Transcript Congratulations Class of 2007! From: the Financial Aid

Congratulations
Class of 2013!
From:
The Financial Aid Office
Team
(Atheia, Jacqui, Kristin, Melissa, Sean, Sue, Tom, Usha)
1
Exit Interview Goals

BASICS
Rights/responsibilities
 servicer requirements
 Verifying the accuracy of your debt


STRATEGIES
Repayment Hierarchy & overall strategies
 What to do/when to do it
 Forbearance or Income Based Repayment or
something else??
 Consolidation
 Tax Benefits
 Don’t Default!!

2
Loans to cover
1) Institutional loans


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
TJU loan
Alumni loan
Perkins loan
PCL
Donor named
2) Stafford
3) Grad PLUS
4) Private alternative loans
3
What do you need to submit from the
packet???



Statement of Attendance
Survey – we will email you a Survey
Monkey link
NEED TO COMPLETE THE ONLINE
VERSION AT WWW.NSLDS.ED.GOV
4
TJU Debt Record




Includes the aid you received in each
academic year
Includes any aid you may have received
while enrolled at TJU
Loans reflect Principal amount only –
payments & interest are not reflected
Bottom of sheet tallies your loans total
principal debt by Banner code – various
codes used while you have been
enrolled. Don’t let this confuse you.
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Institutional & Institutionally
administered Loans
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Federal Perkins Loan
Alumni Loan, Simpson Loan, Levi Loan, TJU Loan etc.
Federal PCL and LDS
Serviced by Xerox/ACS, Inc.
http://acs-education.com
Mailing of payments to:
With coupon:
Xerox Educational Services
PO Box 3295
Milwaukee, WI 53201-3295

(800) 826-4470
Without coupon:
ACS, Inc – CPS Monetary Processing
PO Box 7061
Utica, NY 13504-7061
All institutional loans get repaid to the University via Xerox (ACS)
Your TJU contact person:
Rebecca Reynolds
1020 Walnut Street, Room 521
Philadelphia, PA 19107
(215) 503-7226
[email protected]
6
TJU Repayment Schedule
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Lists when your payment starts
What the monthly payment will be
What the repayment period is
What the interest rate is
How much interest will accrue over
life of loan
What your total loan cost will be
(interest and principal)
7
Jefferson is the lender for….


Institutional loans (e.g., TJU Loans,
Alumni Loans, Morgan Loan etc.)
Certain Federal Loans



Federal Perkins
Federal Loans for Disadvantaged
Students
Federal Primary Care Loans
8
Jefferson Loan Parameters

TJU Loan, Alumni Loan, Donor named
loan–

12 month grace only



10 year repayment
Fixed 5% interest rate


(note: Wayland, Robt. Wood Johnson, Sledd Cunnison loan
have deferment options beyond Grace period)
Wayland, Kellogg, Snyder, Bacharach, and Robt Wood
Johnson have reduced interest rates.
Cancelled upon Death/permanent disability
Jefferson is your lender
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Federal Perkins Loan Parameters

Federal Perkins –






9 month grace
Forbearance is permitted
6 month grace before repayment begins
10 year repayment
Fixed 5% interest rate
Cancelled upon Death/permanent disability
Jefferson is your lender
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Federal LDS Loan Parameters

Loan for Disadvantaged Students
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
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
12 month grace
Deferment is permitted for 3 yr
Residency
10 year repayment
Fixed 5% interest rate
Cancelled upon Death/permanent
disability
Jefferson is your lender
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Federal PCL Loan Parameters

Primary Care Loan


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

12 month grace
Deferment is permitted for 3 yr Residency
10 year repayment (20 years max if
requested depending on loan amount)
Fixed 5% interest rate
Cancelled upon Death/permanent disability
Has requirement to work in Primary Care (as
defined in promissory note) while loan is in
repayment
Jefferson is your lender
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Federal Stafford Loan (FFELP/Direct Loan)

6 month grace period

Eligible to apply for Forbearance

Can be consolidated with Grad PLUS, Perkins,
LDS

If borrowed after 7/1/06 – rate is fixed
6.8%; Rate is variable if borrowed before this
date and NOT consolidated.

10 year repayment – can ask for longer
repayment period

Cancelled upon Death/permanent disability
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Federal Graduate PLUS

No grace period (check with servicer- many
grant auto-forbearance for 6 mths to align
with Stafford)

Eligible to apply for Forbearance just like
Stafford

Can be consolidated with Stafford, Perkins,
and LDS

Loan is fixed 8.5%; 7.9% if borrowed from
Direct Loans (2010-11 & after)


10 year repayment – can ask for longer
repayment period- (see loan repayment
slide)
Cancelled upon Death/permanent disability
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Private Alternative Loans



Usually 6 to 9 month grace (interim) period
Most deferred for at least 3 years during
residency – read promissory note or call lender
to check parameters on length of deferment and
necessary documentation of internship/residency
Interest rate will change as frequent as the index
used (LIBOR up to 4 times a year or whenever
PRIME rate changes)

there is usually no ceiling on the interest rate.

