
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Standard proration formula: Amount of DL
student could have for grade level ÷ 24 x
number of enrolled hours
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Perkins Loans – no fees
• Fixed interest = 5% (no interest while enrolled or when in
grace period)
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Direct Loans – 1% origination fee
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0.5% rebate
Undergrad sub = fixed interest of 3.4%
Graduate sub and unsubsidized = fixed interest of 6.8%
Direct Parent PLUS / Grad PLUS – 4% origination
fee
• 1.5% rebate
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fixed interest = 7.9%
To retain rebates,1st 12 pymts must be on time
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• As of July 1, 2012 the borrower will be charged
the full origination fee at disbursment.
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• Subsidized Stafford interest
• 7/1/98-6/30/06 2.36 (varies annually)
• 7/1/06-6/30/08 6.8 fixed
• 7/1/08-6/30/09 6.0 fixed
• 7/1/09-6/30/10 5.6 fixed
• 7/1/10-6/30/11 4.5 fixed
• 7/1/11-6/30/12 3.4 fixed
• 7/1/12- ?
6.8 fixed
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Federal education loans that may be consolidated
* FISL
*FFELP
*Direct Loans
*National Direct Student Loans
*PLUS
*Perkins
*Nursing Student Loan
*Health Education Assistance Loan (HEAL)
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Thirty-year repayment (maximum)
 Interest rate will be a fixed interest rate, capped at
8.25%
 A weighted average is used to figure the interest rate
and then it is rounded up to the nearest 1/8 of a
percent.
* A consolidation loan can “cure” a defaulted federal student
loan.
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• Stafford
• Begins at the end of grace period (6 months after the
borrower drops below half-time enrollment)
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Parent PLUS loan
• Enters repayment after the full disbursement for the year
• Optional-parent can request deferment while student is
enrolled at least half-time and during six months following
that – up to 25 years to repay)
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Grad PLUS loan
• Six months after borrower falls below half-time enrollment
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Single information source for all federal
loans – loan holder info, amounts owed
including interest accrual
www.nslds.ed.gov
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Standard – Monthly payment remains consistent for 10 years
Graduated – Monthly payments are lower at first but then
increase every 2 years over the 30 yr repayment term
Income-sensitive – Monthly payments are based on your
monthly gross income
Extended – Monthly payments over a 25 year plan.
Income Contingent – pymts based on annual calculations and
adjusted so as not to cause “undue hardship”;
(25 yr forgiveness)
Income Based Plan - Monthly payments will not exceed 15% of
the amount by which your adjusted gross income exceeds
150% of the poverty line for your family size.
(25 yr forgiveness)
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Period of postponing payments
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Entitlement
Federal government will pay interest for the
borrower on Subsidized DL
Some possible deferments:
- Education
- Peace Corps/ Public Service/ Military
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Temporary cessation,
reduction, or extension of
payments
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Student is responsible for
interest that accrues
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Borrower is willing but
temporarily unable to pay
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• Failure to meet the terms of the promissory note
• Failure to repay
• Failure to attend
• Borrower is considered to be in default after
being delinquent for 270 days
• Borrower is subject o wage garnishment, seizure
of income tax refunds, lottery winnings, license
non-renewal, sued by DOE
• Student not eligible for federal financial aid
• Damage to the borrower’s consumer credit score
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• Satisfactory Repayment Arrangements
• Six on-time voluntary payments
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Rehabilitation
• Nine on-time voluntary payments
• Consolidation
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Includes DL loans, and loans underlying DL
consolidation loans
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CDR = % of borrowers who enter repayment in a
given federal fiscal year who then default
within the next 3 fiscals years
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High rate has consequences for schools
• >15% = loss of 1 installment/semester
• >15% = 30 day hold on 1st time, 1st year borrowers
• > 40% = loss of participation in Title IV funding
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• Interest rates are usually variable
• Origination and repayment fees vary
• Co-borrower requirements (underwriting)
• Most require school-certification
• International students
• SAP ineligible
• Non-degree students
• Reached federal aggregate maximum
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Bill Mack
[email protected]
972-883-4795
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