2019 Financial Aid Exit Interview College of Dentistry University of Illinois at Chicago

Your Loan Summary Complete Exit Interview here: https://studentloans.gov/myDirectLoan/counselingInstructions.action Your Loan Summary is based on information from the National Student Loan Database System (NSLDS). NSLDS does not include private or institutional loan information. You should review your loan information for Stafford, PLUS, and Perkins Loans at www.nslds.ed.gov. You should review HPSL Loans at www.conduenteducation.com.

Please Consider Multiple ways to effectively handle your student loan debt Constantly evaluate your repayment objectives and repayment plan, and change as needed Work closely with loan servicers

Objectives Know what you borrowed, who services your loans, and when they come due Identify and constantly review your repayment objectives Consider repayment options to help meet your repayment objectives

Loan Servicers See www.NSLDS.ed.gov for your servicer Your federally owned loans should all be serviced by one loan servicer See www.StudentLoans.gov for details on loans See credit report or financial aid office for loans not listed on NSLDS Important to keep contact information current

Your Rights and Responsibilities You have the right to notification in writing if your loan is sold or transferred to another lender. You have the right to prepay all or any portion of your loans without penalty. You have the right to a minimum of 10 years to repay your loans unless you consolidated and qualify for an extended repayment schedule. You are responsible for your loan and accrued interest. You are responsible for notifying your lender if you change your name, address, Social Security number, etc.

Default Failure to repay a loan according to the terms of the promissory note is called default. If you cannot make your payment, it is your responsibility to contact your lender(s) and request a deferment or forbearance.

Default Repercussions If debtor enters default, the entire balance of the loan may become due immediately. Loan defaults will be reported to credit bureau's, which will result in a negative credit report. Wages may be garnished. Debtors account may be forwarded to collection agency. Debtor may lose their professional license.

Typical Grace Periods Most direct loans have 6-month window period before repayment starts Called a grace period on direct unsub loans Called a 6-month post-enrollment deferment on direct PLUS Perkins loans have 9-month grace period HPSL and LDS have 12-month grace period Check terms on institutional and private loans If you are planning on using a deferment, you must wait until after your grace period is exhausted.

Stafford Loans Stafford Unsubsidized Loan *Grace Period: 6 months *Repayment Length: 10-25 years (repayment depends on plan you choose) *Eligible for Consolidation: Yes *Eligible for Deferment/Forbearance: Yes *Interest accrues during deferment.

Graduate PLUS Loan Grad PLUS Loan *Repayment begins 6 months after graduation *Repayment Length: 10-25 years (repayment depends on plan you choose) *Eligible for Consolidation: Yes *Eligible for Deferment/Forbearance: Yes *Interest accrues during deferment.

Health Professional Student Loan (HPSL) HPSL Loan *Grace Period: 12 months *Interest Rate: 5% *Repayment Length: 10-20 years (repayment depends on plan you choose) *Eligible for Consolidation: Yes *Eligible for Deferment: Yes *Forbearance: Negotiable *No interest accrues during deferment.

Private Loans Private Loans *Grace Period: Varies by year and lender *Interest Rate: Varies by lender *Repayment Length: Varies by year and lender *Eligible for Consolidation: No *Eligible for Income Driven Repayment: No *Eligible for Deferment: Yes *Forbearance: Yes *Interest accrues during deferment.

Postponement Options Deferment: School-based postdoctoral program Graduate fellowship Forbearance: Multiple options if you don’t qualify for deferment or have used up eligibility Work with loan servicer See www.StudentLoans.gov for details

Deferment A deferment is period of time when a borrower is exempt from having to immediately begin repaying a loan. Deferments are regulated by the lender. The criteria for deferment is set by the lender. Typical deferment conditions are continuing education, economic hardship, inability to find full-time employment, and active military duty. If you enroll in residency program more than half-time, you will continue to qualify for an in-school deferment. Please note that you must continue to repay your loans until you have been notified that your deferment request has been granted.

Forbearance Forbearance occurs when your lender agrees to either temporarily reduce or postpone your student loan payments. If you are granted a forbearance, interest will continue to accrue regardless of the type of loan you have. Always see if you are eligible for a deferment first, due to the way that the subsidized loan interest is treated.

Repayment Options Standard Plan is a fixed annual repayment paid over a fixed period not to exceed 10 years. A Graduated Plan is paid over a fixed period of 10 years. The payments start relatively low and then increase, generally every two years. Extended Plan for borrowers with more than $30000 can repay their loan with a fixed or graduated amount for a period that cannot exceed 25 years. For Perkins or HPSL, you should contact your lender. https://studentaid.ed.gov/repay-loans Repayment Options

Repayment Options Standard 10 year Graduated 10 year Extended 25 year Income-driven repayment (IDR)Income-Contingent Repayment Plan (ICR) Income-Based Repayment Plan(IBR) Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE)

Standard Repayment 120 level payments Calculations not dependent on income You get this plan if you don’t choose one when given opportunity by loan servicer Possibly part of strategy for dental hygiene graduate with Relatively low debt Steady income moving right into employment Other resources

