From the SOM Financial Aid Office… Congratulations to the University of Louisville School of Medicine Class of 2017!

Student Loans and Repayment Strategies Prepared for the Graduating Class of 2017 Leslie R. Kaelin M.Ed. UofL School of Medicine Financial Aid Director Spring 2017 Disclaimer: All information and estimates are based on AAMC interpretation of federal regulations as of January 2017 and are subject to change. These are estimates only. Students should contact their servicer(s) to discuss exact loan balances and repayment options.

Agenda Know Your Loans What Happens After Graduation Repayment Plans How Repayment Looks in Residency Other Considerations

Free Online Resource (PDF download) Education Debt Manager (EDM) www.aamc.org/first/graduating-edm

Know Your Loan Portfolio

Median MD School Debt: $190,000 Class of 2016 Indebtedness Refer to page 3 $200,000 $180,000 PUBLIC private Median MD School Debt: $190,000 Source: AAMC 2016 Graduate Questionnaire (GQ) Got Private Loan Debt? see page 61 76% of class report having educational debt 47% report debt of $200,000 or higher

UofL SOM Debt-Class of 2017 Class of 2017-$195,244 Average TOTAL DEBT (ME & Prior Debt) for 122 graduates (23 graduates without ME & Prior Debt not included in average) Class of 2017-$195,244 (Class of 2016 $208,537) Average MEDICAL SCHOOL DEBT ONLY for 119 graduates (26 graduates without ME Debt not included in average) Class of 2017-$185,299 (Class of 2016-$193,968)

Master Promissory Note Refer to page 9 Is a contract with the lender Has a multi-loan feature Details terms and conditions Includes rights & responsibilities

Rights and Responsibilities Refer to page 9 Prepay any federal loan without penalty Change repayment plans Rights include... Request a deferment or forbearance Request a shorter repayment schedule Review your promissory note for all rights

Rights and Responsibilities Refer to page 9 Make on time loan payments Make payments despite non-receipt of bill Responsibilities include... Notify the servicer of changes in contact info Complete exit counseling Review your promissory note for all responsibilities

Student loans must be repaid Manage your debt -don’t let it manage you A Serious Obligation Refer to page 9 Student loans must be repaid Manage your debt -don’t let it manage you

Consequences Refer to page 10 Delinquency Default

Loan Discharge Refer to page 11

Finding Your Federal Loans Refer to page 6 To access, provide your FSA ID, including : Username/Password For questions, visit https://fsaid.ed.gov www.nslds.ed.gov

Subsidized Versus Unsubsidized Refer to page 12 Subsidized Unsubsidized Direct Subsidized Perkins Loans* Primary Care Loans Loans for Disadvantaged Students* Consolidation Loans (underlyng subsidized loans) Direct Unsubsidized Direct PLUS Private Loans Consolidation Loans (underlyng subsidized loans) 4444 4444 * subsidy and deferment rights lost during consolidation © 2017 Association of American Medical Colleges. All rights reserved.

Fixed Interest Rates for the Class of 2017 Refer to pages 13-14 5.0% PERKINS* 6.41% DIRECT PLUS M1 2013-2014 5.41% DIRECT UNSUBSIDIZED 6.21% DIRECT UNSUBSIDIZED 5.0% PERKINS* 7.21% DIRECT PLUS M2 2014-2015 5.84% DIRECT UNSUBSIDIZED 5.0% PERKINS* 6.84% DIRECT PLUS M3 2015-2016 5.31% DIRECT UNSUBSIDIZED 5.0% PERKINS* 6.31% DIRECT PLUS M4 2016-2017 * Perkins, PCL and LDS Loans are disbursed at a fixed rate of 5%. All loans shown have a fixed interest rate.

