Transcript WESTERN’S EXIT LOAN COUNSELING Student Loan Repayment As you prepare to graduate… Student loans are real loans— just as real as car loans or mortgages.

WESTERN’S
EXIT LOAN COUNSELING
Student Loan Repayment
As you prepare to graduate…
Student loans are real loans—
just as real as car loans or
mortgages and must be repaid.
It is important that you have as
much information as possible so
you can BE PREPARED!
When does repayment begin?
What should I do during my grace
period?
•Educate yourself about the
process.
•Know who is servicing or
holding each loan.
•Calculate your estimated
monthly payment.
•Know when your first payment
is due.
•Pick a repayment plan that
right for you.
•Sign up for automatic debit.
•Consider loan consolidation.
How much have you borrowed?
www.nslds.ed.gov
Your Loan Information on NSLDS
Select each loan to view more specific information.
Who is my servicer?
Connect with your servicer NOW?
Create an
account with
your servicer.
The Master Promissory Note
you signed is a BINDING
LEGAL DOCUMENT.
Your MPN listed the terms
and conditions under which
YOU AGREED TO REPAY your
student loans.
It also explained your rights
and responsibilities.
Borrower Responsibilities
• Complete Exit Loan Counseling .
• Repay your loan according to the terms of your
repayment schedule even if you are unable to find
employment after graduation.
• Notify your servicer of any changes in:
• Name
• Address or Phone Number
• Employer
• Employers Address or Phone Number.
I’ll just declare bankruptcy.
Can’t do it!
It is very rare
for student
loans to be
discharged in
bankruptcy.
What if I don’t pay my loans back?
CODE OF FEDERAL REGULATIONS (CFR)
PART 685—WILLIAM D. FORD FEDERAL DIRECT LOAN
PROGRAM
Subpart B—Borrower Provisions
Sec. 685.211 Miscellaneous repayment provisions.
(d) Default.
(1) Acceleration. If a borrower defaults on a Direct
Loan, the entire unpaid balance and accrued interest
are immediately due and payable.
(2) Collection charges. If a borrower defaults on a
Direct Loan, the Secretary assesses collection charges
in accordance with Sec. 685.202(e).
(3) Collection of a defaulted loan. (i) The Secretary may
take any action authorized by law to collect a defaulted
Direct Loan including, but not limited to,
• filing a lawsuit against the borrower,
• reporting the default to national credit bureaus,
• requesting the Internal Revenue Service to offset
the borrower's Federal income tax refund, and
• garnishing the borrower's wages.
There is NO REASON to default on your student
loan debt even if you are un- or under employed.
STUDENT
LOAN
REPAYMENT
PLANS
Repayment Plan Overview
The repayment plans and options discussed
today are available to Federal loan borrowers
(FFEL and Direct).
As you think about
repayment plans, keep in
mind…
the less you pay each
month,
the longer you’ll have to
pay.
And…the more you will pay
in interest over time.
Standard Repayment Plan
Under this plan, you will make fixed monthly
payments for a period of 120 months (10 years).
Standard is the automatic repayment plan.
Graduated Repayment Plan
Under this
plan, your
payments will
start low and
increase every
two years over
a period of
120 months
(10 years).
Extended Repayment Plan
Under this plan, you will make fixed (or
graduated) payments for 12 to 25 years.
You must
have at least
$30,000
in FFEL
loans or
$30,000 in
Direct loans.
Let’s compare the three plans.
$31,000
Borrowed
Standard
Graduated
Extended
Months
120
120
Up to 300
Payment
$356.75
$244.95 up to
$535.12
$215.16
Total Interest
$11,809.88
$14,122.23
$33,548.71
Total Cost
$42,809.88
$45,122.23
$64,548.71
No Money…
No Problem
If you can’t make your payments…
Contact your servicer IMMEDIATELY!!
Your servicer can help by
providing REALISTIC options
that will help keep your loans
in good standing.
Think of your
servicer as your
Best Friend!!
(Hopefully not forever.)
Income Based Repayment (IBR)
Advantages of IBR
• Monthly payments are based on your income and family size and
capped at the 10-year standard repayment amount.
• Once you qualify for IBR, you cannot be kicked out of the plan.
• Your payment will be adjusted each year based on changes to your
income and family size. (Must provide documentation every year.)
• Payments are usually lower than they are under other plans.
• After 25 years, your remaining balance will be forgiven.
Apply online at www.studentloans.gov
Can I put repayment on hold?
The law says, if you are…
you are ENTITLED to a deferment.
Student Loan Deferment
During an authorized deferment,
you DO NOT need to make payments on
your student loans.
In addition, the government
will pay the interest on your
SUBSIDIZED loans.
Deferments are not automatic.
You will need contact your
servicer (BFF) to apply.
Forbearance
If you can't make your scheduled loan payments, but don't
qualify for a deferment, your loan servicer (BFF) may be able to
grant you a forbearance.
Teacher Loan Forgiveness
If you teach full-time for five complete and consecutive
academic years in certain elementary and secondary schools
and educational service agencies that serve low-income
families, and meet other qualifications, you may be eligible
for loan forgiveness.
Up to $5,000 of the total loan amount
outstanding after completion of the
fifth year of teaching.
up to $17,500 for elementary or
secondary special education teachers
and secondary math and science
teachers.
Perkins loan cancellation of up to
100% for…
Service in the U.S. armed forces.
Full-time firefighter.
Full-time nurse or medical technician.
Full-time employee of a public or nonprofit child- or familyservices agency.
Full-time staff member in the education component of a
Head Start program.
Full-time staff member in a prekindergarten or child care
program.
Full-time special education teacher of children with
disabilities.
Full-time teacher of math, science, foreign languages,
bilingual education, or other fields designated as teacher
shortage areas.
Public Service Loan Forgiveness
Public Service Loan Forgiveness
• You must make 120 on-time, full, scheduled, monthly
payments.
• You must make payments under a qualifying repayment
plan (Income Based Repayment).
• When you make each of those payments, you must be
working full-time at a qualifying public service
organization.
Only Federal Direct Loans are
eligible for PSLF.
If you have FFEL loans, you may
consolidate them into a Direct
Consolidation Loan to take
advantage of PSLF.
Do your research before you decide.
Beware of
consolidating your student
loans with a private
company.
You will likely lose many of the
options available with Federal
Consolidation loans like...
Income Based Repayment
Deferment
Forbearance
Loan Forgiveness
Having problems with your lender?
The Student Aid Ombudsman helps resolve disputes and
solve other problems related to federal student loans.
www.ombudsman.ed.gov
GOOD CREDIT
What’s the difference?
BAD CREDIT
As you leave Western…
Complete Exit Loan Counseling
www.studentloans.gov