Presentation on theme: "Wednesday, March 21 st from 6 – 7 PM at Bourne Hall Financial Aid Informational Seminar “What you need to know during the clinical terms” Clinical Terms."— Presentation transcript:
Wednesday, March 21 st from 6 – 7 PM at Bourne Hall Financial Aid Informational Seminar “What you need to know during the clinical terms” Clinical Terms Bridge & Residency/Relocation Loans Loan Repayment Options Loan Payment Relief Options
Clinical Terms Federal Changes Clinical Start Time Line Satisfactory Academic Progress (SAP) Budget Bridge Time (No rotations) How time off effects your loan disbursement Processing of your refund
Changes to Federal Loan Benefits Effective July 1, 2012 –Subsidized portion of loan eliminated for graduate level students –Interest will begin to accrue on your new loans as of the disbursement date –Does not impact your existing federal loans –Origination Fees increase to 1% for Stafford loans and 4% for GPLUS
Students must have filed for a Leave of Absence if student has not begun clinical term 1 Students must request an extension to Leave of Absence if student has not begun clinical term 1. Student will need to contact servicers to have loans returned to be placed back into “in school” deferment status * May 14, 2012October 1, 2012 Anytime Student returns to school after December 12, 2012 December 12, 2012 Student leaves Grenada to study for USMLE 1: Time line starts Student loans are considered to be in a deferred status during this six month period (May 14 th – December 12 th ) Six Months Loans will no longer be in deferred status, grace period would have been used up and repayment period begins. Student must contact their servicers to apply for Income based repayment (IBR) The Leave of Absence keeps your loans in deferment for up to 6 months Clinical Start Time Line * Hope to be participant in National Student Clearinghouse by July 1, 2012- would be able to electronically request deferment
Satisfactory Academic Progress (SAP) Federal regulations require that students who are not in good academic standing are ineligible for federal loans Not making academic progress means Do not have a cumulative GPA of at least a 2.00 Have not been removed from academic probation within one academic year Do not have a cumulative GPA of at least a 2.50 by the end of Term 5 Are not meeting the timeline requirements (started clinical training within 3yrs of matriculation)
You must contact your Financial Aid Counselor as taking time off will effect the disbursement of your loans. Each term is 16 weeks of actual rotations NOT calendar weeks. Time off from Rotations – Bridge Time
Up to 20 weeks of bridge (vacation) time per year. If you do not schedule another rotation within 30 days of last rotation you must request bridge eligibility or a Leave of Absence. –If you don’t you are considered not enrolled and loans go into grace/repayment –Financial aid may be reduced –Cannot receive more than 1 ALOA in a 12 month period Time off from Rotations – Bridge Time
FromToWeeksTotal rotation weeks to date RotationsHospital 08-13-201209-21-201266Core Clerkship in PsychiatryRichmond 09-24-201211-02-201266 *BridgeN/A 11-05-201212-14-2012612Core Clerkship in Ob/GynRichmond 12-17-2012 **01-25-2013618Core Clerkship in PediatricsRichmond 01-28-201304-19-20131230Core Clerkship in SurgeryLutheran 04-22-201307-19-20131242Core Clerkship in Medicine Richmond * Bridge time does not count towards the 16 weeks of required rotations to complete the term. ** A new clinical term may start in the middle of an ongoing rotation. The start of a new rotation does not mean the start of a new term. In this example student is in currently in Term 1 and would start Term 2 in the middle of his Core Clerkship in Pediatrics. How time off effects your loan disbursement 01-14-2013
Processing of your Refund Funds disbursed 10 days prior to start of the term Refund issued approx. 3 business days after funds are credited to student account Direct Deposit available for expedient posting of funds to your bank account – instructions available on MY SGU Refunds are sent to your mailing address unless you have set up direct deposit Questions regarding refunds, account balance or direct deposit should be addressed to Student Finances. Email: firstname.lastname@example.org@sgu.edu To change your refund mailing address go to Self Service to Personal Information tab.
Student Health Insurance During Clinicals Processed each year prior to August 1 st –If you have your own Health Insurance coverage and want to waive out of school sponsored Student Health You must waive by August 1 st or You will be automatically enrolled and billed for Plan 1 Monitor your SGU emails for this notification
Those annoying email notifications Take the action needed to resolve them! May need to sign Promissory Notes May need to provide Student Health Insurance Information May need to accept loan awards FAO may need to update our systems
Bridge Loan Borrower must have completed their first two (2) years of medical school at St. George’s University* Borrower may apply with or without a co-signer Borrower must be the minimum age of majority based on the state of permanent residence at the time of application Minimum loan amount = $2,001.00 Maximum loan amount = $8,000.00 (inclusive of fees netted from loan) Borrowers and Cosigners must meet minimum FICO score and other credit requirements Income requirements may apply. Interest Rate/Fees Variable Interest Rate, adjusted quarterly An Origination Fee will apply For additional information or questions, please call: (877) 716-5406 To Apply Go to: www.brazos.us.com/private/stgeorgeswww.brazos.us.com/private/stgeorges *The Bank of Lake Mills Medical Bridge Loan Program is not being offered, made or endorsed by St. George’s University. Bank of Lake Mills is not affiliated with St. George’s University.