Capitalization Refer to page 15 Addition of unpaid interest to the principal $219,200 $190,000 9,2,000 $29,200 Larger Principal Principal + Interest =

When possible, pay the interest on your loans before they capitalize! Repayment Tips Refer to page 15 When sending voluntary payments: 1) Send as a separate payment - Instruct to APPLY NOW - Specify the loan to apply it to (high interest rates are the priority) 2) Verify payment was accurately applied When possible, pay the interest on your loans before they capitalize!

After Graduation

GRACE Grace The path for some loans IN-SCHOOL REPAYMENT Refer to page 16 The path for some loans IN-SCHOOL REPAYMENT   GRACE

Loan Repayment Timeline Refer to page 17 www.aamc.org/first/timeline

Request 30-days before needed Postponement Options Refer to pages 18-19 Contact the loan servicer to apply Forbearance Deferment Request 30-days before needed © 2017 Association of American Medical Colleges. All rights reserved.

Postponement Options Deferment Subsidized loans are interest free Refer to page 18 Subsidized loans are interest free Interest accrues on unsubsidized loans Contact each loan servicer to apply Strict requirements to qualify Deferment NOTE: For more details, or to request a deferment or forbearance, contact each loan servicer. © 2017 Association of American Medical Colleges. All rights reserved.

Postponement Options Forbearance Interest accrues on all loans Refer to page 19 Interest accrues on all loans Interest will capitalize Contact each loan servicer to apply Request 30-days before needed Forbearance NOTE: For more details, or to request a deferment or forbearance, contact each loan servicer. © 2017 Association of American Medical Colleges. All rights reserved.

Postponement Options Medical Residency Forbearance Refer to page 19 Medical Residency Forbearance Postpones payments in annual increments Capitalization may occur at end of residency (if increments occur back-to-back throughout residency) An option for medical residents/interns NOTE: Request increments in a timely manner to avoid unnecessary and additional capitalization. © 2017 Association of American Medical Colleges. All rights reserved.

Repayment Plans

Monthly Payment Estimator (charts) Refer to pages 34-35

Managing Loans During Residency Refer to pages 36-37 Effects on the total repayment costs

The lower the monthly payment, the higher the overall cost Debt Fact The lower the monthly payment, the higher the overall cost

Repayment Plans Traditional Standard $2,410/mo Extended $1,380/mo Refer to pages 21-22 Traditional Standard Extended Graduated $2,410/mo Monthly payments for the entire repayment term are calculated up-front and disclosed to you. $1,380/mo $1,060/mo Based on a 2017 graduate indebtedness of $190,000 with a PGY1 stipend of $54,600 and a family size of one.

Repayment Plans Income-Driven $710/mo $460/mo $300/mo $300/mo Refer to pages 23-28 Income-Driven Income-Based Repayment (IBR)* Pay As You Earn (PAYE) Income-Contingent Repayment (ICR) Revised Pay As You Earn (REPAYE) $710/mo Monthly payments are based on income and other factors - recalculated annually. $460/mo $300/mo $300/mo Based on a 2017 graduate indebtedness of $190,000 with a PGY1 stipend of $54,600 and a family size of one. * New Borrowers on or after July 1, 2014 that select IBR will receive payment amounts equal to that of PAYE.

How are these payments possible? What’s the Catch? How are these payments possible?

Payments: Income-Driven Repayment (IDR) Refer to pages 23-31 IBR PAYE ICR REPAYE 20% Different Payment Amounts 15% 10% LOWEST LOWEST 10%

Payments: Income-Driven Repayment (IDR) Refer to pages 23-31 IBR PAYE ICR REPAYE No Max Different Payment Limits CAPPED Max Max CAPPED No Max

Terms: Income Driven Repayment (IDR) Refer to pages 23-31 IBR PAYE ICR REPAYE 25 years Different Term Lengths 25 years 20 years LEAST 25 years

IDR Plans: Eligibility Requirements Refer to pages 23-31 EASIEST IBR PAYE ICR REPAYE Eligible Loans Must be a Direct Loan Eligible Loans Eligible Loans EASIEST Eligible Loans

