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Graduate Student Loan Exit Counseling. Please complete and sign the personal data sheet. different addresses  Personal references: friends or relatives.

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Presentation on theme: "Graduate Student Loan Exit Counseling. Please complete and sign the personal data sheet. different addresses  Personal references: friends or relatives."— Presentation transcript:

1 Graduate Student Loan Exit Counseling

2 Please complete and sign the personal data sheet. different addresses  Personal references: friends or relatives living at different addresses in the U.S.A. other than  Parent or nearest relative (other than your spouse)  If you have a Perkins loan  If you have a Perkins loan, please sign the original repayment schedule.  Last day of actual attendance:  June 14, 2013  All forms will be collected after the session.  If you do not have all the necessary information to complete the forms, you can the information to:

3 Keys to successfully managing your loan repayment  Know how much you have to repay, when and to whom.  Understand the terms and conditions of your loans.  Select the loan repayment plan that best fits your needs.  Take advantage of the loan forgiveness programs for which you may qualify.  Keep good financial records.  Ask questions!

4 Summary letters not Does not reflect accrued interest or any payments you may have made.

5 CAESAR > Main Menu > Student Center > View Northwestern Financial Aid History

6 Monitor Your Federal Loans National Student Loan Data System (NSLDS) To access you provide: - SS# - Date of Birth - First 2 letters (last name) - PIN # (www.pin.ed.gov)

7 National Student Loan Data System (NSLDS) Status Servicer Balance Prior loans

8 Federal Stafford Loans  6 month grace period ends December 14, fixed  Interest rate was fixed at 6.8% effective July 1, variable  Loans disbursed from July 1, 1998 to June 30, 2006 have a variable interest rate that changes each July 1 st. (1.79% in deferment; 2.39% in repayment/forbearance)  Subsidized Stafford loan will accrue interest after the 6 month grace period when repayment begins.  Unsubsidized Stafford loan has accrued interest since initial disbursement.  Unpaid interest will be capitalized  Unpaid interest will be capitalized at the end of the 6 month grace period.  6 repayment plan options can be changed as needed.

9 Federal GradPLUS Loan  No grace period: July 1, 2008  Loans disbursed on or after July 1, 2008 have a 6 month post-enrollment deferment. July 1, 2008  Loans disbursed before July 1, 2008 will begin repayment within 60 days of the final disbursement.  Fixed interest rate:  Direct  Direct loans = 7.9%  FFELP  FFELP loans = 8.5% (Federal consolidation can reduce the interest rate to 8.25%.)  Interest has accrued from the date of disbursement. Unpaid interest will be capitalized when repayment begins.  6 repayment plan options can be changed as needed.

10 Federal Direct Consolidation Loan Federal Direct Consolidation Loan program Federal Direct Consolidation Loan program : federalStaffordGradPLUSPerkins  Combines multiple federal loans (Stafford, GradPLUS and Perkins*) into one new loan with a single payment and a single fixed interest rate (weighted average rounded up to the nearest 1/8 th percent, capped at 8.25%). reduces your monthly payment  Can lengthen the repayment term up to 30 years which reduces your monthly payment. (This will increase the amount of interest you will pay over the life of the loan.)  Allows you to take advantage of certain repayment plans. Public Service Loan Forgiveness  Qualifies your loans for Public Service Loan Forgiveness. Direct Loan Servicing Center  Contact the Direct Loan Servicing Center. notPerkins * Do not consolidate your Perkins Loan if you qualify for full or partial cancellation.

11 Federal Perkins Loans  Fixed interest rate of 5%  10 year standard repayment term  9 month grace period with 0% interest ends March 14, 2014  6 month post-deferment grace period  Lender/Loan holder:  Lender/Loan holder: NU Student Loan Office  Loan Servicer:  Loan Servicer: Campus Partners

12 Private NU Loan  6 month grace period  3 months for loans prior to academic year  10 year repayment term.  Variable  Variable interest rate changes each September 1 st.  Need-based = 5.00%  Optional and GPAL = 5.50%  International A = 5.5%  International B = 6.0%  Interest has accrued from the date of disbursement.  Unpaid interestwill be capitalized  Unpaid interest will be capitalized at end of the grace period when repayment begins.  Forbearance  Forbearance (no deferments) may increase monthly payments. Federal  Cannot be included in a Federal Consolidation Loan.