Residency & Relocation Loans Non-federal loans available to provide funds for graduating medical students who have expenses not covered by federal aid packages, including residency expenses and relocation costs To be eligible a student must be enrolled at least half time in their final year of study Your school is generally required to verify attendance – this is verified through the Registrar’s office – contact Carla Gerrard – Ext. 1203 Funds are disbursed directly to the student Cannot be consolidated under a federal Consolidation loan Borrow up to a maximum of $15,000 Eligibility is based on a credit evaluation – securing a cosigner may increase the likelihood of being approved. Borrower may apply for co-signer release after successful completion of their education& 24 consecutive payments Deferment during residency – must request from the lender Link to loans: https://www.salliemae.com/student-loans/global-residency-loan/ https://www.salliemae.com/student-loans/global-residency-loan/
SALLIE MAE Medical Residency and Relocation Loan Lender ID: 900905 Who's EligibleGraduate Cosigner RequiredNo Cosigner ReleaseYes Interest Rate Rates from LIBOR 3.00% (3.34% APR) to LIBOR + 11.88% (11.68% APR)1 Interest Rate TypeVariable Interest Rate Reduction #10.25% Minimum Loan Amount$1,000.00 Maximum Loan Amount$15000.00 Repayment Begins Repayment begins three years after graduation or nine months after leaving school or dropping to less than half-time status (4) Grace Period9 months Origination FeeNo origination fee Repayment FeeNo repayment fee Valid for Past Due BalancesNo 1 Rates and fees shown are available for the Residency & Relocation Loan. Interest rates are variable and may increase after consummation.
Loan Repayment Options Standard Graduated Extended Consolidation Income Based (IBR) Repayment Tips
Standard Repayment Loan AmountLoan Term (Yrs) Monthly Payment Total Paid (Loan + Interest) $138,50010$1,593.86$191,263.20 AdvantagesConsiderations Who this plan works for Standard Equal monthly payments of at least $50 (depending on your loan balance) for up to 10 years. You will automatically be placed on the standard repayment plan unless you decide to choose another plan. This plan is great for someone who has a steady monthly income and can afford the regular payments.
Graduated Repayment AdvantagesConsiderations Who this plan works for GraduatedMonthly payments start lower, but increase over time for up to 10 years. Talk to your lender or servicer to find out more specifics. Even though your payments are low to start with, your loan term is still ten years. Your loan payments may end up being very high near the end of your term. This plan may work well for someone who expects to have steady wage increases. Repayment Summary Period (years) Monthly Payment 1 - 2$ 1,094.39 3 - 4$ 1,330.50 5 - 6$ 1,617.54 7 - 8$ 1,966.52 9 - 10$ 2,390.78 Totals Months in Repayment 120 Interest Payment$ 63,094.47 Total Loan Payment $ 201,594.47 Loan Amount$ 138,500
Extended Repayment Loan AmountLoan Term (Yrs) Monthly Payment Total Paid (Loan + Interest) $138,50025$961.29$288,387.00 AdvantagesConsiderations Who this plan works for ExtendedExtended repayment allows you to stretch your payments out over 25 years, offering you a lower payment over a longer period of time. To qualify, you must have total outstanding principal and interest in FFELP loans that exceeds $30,000. If you do, you may repay your loans based on a fixed or graduated payment schedule for up to 25 years. Remember that your payments will be lower, but you'll pay more in interest because you're taking longer to repay your loans. That said, there is no pre-payment penalty. This plan is good for someone who is looking for a low monthly payment. Depending on your income, your payment may be lower than with the income- based plan—run the numbers to find out.
