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© 2013 PASFAA Private Loans vs. PLUS/Grad PLUS Loans Keri Neidig, Sallie Mae Julie Rehder, ELM Resources Heather Sperratore, PNC Bank (East) Patricia Peterson, PNC Bank (West) Heather Vincent, Citizens Bank PASFAA Spring Training 2013
© 2013 PASFAA Dispel Myths To gain greater understanding of the industry To empower your office with new knowledge Help Students and Parents Develop an understanding of all financing options available so they may choose the product that best suits their individual circumstances By providing comprehensive loan counseling By providing access to financing options Why do I need to know this?
© 2013 PASFAA Myth vs. Fact – Heather Vincent, Citizens Bank
© 2013 PASFAA Facts about Today’s Market Originations Did you Know? 93% of all new student loans are originated by the federal government? ($114 billion –Page R-15 Dept. of Ed Budget) Private lenders only originate 7% of today’s loans equal to $7 to $8 billion The Private Student Loan Market
© 2013 PASFAA MYTH: Government loans are always less expensive for borrowers than private loans. FACT: When measuring the true cost of credit through an APR comparison, private loans often compare favorably to unsubsidized federal loans, particularly Graduate PLUS Loans. Myth vs. Fact
© 2013 PASFAA MYTH: Private student loans are all variable products with extremely high interest rates. FACT: Most lenders offer students the choice of fixed-rate or variable-rate products. Myth vs. Fact
© 2013 PASFAA MYTH: Private student loans can pose more risk for borrowers than federal student loans. FACT: Federal loans, in contrast to private student loans, are provided without the most basic consumer protection – a determination of the borrower’s ability to repay. Myth vs. Fact
© 2013 PASFAA MYTH: Private loans do not offer forgiveness for death/disability and do not offer forbearance options. FACT: Private lenders do offer loan forgiveness for death/disability. Some lenders offer forbearance options for their borrowers. Myth vs. Fact
© 2013 PASFAA MYTH: Students and families do not receive adequate information about private student loan terms before borrowing. FACT: Lenders provide three notices containing 18 disclosure items about private loan terms at three different times before a private loan is made. These disclosures are required by law. The Federal Reserve conducted extensive consumer testing before establishing these new disclosure requirements, which have been in effect since February 2010. Myth vs. Fact
© 2013 PASFAA Private Loans vs. PLUS/Grad PLUS – Keri Neidig, Sallie Mae
© 2013 PASFAA Private vs. PLUS/Grad PLUS FeaturesPrivate Student Loan (Most Major Lenders) PLUS/Grad PLUS Fixed Interest RateAs low as 5.75% (Check Rates)7.90% Variable Interest RateAs low as 2.25% (Check Rates)Not available FeesUsually 0%4% TermUp to 25 years10 years Borrower Benefits0.25% - 0.50% IRR for ACH and or on- time payments; Graduation Rewards 0.25% IRR for ACH FAFSA RequirementNoYes SAP RequirementVaries by LenderYes Primary BorrowerStudent (w/co-signer) or Grad. StudentParent of student/Grad. Student
© 2013 PASFAA Private vs. PLUS/Grad PLUS FeaturesPrivate Student Loan (Most Major Lenders) PLUS/Grad PLUS Credit EligibilityLoan approval is based on credit. Students without sufficient credit are encouraged to apply with qualified cosigners. Student must not be in default on a federal student loan. No adverse credit (90 days or more delinquent on any debt). < than ½ time attendance Sometimes YesNo School Certification>95%Yes Past Due BalanceVaries by LenderNo Choice of repayment options Yes: Deferred, Interest only, full Principal & Interest Yes: Deferred or full Principal and interest
© 2013 PASFAA Private vs. PLUS/Grad PLUS FeaturesPrivate Student Loan (Most Major Lenders) PLUS/Grad PLUS Forbearance Options LimitedLiberal Loan ForgivenessThe loan will be forgiven in the unfortunate event of the student borrower’s death or permanent and total disability The loan will be forgiven in the unfortunate event of the student borrower’s death or permanent and total disability Debt Forgiveness for service in low income communities NoYes IBR, Graduated Repayment Varies by lenderYes
© 2013 PASFAA Let’s Hear from Some Schools – Heather Sperratore, PNC Bank (East) Patty Peterson, PNC Bank (West)
© 2013 PASFAA What Other Schools are Doing – Julie Moreno Rehder, ELM Resources
© 2013 PASFAA Providing objective comparisons Encouraging students to make the best choice for their particular situation Issuing RFP’s (although not required) Publishing Preferred Lender Lists Ceasing to auto-package PLUS/Grad PLUS Providing disclaimers on financing options What are other schools doing?