IDR Plans: Eligibility Requirements Refer to pages 23-31 IBR PAYE ICR REPAYE Eligible Loans Must have a Partial Financial Hardship Show Need Eligible Loans Show Need Eligible Loans Eligible Loans

> Standard Payment $2,410 / mo $460 (IBR) or $300 (PAYE) PAYE or The Test for a PFH Refer to page 24 Partial Financial Hardship (PFH) Standard Payment $2,410 / mo $460 (IBR) or $300 (PAYE) PAYE or IBR Payment > Must have PFH to enter into IBR or PAYE Can remain in IBR or PAYE in subsequent years, even without a PFH Must submit annual documentation Max payment in IBR or PAYE is the Standard amount (determined when entering the plan) Based on indebtedness of $190,000 with a PGY1 stipend of $54,600 and a family size of one.

IDR Plans: Eligibility Requirements Refer to pages 23-31 IBR PAYE ICR REPAYE Eligible Loans Show Need Eligible Loans STRICTEST Recent Borrower Show Need Eligible Loans Eligible Loans Must be a “New” borrower

“New Borrower” Defined Refer to page 27 Two Requirements No outstanding loans on October 1, 2007 or paid-off all outstanding loans before receiving a new loan on or after 10/1/07 AND Received a Direct Loan disbursement on/after October 1, 2011

Develop Your Own “Best” Strategy It’s not about the best one It’s about what fits with your life and financial goals

Options During Residency

Decision Time: 6 Months Post-Graduation Make Payments Postpone Payments PAYE REPAYE IBR Medical Residency Forbearance © 2017 Association of American Medical Colleges. All rights reserved.

Which Option to Choose?

Dr. Internal Medicine (General) Student Loan Debt: $190,000 Career: Internal Medicine Residency Length: 3 years Debt: $190,000 Post-Residency Y-1 Salary:$180,000

Total Repayment Amount Dr. Internal Medicine Student Loan Debt: $190,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $1,500 – 2,200 $377k $40k* Revised PAYE (REPAYE) 21 $395k -- X Income-Based (IBR) 15 $2,200 – 2,400 $346k www.aamc.org/medloans * May be a taxable forgiveness amount

Total Repayment Amount Dr. Internal Medicine Student Loan Debt: $250,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $1,500 – 2,200 $377k $256k* X Revised PAYE (REPAYE) 25 $1,500 – 2,400 $516k $145k* Income-Based (IBR) $2,200 – 3,200 $533k $0 www.aamc.org/medloans * May be a taxable forgiveness amount

Total Repayment Amount Dr. Internal Medicine Student Loan Debt: $325,000 Student Loan Debt: $325,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $1,500 – 2,200 $377k $468k* X Revised PAYE (REPAYE) 25 $1,500 – 2,400 $516k $395k* Income-Based (IBR) $2,200 – 3,700 $774k $82k* www.aamc.org/medloans * May be a taxable forgiveness amount

Dr. ObGyn Career: Obstetrics & Gynecology Residency Length: 4 years Student Loan Debt: $190,000 Career: Obstetrics & Gynecology Residency Length: 4 years Debt: $190,000 Post-Residency Salary:$230,000

Total Repayment Amount Dr. ObGyn Student Loan Debt: $190,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 18 $2,000 – 2,400 $385k $0 X Revised PAYE (REPAYE) 17 $2,000 – 2,600 $352k Income-Based (IBR) 16 $2,400 $363k www.aamc.org/medloans

Total Repayment Amount Dr. ObGyn Student Loan Debt: $250,000 Student Loan Debt: $250,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $2,000 – 2,800 $470k $131k* X Revised PAYE (REPAYE) 23 $2,000 – 3,000 $557k $0 Income-Based (IBR) 17 $3,000 – 3,200 $497k www.aamc.org/medloans * May be a taxable forgiveness amount