Not cancelled upon death or permanent
disability
15
Finding Your Federal Loans
To access, provide:
- SS#
- Date of Birth
- First 2 letters (last name)
- PIN # (www.pin.ed.gov)
www.nslds.ed.gov
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NSLDS



Lender – who lends the money
Guarantor – who guarantees the funds
to the lender if you do not repay
Servicer – MOST IMPORTANT – they
have processed your loan, disbursed
the funds and will be collecting your
payments and working with you on
deferment/forbearance
17
Contact all of your loan Servicers
REQUIRED!


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45 days before or after your last date of
enrollment
Update your address
Confirm when your Grace period begins and
ends and when first payment is due!!!
Confirm when you should submit your
Forbearance form (for Stafford and Grad
PLUS)
Confirm your repayment amount
Call first - then follow up in writing if you
think this is necessary – keep copy of
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written letter for your file
Forbearance
•
•
Mandatory that servicer grant forbearance for duration
of residency. Forbearance available throughout
residency for Stafford, Grad PLUS and
Consolidation loans
Application required at least annually-some lenders
require a form, most will take your request on phone
•
Borrower MUST ask for it
•
Interest accrues and may capitalize on all loans,
subsidized and unsubsidized – confirm with your
servicer
•
Use only after you have exhausted your grace period
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Dates To Remember- What to do and
when to do it!

If you have consolidated any loans, you have used the grace
period and repayment will start immediately at graduation
(check with servicer for exact date). Federal Grad PLUS
loans have no grace period as well (check with servicer to
confirm options as immediate forbearance).


If you used the full 6 month Grace period (between college
and TJU, leave of absence) you do not get this again

FILE FORBEARANCE FORM (if form is necessary) 2 - 4
WEEKS BEFORE REPAYMENT DUE DATE

If no consolidation or if loan was never in repayment, 6
month grace period still exists.
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Repayment Hierarchy




Review all of your debt – include credit
cards, car loans etc.
Calculate which is the most expensive
using interest rate, repayment terms
etc.
Start making voluntary payments to
the most expensive first
Perkins/institutional loans – cheapest
during 1st year while interest is
subsidized
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Current Repayment Options
1.
2.
3.
4.
5.
6.
7.
Standard (Level) Repayment
Extended Repayment
Graduated Repayment
Income Sensitive Repayment – FFELP only
Income Contingent – Direct Loans only
Income Based Repayment – FFELP and
Direct Loans – NEW 7/1/09
Pay As You Earn (PAYE) – New 12/2012
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Loan Repayment Plans
Standard (Level)
Level monthly payments over 10 year period
Higher monthly payments
Lowest overall cost
Extended
Available to new FFELP & Direct Loan borrowers*
Fixed or graduated monthly payments
Repayment term of 25 years.
*Must have an outstanding balance of more than $30,000 in Stafford Loans on or after October
7,1998
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Loan Repayment Plans
Graduated
Payments start low, increase usually every two years
FFELP – must have more than $30,000 outstanding
DL – monthly payment calculated based on DL debt and interest
rates of loans; never less than monthly interest accrual
Higher overall cost - Good for early cash flow, but remember cost!
Income Sensitive - FFELP Program Only
Payments tied to income
Finish in 10 years (may be extended to 15 years)
Income Contingent - Direct Loan Program Only
Monthly payment amount calculated based on borrower’s
household income, family size, and total Direct Loan debt.
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Loan Repayment Plans
Income Based Repayment (IBR)
•
•
•
•
•
caps loan payments at 15% of your household income that
exceeds 150% of the federal poverty guideline for your family
size
payment amount will change with increase in income
25 years repayment period
Calculation includes ONLY Federal education loans - cannot
include Perkins or LDS unless you have had these loans
included in a Federal Direct Loan consolidation
Must provide income verification (W2s, tax returns, paycheck
stub, employment contract). *DEPENDING ON SERVICER*
Any balance remaining after 25 years is forgiven but
25
amount is considered taxable!!!
Loan Repayment Plans
Pay As You Earn Plan – 2012