© 2013 PASFAA University of Mississippi: http://www.olemiss.edu/depts/financial_aid/Cred itBasedLoan.html http://www.olemiss.edu/depts/financial_aid/Cred itBasedLoan.html Texas Christian University: http://www.fam.tcu.edu/loans_ugrd_loan_compa re.asp http://www.fam.tcu.edu/loans_ugrd_loan_compa re.asp University of Maine: http://umaine.edu/stuaid/files/2010/03/Graduate -Lender-List-UMO9.pdf http://umaine.edu/stuaid/files/2010/03/Graduate -Lender-List-UMO9.pdf What Other Schools Are Doing
© 2013 PASFAA Some vendors in the marketplace: ELM Select 2.0 – new version provides greater interactivity for borrowers. These platforms provide students and schools: Comparison Tools Data Management Compliance Loan Comparison Tools
© 2013 PASFAA Educate them to become savvy consumers Provide them with the best available consumer information and financing options Network with colleagues at pair institutions Meet with lender partners to review their loan products Attend FSA conferences/review conference materials that pertain to private loans and PLUS loans How can I help my students?
© 2013 PASFAA Thank you to the following schools and organizations: CBA Education Funding Committee : www.cbanet.org/Advocacy/Issues/Student_Lending_Facts_Archive.aspx PA Spring Training West: Linda Anderson – Carnegie Mellon University, Joanna Hastings – Slippery Rock University, Janet Kaercher – Carnegie Mellon Tepper School of Business PA Spring Training East: Tom Stewart – Thomas Jefferson University, Chris Mowl – Elizabethtown College, Bernard McCree – Kutztown University Schools outside of PA: University of Mississippi (Ole Miss), Texas Christian University, University of Maine References
Private Loans vs. PLUS Loans Presented By: Michael McFarlane, Charter One/Citizens Bank Cheryl Barnes, Discover Student Loans Julie Rehder, ELM Resources.
© 2013 PASFAA The Value of Private Lender Lists and Keeping It Simple. Nancy Harvey – First Marblehead Julie Moreno Rehder – ELM Resources Robert Sevret.
© 2012 ELM Resources – Confidential Not for Distribution The Value of Private Lender Lists and Keeping It Simple Julie Moreno Rehder – ELM Resources Michael.
Presented by: Michael FullerFirst Marblehead Sonja McMullenSallie Mae Joe StatutoWells Fargo Bank
PLUS and Private Education Loans What’s right for each student? Understanding the differences and exploring the options for your office. Presenters Carolyn.
Sarah Pingel CAFAA Professional Development Seminar April 20, 2012.
Oh no! Student Loans WHAT YOU NEED TO KNOW ABOUT SERVICERS, REPAYMENT PLANS, PUBLIC SERVICE LOAN FORGIVENESS, AND RESOURCES.
The Real Cost of Your Public Health Degree Sponsored by the Association of Schools of Public Health Prudence Goss Emory University Rollins School of Public.
Consumer Bankers Association Education Funding Committee Presented by Michael McFarlane, Senior Vice President – Charter One Bank.
1 Financing Options Financial Aid 101 Mary Dyer, Default Prevention Specialist October 10, 2008.
Status Of Federal Student Loans Presented by: Trisha Malloy, Outreach Representative, FAME October 10, 2008.
New Aid Officer Training Loan Programs Presented By Drew Johnson Brown Mackie College Atlanta.
Private Loans: You’ve Got the Power!!. Agenda Meet the Presenters… Wise (and Not-So-Wise) Financing Options PLUS “and” Private Loan Comparisons Federal.
Loan Basics Angela Parkoff Financial Aid Advisor – Texas A&M New Aid Officers’ Workshop 2015.
FFELP Guide. Federal government. Borrower. School. Lender. Guarantor. Servicer. Secondary market. Seven Major Players in FFELP 2.
Student Loans 101 …….. how do you keep on top of all the changes?
College Board TRENDS IN STUDENT AID Total Aid Awarded $134.8 Billion Graduate & Undergraduate 51% or 69 Billion in Loans (FFELP and Direct) –Undergrad.