13 Campus Partners Loan servicer for Federal Perkins & private NU Loans

14 Private NU Loan (International Payments) peerTransfer:  Streamlines the loan repayment process  Offers excellent foreign exchange rates  Allows you to pay from any country & any bank  In your home currency (in most cases)  Saves money on bank fees & ensures payment is received in full  Provides peace of mind with 24/7 multilingual customer support  Tracks your payment from start to finish  Sends an when your payment is received by NU  Go to  Select “Northwestern University Student Loan Office”

15 NU Student Loan Office For questions about your Federal Perkins Loans and private NU Loans Student Loan Office 555 Clark St - 3 rd Floor Evanston, IL

16 Repayment Plans - Stafford & GradPLUS Repayment Plan (Stafford, GradPLUS & Consolidation Loans) Payment Structure Maximum Payment Period Additional FeaturesStandardFixed 10 years - Highest initial payment - Lowest total interest - No negative amortization GraduatedTiered 10 years - Payments increase incrementally - No negative amortization Extended Fixed or tiered 25 years - Lowest initial payment without considering income considering income - Direct Loan & FFELP debt must each be > $30,000 each be > $30,000 - No negative amortization Income Sensitive (FFEL Loans only) Adjusted annually based on: annual income 10 years - No negative amortization Income Contingent (Direct Loans only) Adjusted annually based on: - AGI, family size, - Direct Loan debt 25 years - Payment = 20% of “disposable” income - Balance forgiven after 25 years (taxable) - Negative amortization allowed; unpaid interest capitalized interest capitalized Income Based (IBR) Adjusted annually based on: - Household AGI - Family size - Poverty guideline in state of residence 25 years - Payment = 15% of “disposable” income with “partial financial hardship” (PFH) with “partial financial hardship” (PFH) - Balance forgiven after 25 years (taxable) - Negative amortization allowed; interest on subsidized loans covered for 3 years subsidized loans covered for 3 years Pay As You Earn (PAYE) Adjusted annually based on: - Household AGI - Family size - Poverty guideline in state of residence 20 years - New borrower as of October 1, Payment = 10% of “disposable” income with “partial financial hardship” (PFH) with “partial financial hardship” (PFH) - Balance forgiven after 20 years (taxable) - Negative amortization allowed; interest on subsidized loans covered for 3 years subsidized loans covered for 3 years

17 Income Based Repayment Plan (IBR)  Once in the IBR plan, your monthly payment is lesser of:  Amount calculated using the IBR formula.  Amount calculated based on the standard 10-year fixed repayment plan at the time you began loan repayment.  Monthly payment can be less than accrued interest. (negative amortization) up to the first 3 years  Unpaid interest that accrues on subsidized Stafford debt will be paid by the U.S. Department of Education for up to the first 3 years in repayment under the IBR plan.  Repayment period for IBR plan can extend beyond 10 years regardless of the amount of your eligible debt.  Any outstanding eligible loan balance is cancelled after 25 years of being “economically challenged.” Amount forgiven may be taxable.

18 Approx Maximum AGI for “Partial Financial Hardship” at Specified Debt (2012 Poverty Guidelines) DebtAGI $25,000$39,771 $35,000$48,977 $45,000$58,184 $55,000$67,390 $65,000$76,597 $75,000$85,803 $85,000$95,010 $95,000$104,216 DebtAGI $105,000$113,422 $115,000$122,629 $125,000$131,835 $135,000$141,042 $145,000$150,248 $155,000$159,455 $165,000$168,661 $175,000$177,867 Assumptions: - Interest rate = 6.8% - Household size of 1 - Household size of 1 - Residing in 48 contiguous states - Residing in 48 contiguous states IBR Plan) “Partial Financial Hardship” (IBR Plan)