Loan Repayment Examples Payment PlanAmount BorrowedLoan Term (Yrs.) Total Paid (Loan + Interest) Standard$138,50010$191,263.20 Graduated$138,50010$201,594.47 Extended$138,50025$288,387.00
Combines federal loans into a single loan Pays existing loans in full and replaces them with a new loan Acquires a new interest rate Increases repayment term up to 30 years, depending on your loan balance Resolves any split servicing issues Needed for Public Health Forgiveness Program The Direct Loan Program is the only source for a federal consolidation loan email@example.com Consolidation
Special Direct Loan Consolidation You must have at least one loan held by Department of Education (ED) and at least one lender held Federal Family Education Loan Program (FFELP) loan to qualify The lender-held FFELP loan cannot be in default The lender-held FFELP loan must be in its grace period or in repayment status – including delinquency, deferment (ex. Unemployment), or forbearance status. IN SCHOOL deferment does not qualify Offer Ends June 30th Who is eligible? Benefits.25% interest rate reduction from the rate as of the date of consolidation Additional.25% interest rate reduction is auto debit is set up The program is intended to assist borrowers with loans split among loan servicers by simplifying the repayment process, resulting in one monthly bill and payment.
Income Based Repayment (IBR) New payment plan effective July 1, 2009 Payments based on income and family size instead of amount borrowed You can participate if you have partial financial hardship Must reapply each year and submit tax return for verification Borrower who files married/joint: consider both spouse’s AGI in determining payment amount Borrower who files married/separate: consider only the borrower’s AGI and debt in determining payment amount
Monthly payment is 15% of the difference between your Adjusted Gross Income (AGI) minus 150% of the monthly poverty level in your state of residence applicable to family size Payment term is 10 years, but repayment period can go up to 25 years Any remaining balance may be forgiven after 25 years and/or 300 on time payments Income Based Repayment (IBR)
Visit www.ibrinfo.org for a payment calculator Subsidized loans are eligible for a subsidy for the first 3 years your monthly payment amount may not cover all of the interest that accrues on your loans each month. (negative amortization) The gov’t pays the remaining unpaid accrued interest that is due each month on your subsidized loans for up to three consecutive years Benefits of IBR Example: Borrower has all Subsidized loans Payment under IBR = $40 Monthly accrued interest = $75 DOE will pay: $35
Evan is single, with no dependents, and resides in FL Family size: 1 AGI: $48,460 Loan Balance: $150,000 Meet Evan – Borrower #2
Family Size = 1 Is Evan Eligible for IBR? $4,038 Monthly * -$1,396 150% of poverty level ** $ 2,642 15% of $2,642 = $396 Standard payment = $1,726 * Yearly Salary of $48,460 ** Current Poverty level is $11,170 x 150% = $16,755 divide 12 this by $1,396 QUALIFIES
Mary is married, with no Children, and lives in OH Family size: 2 AGI: $180,000 (Joint Return) Loan Balance: $150,000 Meet Mary – Borrowe # 4
$15,000 Monthly -$ 1,891 150% of poverty level * $ 13,109 15% of $13,109 = $1,966 Standard payment = $1,726 AGI of both Mary’s spouse and her own are used for determining their IBR eligibility. Speak with your financial advisor whether file separately will be more advantageous. Family Size = 2 Is Mary Eligible for IBR? DOES NOT QUALIFY * Yearly Salary of $180,000 ** Current Poverty level is $15,130 x $150% = $22,695 divide this by 12 month = $1,891.25
Family Size = 2 Sonia – Borrower #3 Sonia is single, with one child, and lives in NY Family size: 2 AGI: $48,460 Loan Balance: $150,000
Family Size = 2 Is Sonia Eligible for IBR? $4,038 Monthly * -$1,891 150% of poverty level ** $ 2,147 15% of $2,642 = $396 Standard payment = $1,726 * Yearly Salary of $48,460 ** Current Poverty level is $15,130 x $150% = $22,695 divide this by $1,891 QUALIFIES
Borrower 1Borrower 2Borrower 3Borrower 4 Family Size1122 Monthly AGI*$0$4,038 $15,000 150% of Poverty Level $0$1,396$1,891 X**$0$2,642$2,147$13,109 15% of X$0$396$322$1,966 Loan AmountStandard Monthly Payment Borrowers who quality for IBR $150,000$1,726.201, 2 & 3 $200,000$2,301.61All four borrowers * The average first-year resident stipend for 2009 was $48,460. This amount will vary by region and specialty. **Difference between AGI and 150% of poverty level Income-Based Repayment (IBR)
On October 25, 2011, the Obama Administration proposed a Pay-As-You-Earn plan that would cap certain student loan borrowers’ loan payments at 10% of their discretionary income. Under this proposal, borrowers paying under the Pay- As-You-Earn plan would also be eligible to have their remaining loan balance to be forgiven after making 20 years of payments. Details of the Pay-As-You-Earn plan, including borrower and loan eligibility, will not be finalized until the proposal goes through the negotiated-rulemaking process. PAY AS YOU EARN
Loan Payment Relief Options Public Service Loan Forgiveness Various State and Private Organizations National Health Service Corp. (NHSC) National Institute of Health (NIH)
How does Public Service Loan Forgiveness (PSLF) work? To be eligible for Public Service Loan Forgiveness (PSLF) you must make 120 of the right kind of payments, with the right kind of loan, while working in the right kind of job. The 120 payments do not have to be consecutive.
