Oh no! Student Loans WHAT YOU NEED TO KNOW ABOUT SERVICERS, REPAYMENT PLANS, PUBLIC SERVICE LOAN FORGIVENESS, AND RESOURCES

Servicers: Who are they? A loan servicer is a company that handles the billing and other services on federal student loans and sometimes alternative/private student loans as well. They are assigned, not selected and borrowers can only request a new servicer when consolidating loans. They are not lenders. Top 4 Servicers Navient – Sallie Mae’s new company that services Federal and Private Student Loans Great Lakes Educational Loan Services (GLELS/GHELC/ACS/AES): Federal & Private FedLoan Servicing – Track Public Service Loan Forgiveness payments: only Federal Nelnet: Usually older Federal Loans

Federal Loan Programs DIRECT LOANS Direct Loans to the student Subsidized – Interest paid Unsubsidized – Interest accrues Fixed rate interest set by congress annually Grace Period: 6 months from date of graduation or drop below ½ time Lower interest rate than PLUS Loans PLUS LOANS Involve Credit Check Interest starts accruing right away Fixed interest set by congress Parent PLUS Loans can’t be transferred to the student Payments start right away for Parent PLUS Loans/ Deferred payments for Grad students while enrolled at least half-time Very limited repayment plans for Parent PLUS borrowers

Private/Alternative Loans PRIVATE LOANS Usually require a credit check and possible co- signer Variable or fixed rate interest set by market Unregulated origination fees and terms Payments may be deferred while in school, or may require a payment after certain period of time Some have grace periods; some don’t May have same servicers as Federal Loans SELF LOANS (AND OTHER STATE LOANS Requires credit check and possible co-signer Interest payments made 90 days from distribution and every three months after that while in school Interest fixed or variable Term of loan based on amount borrowed ( 15 – 20 years) No grace periods; one time forbearance option Standard or Extended Interest repayment plans

Repayment Plans: Non-income driven

Repayment PlanEligible LoansMonthly Payment/TermsQuick Comparison Standard Repayment Plan Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford/FFEL Loans All PLUS Loans Payments are a fixed amount of at least $50 per month Up to 10 years You pay less in interest for your loan over time under this plan than with others Graduated Repayment Plan Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford/FFEL Loans All PLUS Loans Payments are lower at first and then increase, usually every 2 years Up to 10 years You'll pay more for your loan over time than under the 10- year Standard Plan. Extended Repayment Plan Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford/FFEL Loans All PLUS Loans Payments may be fixed or graduated Up to 25 years Payments lower than 10 year Standard Plan You’ll pay more for your loan over time than under the 10- year Standard Plan *SOURCE:

Income Driven Repayment Plans

Repayment Plans: Income-Driven - REPAYE Repayment PlanEligible LoansMonthly Payment / TermsQuick Comparison Revised Pay As You Earn Repayment Plan (REPAYE) Direct Subsidized and Unsubsidized Loans Direct PLUS loans made to students Direct Consolidation Loans that do not include PLUS loans made to parents 10 percent of your discretionary income, no cap Spouse’s income included in calculation Your payments change as your income changes. Up to 20 years for undergraduate studies; 25 years for graduate studies You do not need to have a partial financial hardship. Loan forgiveness after 20 years of qualifying monthly payments (25 years for graduate degrees) You may have to pay income tax on any amount that is forgiven, unless forgiven under PSLF. SOURCE:

Repayment Plans: Income-Driven - PAYE Repayment PlanEligible LoansMonthly Payment / TermsQuick Comparison Pay As You Earn Repayment Plan (PAYE) Direct Subsidized and Unsubsidized Loans Direct PLUS loans made to students Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents Generally 10 percent of your discretionary income, but never more than the 10-year Standard Repayment Plan amount Your payments change as your income changes. Spouse’s income may be excluded depending on how taxes are filed Up to 20 years You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, You must have a partial financial hardship. Loan forgiveness after 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven, unless forgiven under PSLF. SOURCE:

Income Based Repayment (Part 1 & 2) Repayment PlanEligible LoansMonthly Payment/TermsQuick Comparison Income Based Repayment Plan (IBR) Direct Subsidized and Unsubsidized Loans Subsidized and Unsubsidized Federal Stafford Loans all PLUS loans made to students Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents For those who are not new borrowers* on or after July 1, 2014: Generally 15 percent of your discretionary income, but never more than the 10-year Standard Repayment Plan amount Up to 25 years For those who are new borrowers* on or after July 1, 2014: Generally 10 percent of your discretionary income, but never more than the 10-year Standard Repayment Plan amount Up to 20 years For both: Your payments change as your income changes (annually reviewed), spouse’s income may be excluded depending on how taxes are filed *For IBR you are a new borrower if you had no outstanding Direct or FFEL/Stafford loans when you received a Direct Loan on or after July 1, You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10-year standard plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven. SOURCE:

Repayment Plans: Income Driven - ICR Repayment PlanEligible LoansMonthly Payment/TermsQuick Comparison Income Contingent Repayment Plan (ICR) Direct Subsidized and Unsubsidized Loans Direct PLUS Loans made to students Direct Consolidation Loans: including those that include PLUS loans made to parents The lesser of the following: 20 percent of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income Your payments change as your income changes. Up to 25 years You'll pay more for your loan over time than under the 10-year standard plan. If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven. You may have to pay income tax on the amount that is forgiven. SOURCE:

Public Service Loan Forgiveness

Eligible LoansEligible Payment PlansEligible EmployersWhat is Full Time?Process Direct Loans* * Other loans can be consolidated into Direct Loans: Subsidized & Unsubsidized Stafford; Federal PLUS loans; FFEL Consolidations (excluding spousal consolidations), Perkins, certain Health Professions and Nursing Loans are some Income Driven Repayment Plans 10-year Standard Repayment Plan Government organizations, including federal, state, local or tribal organizations, agencies or entities; a public child or family service agency; tribal college or university; or AmeriCorps or Peace Corps A not-for-profit, tax- exempt organization under section 501(c)(3) of the Internal Revenue Code A private, Not-for-profit organization (that is not a labor union or a partisan political organization) that provides certain public services Must meet employer’s definition of Full Time, but that definition must be at least an annual average of 30 hours per week, and at least 8 out of 12 months for teachers and other contractual employees of public service agencies If employed in more than one qualifying part-time job simultaneously, you may meet the full-time requirement if you work a combined average of at least 30 hours per week Must not be in default on loans when forgiveness is requested Must be employed full- time with eligible employer while making each of 120 on-time payments; at the time you apply for loan forgiveness; and at the time the remaining balance on your eligible loans is forgiven Keep track of eligibility by completing Employment Certification each year SOURCE: FSA PUBLIC SERVICE LOAN FORGIVENESS PROGRAM INFORMATION SHEET

Consolidation and Refinancing

Web Resources : The Department of Education’s official website. Describes all federal loan programs: the good, the bad, and the uglywww.studentaid.ed.gov The Department of Educations “self-serve” website for borrowers. This is where you can use the Repayment Estimator, apply for income-driven repayment plans (except ISR), and apply for consolidation. Must have FAFSA PIN to log-in. Complete Financial Aid Reviews here. All loans are Federal and are list type of loan. Click on the loan number and you can get more details like interest rates, school attended, current servicer and status of loan This site is managed by the National Consumer Law Center and has in-depth information on federal student loan programs and consumer rights when it comes to both federal and private loans Consumer Finance Protection Bureau’s website where borrowers can file complaints against servicers of federal and private loans as well as collection agencies

Questions? Student Loan Repayment Counseling LSS Financial Counseling