19 Pay As You Earn (PAYE)  Created by Executive Order on October 26, 2011  Enhanced version of Income-Based Repayment (IBR)  Available to eligible borrowers beginning December 21, 2012  Must be a “new borrower” on or after 10/1/2007  Cannot have had an outstanding balance on an existing federal student loan when you borrowed your first federal student loan on/after 10/1/2007)  Must have had a disbursement of a federal student loan on or after 10/1/

20 IBR vs. PAYE  Direct and FFEL loans  Payment amount based on 15% of “Discretionary Income”  Loan cancellation after 25 years  Direct loans only  Payment amount based on 10% of “Discretionary Income”  Loan cancellation after 20 years  Must meet additional eligibility criteria IBRPAYE 20

21 Comparison of Estimated Payments for Loan Debt of $100,000 Repayment Option Repayment Period Monthly Payment Amount TotalInterestPaid Total Amount Paid Standard10 years$1185$42,254$142,254 Graduated10 years$823 initial payment $1778 final payment $50,596$150,596 Extended (fixed payments) 25 years$737$121,112$221,112 Income-Contingent* (ICR) 12.7 years$814 initial payment $1312 final payment $60,259$160,259 Income-Based * (IBR) 21.7 years$541 initial payment $1185 maximum payment $121,251$223,427 Pay as You Earn* (PAYE) 20 years$360 initial payment $809 maximum payment $124,470$133,647 *Assumptions: $41,000 Stafford at 6.8%, $59,000 GradPLUS at 7.9%, Family size = 1, 2012 Poverty Guidelines, AGI = $60,000 with 4% annual increases

22 Public Service Loan Forgiveness (Direct Loans only)  Must work full-time (30 hours per week) for 10 years in Public Service:  Non-profit, tax exempt, 501(c)(3) organizations  Federal, state or local government  Public schools and colleges  Military service not  Does not have to be continuous work  Keep documentation from employers (see online) qualifying,on-time,Direct Loan  After making 120 qualifying, on-time, Direct Loan payments after October 1, 2007, your entire loan balance (principal & interest) are forgiven (not taxable). Repay Your Loans  More details available at Repay Your Loans:

23 Perkins Cancellations Perkins loans may receive full or partial cancellation depending on employment or service:  Teaching in certain school districts  Special education, Speech & Language Pathology, Family Services, Head Start  Full time teacher of math, science, foreign language and bilingual education  Nurse or Medical Technician, Health Care Provider  Vista, Peace Corps, Teach for America  Fire fighter, law enforcement, corrections officer  More details at:

24 Loan Cancellation/Forgiveness  Most loans (federal and private) may be discharged in cases of:  Death/Disability  Closed school/False certification  Identity Theft  Partial forgiveness Federal Stafford and Federal Consolidation Loans  Partial forgiveness for service in areas of national need is also available for Federal Stafford and Federal Consolidation Loans. all of your loan servicers  If you think you are eligible for loan cancellation or forgiveness, contact all of your loan servicers.  Don't stop making payments until you receive written notification from each of your loan servicers that your loan has been cancelled.  If only a portion of your loan was cancelled, update your records with your new balance after verifying the information with your loan servicers.

25 Postponement Options n Deferment  In-school  In-school – no time limit – must be enrolled at least half-time  Economic Hardship  Economic Hardship – up to 36 months  Unemployment  Unemployment – up to 36 months  Military  Military – no time limit  Your loan servicer will require documentation of eligibility which must be renewed (usually) semi-annually (check with your servicer) do not accrue interest  Subsidized Stafford and Perkins loans do not accrue interest during periods of deferment do accrue interest Unpaid interest is capitalized  Unsubsidized Stafford and GradPLUS loans do accrue interest during periods of deferment. Unpaid interest is capitalized at the end of the deferment period not  Does not affect your credit rating

26 Postponement Options n Forbearance reduce or postpone payments  Forbearance is an agreement with your lender to reduce or postpone payments when you are having financial difficulty and do not qualify for a deferment.  Documentation is required to verify your income and student loan debt.  Granted (usually) for periods of 6 months. both  Interest accrues on Perkins, GradPLUS and both subsidized and unsubsidized Stafford loans.  Unpaid interest is usually capitalized at the end of the period of forbearance. not  Forbearance does not affect your credit rating.