Direct Loan Program only
For new borrowers only: You are a “new Borrower” if you
 Have no Direct or FFEL loans as of 10/1/2007
and
 Received a Subsidized, Unsubsidized, or Grad PLUS loan
disbursement on or after 10/1/2011, or a Direct Consolidation* loan
based on an application received on or after 10/1/2011.
 *Exception: You are not a new borrower for the PAYE plan if
you consolidated loans that otherwise made you ineligible, i.e.,
loans made prior to 10/1/2007
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Loan Repayment Plans
Pay As You Earn Plan – 2012 (continued)


Modeled on IBR, incorporating statutory IBR changes scheduled
to take effect for new borrowers in 2014
Under Pay As You Earn, borrowers pay the lesser of:
 10% of discretionary income (income-based payments) or
 What they would have paid under the 10-year standard
repayment plan (non-income-based payments)
 Must demonstrate Partial Financial Hardship (PFH):

20 year repayment period then cancelation/forgiveness of
remaining balance. Forgiven portion is taxable.
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More information available at StudentAid.gov/PayAsYouEarn
Income-Based Repayment
Formula
for a Partial Financial Hardship (PFH):
Standard payment*
$2,130 / mo*
>
IBR payment
$410 / mo
More likely when income is low and debt is high
 Max payment in IBR is the Standard amount*
 1st post-M.D. year median stipend is $48,700**

•As originally determined when calculating Partial Financial Hardship based on $185,000 entering
repayment
•($162000 total education debt plus $23,000 of capitalized interest from 4-years of school and 6months of grace).
•**Preliminary data from AAMC Survey of R/F Stipends and Benefits and AAMC Analysis
Income-Based Repayment
Benefits
1.
Partial interest subsidy during the first 3
years
2.
Unpaid interest does not capitalize when:
3.
1.
Annual paperwork is filed timely
2.
Borrower demonstrates a PFH
Possible loan forgiveness
*As reported to the IRS. Annual verification required of both AGI and family size
Income-Based Repayment
To enter IBR, borrower must
•
Contact each servicer individually to request
•
Give access to household AGI* (tax records)
•
Inform servicer(s), annually, of family size
•
Demonstrate a Partial Financial Hardship
(PFH)
*As reported to the IRS. Annual verification is required of both AGI and
family size.
Income-Based Repayment Chart
IBR Monthly Payment Amount 2009
Family Size
Annual
Income
1
2
3
4
5
6
7
$10,000
$0
$0
$0
$0
$0
$0
$0
$15,000
$0
$0
$0
$0
$0
$0
$0
$20,000
$47
$0
$0
$0
$0
$0
$0
$25,000
$109
$39
$0
$0
$0
$0
$0
$30,000
$172
$102
$32
$0
$0
$0
$0
$35,000
$234
$164
$94
$24
$0
$0
$0
$40,000
$297
$227
$157
$87
$16
$0
$0
$45,000
$359
$289
$219
$149
$79
$9
$0
$50,000
$422
$352
$282
$212
$141
$71
$1
$55,000
$484
$414
$344
$274
$204
$134
$64
$60,000
$547
$477
$407
$337
$266
$196
$126
$65,000
$609
$539
$469
$399
$329
$259
$189
$70,000
$672
$602
$532
$462
$391
$321
$251
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Income-Based Repayment
Online IBR
Calculators
www.finaid.org
www.IBRinfo.org
www.aamc.org/FIRST
Determined by
Calculating
15% of income that
exceeds 150% of the
poverty line for a
borrower’s family size
SEE FAQ in PACKET or
also located at
www.ibrinfo.org32
The most feasible options during
residency:
Pay Later (using Forbearance)
Pay Now (using Income-Based
Repayment)
Repayment Plan Comparison
Determines
the payment
amount
&
interest
cost
10 Year Public Service Loan
Forgiveness
•
•
•
•
•
•
Must work for a non-profit organization under section
501(c)(3) of IRS code that is exempt from taxation under
section 501(a) of the IRS code – includes most not-forprofit private schools, colleges, and universities. Each of
the 120 payments must have been made during a period
of qualifying employment
Must make 120 monthly payments under qualifying plan
Only available to those who have loans under the Direct
Loan Program (consolidation may be necessary)
After 120 qualifying payments, your remaining balance can
be forgiven; Payments do not need to be consecutive
Must self document
Amount forgiven is NOT taxable under PSLF
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10 Year Public Service Loan
Forgiveness
•On January 31, 2012, the Department released a voluntary
Employment Certification Form that borrowers can submit to the
Department for a determination of whether their employment and
payments qualify for PSLF
• Borrower has employer complete employment verification section
• Borrower submits form to FedLoan Servicing (regardless of who
current servicer is)
• FedLoan Servicing determines whether employment qualifies
• If employment qualifies, borrower’s loans are transferred to FedLoan
Servicing, for a determination of how many qualifying payments were
made during the period of employment
• Borrowers loans remain at FedLoan servicing permanently
•Borrower can submit the form as often as annually
For more, including Q&As, see StudentAid.gov/PublicService
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Pros and Cons of Public Service
Loan Forgiveness Program
•
Will federal funding be available in 10 years??
•
Will you be required to make career decisions regarding
where you work based on program??
•
Do you have the financial ability to make loan payments
as a resident when payments and income are lowest for
you??
•
How much federal debt will remain for forgiveness after
10 years??
•
Will you have more income potential over a lifetime in
the private sector than what would be forgiven in this
program???
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Consolidation Fast Facts