1) The right kind of job. Your job is eligible if you are employed by a nonprofit, tax-exempt 501(c) (3) organization – check with the IRS, employed by Federal, State, Local or Tribal government or serve in the Americorps or Peace Corps. 2) The right kind of loan. Direct Loans (William D. Ford Direct Loan Program). Federal Family Education Loan (FFEL) Program, you can consolidate into a Direct Loan to take advantage of PSLF, even if you have consolidated previously. consolidate into a Direct Loan 3) The right kind of payment. These are payments made under the Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Standard 10-Year Repayment plans. PSLF is intended for people who have high debt relative to income and qualify for ICR or IBR for at least part of their careers in public service. Does your potential residency placement qualify ? The answer may help you decide where you want to do your residency. Public Service Loan Forgiveness (PSLF)
Residency Forebearance You must request forbearance from the servicer for each of your loans Interest accrues on ALL loans Allows borrowers to postpone payment or reduce the payments for a period of time Servicers are required to grant Mandatory forbearance to residents through the duration of their residency (approved in annual increments). Credit is not affect adversely
Strategic Approach to Managing Medical School Debt Two Medical School Graduates GRADUATE A GRADUATE B DURING RESIDENCY Choose to enroll in IBR & apply for PSLF Uses Residency Forbearance to postpone making any payments on his federal loans during residency Monthly IBR payment is $37 during the 1 st 2 years of residency & averages $333 during remainder of residency His monthly payment is $0 AFTER RESIDENCY Her 1st year monthly payment is $352 and increases to $1,294 Debt has increased by $53,584 from interest that accrued during forbearance Monthly payment never exceeds $2,211 Enters a standard 10 year repayment term - payments are $2,837 AS A PRACTICING PHYSICIAN Meets the PSLF program requirements and retires debt after 6 more years, pating a total of $134,766 Retires his dent on the standard repayment plan, with the sum of his total payments over this period totaling a staggering $340,390 Has $189,655 of debt forgiven (tax free) which is equivalent to $316,092 in taxable income. Graduate A retires her debt after the 10 year repayment term, paying a total of $134,766 while Graduate B paid a total of $340,390. Taking a proactive approach to managing student debt saved Graduate A $205,624 in loan repayments relative to Graduate B.
National Health Service Corps Loan Repayment Program Primary care clinicians can receive repayment assistance in return for working in a NHSC- approved HPSA –$60,000 for 2 yrs of service –$170,000 for 5 yrs of service Continued service beyond 5 years may be possible http://nhsc.hrsa.gov/loanrepaym
National Institute of Health (NIH) Part of the U.S. Department of Health and Human Services The primary federal agency for conducting and supporting medical research Offers five loan repayment programs to attract health professionals to careers in clinical, pediatric, health disparities, or contraception and infertility research In exchange for a two or three-year commitment to a research career, NIH will repay up to $35,000 per year of your qualified educational debt Basic eligibility requirements: Government research funding (federal, state, or local) or domestic nonprofit research funding Student loan debt equal to at least 20% of annual salary U.S. citizen For more information, visit lrp.nih.gov
Repayment Tips Verify your Federal Student loans at www.nslds.ed.gov Let your lender or servicer know if: 1. You change your name, address, or telephone number 2. You want to switch to a different payment plan after repayment begins 3.You want to change your payment due date because the date assigned doesn’t work for you 4. You think you’re going to have trouble making your student loan payment
Sign up to make your monthly payment via automatic debit (ACH) instead of by check Explore the education tax benefits that are available—visit studentaid.org or irs.gov (search for Publication 970) The amount of interest that you pay is the lowest under the standard 10-year repayment plan There is no pre-payment penalty for federal student loans Choose an alternative plan if you have cash flow problems early on Repayment Tips
Useful links www.aamc.org/services/first - tools to manage student loan debt wiselywww.aamc.org/services/first -The Economics of Becoming a Doctor- Includes information on Income-Based Repayment and Public Service Loan Forgiveness, and a discussion of the economics of earning an M.D. degree http://www.gladvisor.com/onlinepresentations.aspx –Medical Residents' Finances: A Strategic Approach to Managing Medical School Debt- This video highlights how federal student debt relief programs can help medical residents lower the cost of their student loan debt. An overview of the benefits of Income-Based Repayment and Public Service Loan Forgiveness is also provided. http://www.IBRinfo.org –Income Based Repayment http://www.aamc.org –Association of American Medical Colleges http://www.nslds.ed.gov -- Association of American Medical Colleges