27 Rights/Responsibilities n Review your promissory notes for a complete list of all your rights and responsibilities. n Student loans must be repaid whether or not:  Program was completed  Program completed in normal amount of time  Satisfied with your educational experience  Employment is obtained n Keep In Touch with your Lenders/Servicers  Notify all lenders/servicers of name and address changes.  Make payments even if you have not completed the program.  Make payments even if a billing statement is not received.  BE PROACTIVE! BEFORE ANY  BE PROACTIVE! Contact your lender/servicer BEFORE you miss a payment if unable to make payment for ANY reason.

28 FSA Ombudsman  The FSA Ombudsman  The FSA Ombudsman is an impartial, confidential resource after other avenues are exhausted to resolve borrower concerns.  Self-Resolution Checklist federal  To request mediation regarding federal student loan issues, you may contact the Office of the FSA Ombudsman at: –https://studentaid.ed.gov/ repay-loans/disputes/prepare

29 Default Consequences academic records  Your academic records will be placed on hold. collection costs  You may be liable for all collection costs. wage garnishment  You may be subject to administrative wage garnishment. court costslegal fees  You may be sued with court costs and legal fees added to your loan balance. income tax refund  Your income tax refund may be withheld. credit rating  Your credit rating and ability to borrow will be seriously damaged. financial aid  You may lose future eligibility for financial aid and student loans. professional license  Your professional license could be denied or revoked. employment  You may be denied certain types of employment.

30 Your Credit  All of your federal loans are reported to at least one of the three national credit bureaus.  Factors reported:  Timeliness  Timeliness of your payments  Missed payments  Outstanding balance credit score  Your credit score will affect your ability to obtain credit. free  Access free annual credit reports at:  Experian  Equifax  Trans Union

31 Full Deduction Partial Deduction NO Deduction Single$60,000 or less $60,001 to $74,999 $75,000 or more Married Filing Jointly $125,000 or less $125,001 to $154,999 $155,000 or more The Taxpayer Relief Act of 1997  IRS Form 1098E will be issued by your lender/servicer(s) for eligible interest payments of $600 or more in any calendar year.  Voluntary payments may be eligible.  Capitalized interest may be included.  Deduction may not exceed $2,500 per year.

32 Go Green!  Access account information  Loan balance  Accrued interest  Payment history  Make E-Payments  Sign up for auto-debit  Sign up for E-Billing  Update your address  Bookmark:  

33 Looking Ahead 1.CompareCAESAR NSLDS 1.Compare your loan amounts in CAESAR with the amounts on NSLDS, the national database. 2.Checkyourcredit 2.Check your credit reports for errors. 3.Create a folder 3.Create a folder for all your loan documents (preferably online). 4.Update your address 4.Update your address on your loan servicer(s) website(s). 5.Developan affordable spending plan 5.Develop an affordable spending plan. Know where your money is going. 6.When you receive notice 6.When you receive notice from your loan servicer(s) that your loans will be going into repayment in the near future: select a repayment plan  Contact your loan servicer(s) to select a repayment plan. deferment or forbearance forms  Postpone repayment by filing the necessary deferment or forbearance forms with your loan servicer(s). 7.Pay your billson time 7.Pay your bills on time (preferably online). To keep the rebate  You received a rebate on the loans fees for your Direct Loans. To keep the rebate, you must make 12 consecutive on-time payments.  On-time payments are a key factor in determining your credit score. NO PENALTY FOR PREPAYMENT!

34 We are here to help! Student Financial Services 555 Clark St, 1 st Floor Evanston, IL (847) Please turn in your data sheets!

35 Congratulations!


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