Consolidation takes many federal loans
and combines into one loan, one set of
new terms, with one lender
Interest rate is determined by
calculating the weighted average (+1/8
point) of all loans being consolidated –
interest rate is fixed.
Have option of consolidating all federal
loans or only some– or none at all
Only one agency offering Consolidation

www.loanconsolidation.ed.gov
38
Consolidation
When to consider consolidation:
Variable rates are low
Multiple servicers to repay
To obtain Public Service Loan Forgiveness
(DL)
To make Perkins or LDS loans eligible for
IBR
39
When to Consolidate





If you consolidate before your grace period is exhausted,
you lose the remaining grace period. (Don’t consolidate
in June)
Start consolidation 40-60 days prior to first payment
Can be done online (debt from NSLDS is integrated)
If consolidation is not complete before first payment is
due, apply for forbearance on all loans included in the
consolidation so no payment is necessary (don’t make
any payments after you have started the application).
Once consolidation is done, a new forbearance on the
consolidated loan would need to be filed.
40
Paying Loans Off Early
You
can prepay your federal student loans
with no penalties.
make
payments towards the highest cost
unsubsidized loans that may have the
most frequent capitalization.
Unless otherwise noted, loan payments typically are
applied first toward collection costs (attorney’s fees, etc.),
then interest, and finally principal
41
Loan repayment programs






Military
NHSC
Pennsylvania
Delaware
NIH
Other – see AAMC resource at
http://services.aamc.org/fed_loan_pub
42
Tax Benefits



Lifetime Learning Credit
Deduction for student loan interest
payments
Tuition and Fee
43
The Taxpayer Relief Act of 1997
Student Loan Interest
Full Deduction
Partial
Deduction
NO Deduction
Single
$60,000 or less
$60,001 to
$74,999
$75,000 or
more
Married
filing
Jointly
$120,000 or
less
$120,001 to
$149,999
$150,000 or
more
Student loan interest deduction max $2,500 per
year
Voluntary payments may be eligible
Capitalized interest may be included
www.irs.gov/publications/p970
Mortgages




The Financial Aid Office is not the “lender” of
any of your loans. Therefore I/we cannot
state anything in writing that indicates your
eligibility to postpone your loans.
Feel free to take anything already in print
from the packet or the book
Or contact your servicer directly.
See the Common Manual handout for info
on Mandatory Forbearance
45
IMPORTANT TO REMEMBER!!!!












Don’t default – don’t ignore your debt
After 270 days late, servicer assumes you will not pay
Servicer can garnish your wages and tax refunds
Servicer can sue - you are responsible for costs
Collection agencies take over
Default is recorded on Credit Report
School can withhold records
Professional Licenses are pulled in a growing number
of states
Student loans rarely discharged in bankruptcy
Keep all your servicers updated as to phone numbers,
address, change in residency status
Call your servicer if you need help
Call Financial Aid Office – we are here to help for as long as
46
you need it
Student Loan Ombudsman

The student can contact the Ombudsman’s office if unable
to resolve any loan difficulties with the school, lender,
servicer or guarantor. The contact information for the
Student Loan Ombudsman’s Office is:
Office of the Ombudsman
Student Financial Assistance
U.S. Department of Education
FSA Ombudsman
830 First Street, NE
4th Floor
Washington, DC 20202


Customer Service Line (877) 557-2575
Website: http://ombudsman.ed.gov
47
Summary






Reconcile your records to the Financial Aid Office
records to your servicers records
Contact your servicers to update address/phone
number etc.
Find out when the grace period starts and ends
and when first payment is due and then ask how
soon before you should file your forbearance
request. DON’T SUBMIT TOO EARLY!
Make schedule and submit all paperwork when
necessary or make payment by due date if not
forbearing.
Don’t wait until last minute to get your finances in
order. Know what you have!
Ask questions.
48
University Office of Student Financial
Aid
1025 Walnut Street, Room G-1
Philadelphia, Pa 19107
[email protected]
215-955-2867
If you need an appointment, call the
office to schedule a time!!
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