Loan Basics Julie Wittmis Financial Aid Advisor – Texas Woman’s University New Aid Officers’ Workshop 2016.
2014 Counselor Training Paying For College Strategies after all of the student’s “free” money has been exhausted.
Compare private loans and federal loans Identify the specific terms of your private education loan Assess your financial situation Examine consequences.
Student Loans And Credit: An Overview AASFAA 2014 Sedona, AZ.
Consumer Outreach – Special Issues – Student Loan Debt Wendy Badger, Chief Compliance Officer ECMC Group, Inc.
Confidential and proprietary information © Sallie Mae, Inc. All rights reserved. Tools for Financing Education Presented by Keri Neidig and Claudine.
Grants Are Not Enough. Presented By California Association of Student Financial Aid Administrators California Community.
Loan Basics Karen Trail and Julie Brumbaugh Texas Woman’s University 2015 ABC Workshop.
University of Wyoming – Delta Alpha Chapter Financial Literacy Student Loan Information.
Debunking the Myths of Financial Aid Information for students and parents.
Financial Aid for Medical School March 8th, 2014 Daniel Hewitt Director of Financial Aid – Virginia Campus.
NYSFAAA NYSFAAA Statewide Training Spring 2009 New Requirements for Exit and Entrance Loan Counseling.
Helping Financial Aid Professionals and Students Navigate the Alternative Loan Dilemma Brian Cox, First Marblehead/TERI Melissa Kunes, Penn State Session.
Financial Aid for Medical School Accepted Students Day April 12th, 2014 Jan Price Director of Financial Aid – Carolinas Campus.
Loan Repayment, Exit Counseling Deferment and Forbearance.
Student Loans and Debt Management Exit Interview Cheri Marks Financial Aid Coordinator Spring 2011 Disclaimer: All information and estimates are based.
Public Service Loan Forgiveness Program PRESENTED BY The Foundation for Financial Education A 501(C)(3) NONPROFIT ORGANIZATION.
Loans for College Understanding the Different Types of Get in 2 College, LLC.
Your future. Our Mission. Student Financial Assistance Office.
Mrs. Bogozan’s borrowed student loan PPT. 2 Free Application for Federal Student Aid = FAFSA Free Application for Federal Student Aid = FAFSA Term = Semester.
IN CONCERT ILLINOIS ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS ANNUAL CONFERENCE April 8 – 10, 2015 Embassy Suites, East Peoria, IL.
Bar Preparation and Bar Study Loans. Exam + Character and Fitness = License Deadlines –IN Feb: Nov 15 July: April 1 –IL: Feb: Sept 1 July: Feb 15 Cost.
Financial Aid Presentation. FSA ID https://fsaid.ed.gov Sign FAFSA electronically Only the owner should create a FSA ID Cannot use the same e- mail address.
STUDENT LOAN FUNDAMENTALS 2014 TASFAA NAOW Workshop May 12-14, 2014 – Arlington, Texas Tanya Vittitow Associate Director – UT Arlington.
STUDENT LOAN DEBT & POST GRADUATION. WHEN WILL PAYMENTS START COMING DUE? Student are expected to start making payments 6 months after graduation. Tips.
Hands on Banking ® Financial Education Paying for College © 2016 Wells Fargo Bank, N.A. All rights reserved.
1 Private Student Lending 101 May, iHELP provides Private Student Loans for undergraduate and graduate school, and consolidation loans for graduates.
STUDENT FINANCIAL SERVICES Graduate Financial Aid Information Session Debbie Davis, Assistant Director of Graduate Financial Aid.
LAUREN JONES, M.A., NCC VIRGINIA TIDEWATER CONSORTIUM’S EDUCATIONAL OPPORTUNITY CENTER Managing Student Loan Debt.
Student Loans And Credit: An Overview. Student Debt The Class of 2013 is the most indebted ever with 70% of graduates carrying an average debt of $35,200.
Presented by: Thomas Murphy Harvard University Employees Credit Union Medical School Loan Repayment & Building Credit PARTNERS OFFICE of RESOURCES for.
Winter Preview Financing Your WPI Education February 2010.
Money Management for Entering Medical School Students Entrance Interview Texas Tech HSC Fall 2014 Disclaimer: All information and estimates are based on.
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