Total Repayment Amount Dr. ObGyn Student Loan Debt: $325,000 Student Loan Debt: $325,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $2,000 – 2,800 $470k $373k* X Revised PAYE (REPAYE) 25 $2,000 – 3,200 $652k $232k* Income-Based (IBR) 21 $3,000 – 4,200 $745k $0 www.aamc.org/medloans * May be a taxable forgiveness amount

Dr. Cardiology Career: Cardiology Residency Length: 6 years Student Loan Debt: $190,000 Career: Cardiology Residency Length: 6 years Debt: $190,000 Post-Residency Salary:$330,000

Total Repayment Amount Dr. Cardiology Student Loan Debt: $190,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $2,400 $410k $0 X Revised PAYE (REPAYE) 14 $3,100 – 3,600 $330k Income-Based (IBR) 19 $399k www.aamc.org/medloans

Total Repayment Amount Dr. Cardiology Student Loan Debt: $250,000 Student Loan Debt: $250,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $3,100 – 3,200 $558k $0 X Revised PAYE (REPAYE) 18 $3,100 – 3,900 $481k Income-Based (IBR) $3,200 www.aamc.org/medloans

Total Repayment Amount Dr. Cardiology Student Loan Debt: $325,000 Student Loan Debt: $325,000 Repayment Plan Total Years Post- Residency Payment (range) Total Repayment Amount Forgiven Lowest Cost Highest Cost Pay As You Earn (PAYE) 20 $3,100 – 4,100 $622k $186k* X Revised PAYE (REPAYE) 22 $3,100 – 4,300 $719k $0 Income-Based (IBR) 21 $4,200 $760k www.aamc.org/medloans * May be a taxable forgiveness amount

The FIRST Stop MedLoans® Organizer and Calculator Refer to page 5 A tool for graduates!! MedLoans® Organizer and Calculator www.aamc.org/medloans

Other Considerations

Loan Forgiveness (PSLF) Refer to pages 51-52 Eligible Loans + Qualifying Payments + Qualifying Work Public Service Loan Forgiveness www.myfedloan.org

Loan Forgiveness (PSLF) Refer to pages 51-52 Want to know more? www.aamc.org/first/pslfebook

Information on other programs: Repayment Assistance Information on other programs: aamc.org/repayasst AAMC National Institutes of Health (NIH) National Health Service Corps (NHSC) lrp.nih.gov nhsc.hrsa.gov

Reasons to Consolidate Refer to pages 53-55 Reduce # of Servicers Eligibility for PAYE or REPAYE Eligibility for PSLF Eligibility for IBR

Should You Consolidate? Refer to pages 56-57 www.aamc.org/first/consolidatequiz

Should I Refinance? www.aamc.org/first/shouldirefinance Refer to pages 58-59 www.aamc.org/first/shouldirefinance

Taxpayer Relief Act of 1997* Refer to page 60 Full Deduction Partial Deduction NO Deduction Single $65,000 or less $65,001 to $79,999 $80,000 or more Married filing Jointly $130,000 or less $130,001 to $159,999 $160,000 or more Max student loan interest deduction: $2,500/year May be eligible: Voluntary payments & capitalization * Student Loan Interest Deduction for 1/2017 www.irs.gov/publications/p970

The Next Steps Refer to page 62

Support Along The Way feedback.studentaid.ed.gov aamc.org/advocacy/meded Financial Aid Office & Residency Programs MedLoans Organizer & Calculator aamc.org/medloans saltmoney.org/AAMC studentloans.gov aamc.org/FIRST

“An investment in knowledge always pays the best interest”

UofL SOM Financial Aid Office Leslie R. Kaelin, M.Ed.-Financial Aid Director Cynthia Morse, M.Ed.-Financial Aid Advisor Sr. University of Louisville School of Medicine Instructional Bldg. Suite 230 Health Sciences Center Louisville KY 40292 502-852-5187

Questions? FIRST@aamc.org More Information: aamc.org/FIRST Repayment Videos & Webinars: aamc.org/videowebinars