Graduated 10 Year Repayment 120 payments that increase in designated amounts at designated intervals Total repayment cost higher unless payments accelerated Possibly part of strategy for dental hygiene graduate who could otherwise afford Standard 10 year but who has other short term obligations

Extended 25 Repayment 300 level payments Total repayment much higher if held to term and payments not accelerated Possibly part of strategy for dental hygiene graduate who has high debt and wants same payment each month Needs to show lower debt-to-income ratio Could afford higher payment but wants a lower required payment each month

Income Driven Repayment (IDR) Designed for highly indebted borrowers who cannot afford repayment under other plans, most notably Standard 10 year The bigger the gap between debt and income, more likely these plans are needed Monthly payments change annually, as you must “recertify” your income and family size each year.

Income Driven Repayment (IDR) Designed for highly indebted borrowers who cannot afford repayment under other plans, most notably Standard 10 year Discretionary income is the amount of income remaining after deduction of taxes, other mandatory charges, and expenditures on necessary items. It’s essentially the income you have left over after paying all necessary and required living expenses.

IDR Pros and Cons Advantages: More manageable monthly payments May lead to forgiveness May help build credit Disadvantages: Payments may not cover interest, if gap between debt and income is high Budgeting may be a challenge, since payments change annually Plan forgiveness is subject to income tax

Income Driven Repayment (IDR) You may pay more interest. Reduced payment generally extends your repayment period. You must submit annual documentation. Government pays interest on Subsidized Loan up to 3 years. Forgiveness for payments made over a period of 25 years. You may pay taxes on any loan amount that is forgiven after 25 years. https://studentaid.ed.gov/sa/repay-loans

Income Based Repayment (IBR) 20 years if you’re a new borrower after July 1, 2014. You’d pay 10% of your discretionary income. 25 years if you’re a borrower before July 1, 2014. You’d pay 15% of your discretionary income. Forgiveness for payments made over a period of 20/25 years. You may pay taxes on any loan amount that is forgiven.

Pay As You Earn (PAYE) Lower payments 10% of discretionary income Payments capped at Standard 10 year amount Shorter repayment period 20 years Limit on capitalization 10% of original principal borrowed

Pay As You Earn (PAYE) based on your income and family size; 10% of discretionary income adjusted each year, based on changes to your annual income and family size; If your PAYE payment amount doesn’t cover the interest that accrues on your loans each month, the government will pay your unpaid accrued interest on your Direct Subsidized Loans never more than the 10-year standard repayment amount; Forgiveness for payments made over a period of 20 years.

Differences between PAYE and IBR PAYE capped at 10% of discretionary income (IBR is generally 15%) PAYE Open to all borrowers on their direct loans regardless of income and regardless of when they first started borrowing PAYE has loan forgiveness after 20 years (25 if you borrowed Graduate Loans). IBR is 25 years

Differences between PAYE and REPAYE Both PAYE and REPAYE are capped at 10% of discretionary income. PAYE can’t exceed standard 10 year payment. REPAYE has no payment cap With PAYE spousal income not considered if filing separately. Spousal income considered with REPAYE PAYE has loan forgiveness after 20 years. REPAYE is 25 years With PAYE, interest capitalization is capped at 10%. REPAYE has no limit.

Differences between PAYE and REPAYE With PAYE, there is an income requirement that looks at income and family size. There is no requirement with REPAYE separately. With PAYE has no subsidy on interest. With REPAYE, government will pay 50% of interest if interest payment is higher than payment amount.

Takeaways to remember Income-driven repayment plans provide responsible borrowers with high debt a way to effectively manage their loan debt Consider other more aggressive plans first, then “back into” use of IDRs No penalty for overpayment on IDRs Work with loan servicer on IDRs Apply online at www.StudentLoans.gov

Consolidation Consolidation is the process of combining two or more loans into a single loan with a single set of monthly payments. The interest rate for a consolidated loan is fixed for the life of the loan. The fixed rate is based on a weighted average of all of the loans that you choose to consolidate. You can consolidate during your grace period or during periods of deferment or forbearance. You can also consolidate once you’ve entered repayment.

Consolidation Pros and Cons Federal consolidation may be an effective debt management tool for some borrowers Many recent and upcoming graduates are not strong candidates because all their loans are direct and serviced by one loan servicer You are interested in aggressive repayment and want to target additional funds on your most expensive loan You already have one loan servicer Your entire student loan portfolio is in the direct loan program

Public Service Loan Forgiveness www.StudentAid.ed.gov/publicservice Three things must happen at the same time in order to qualify for PSLF Borrowers must: Make 120 timely, scheduled payments with an eligible repayment plan like IBR, PAYE or REPAYE* On eligible loans (only direct loans qualify) While working full time (at least 30 hours) for an eligible employer

IDR Forgiveness PAYE forgiveness provisions Balance forgiven after 20 years* Not dependent on type of employment Balance forgiven considered taxable income IBR and REPAYE forgiveness provisions Balance forgiven after 25 years*

Remember • Make a budget and stick with it. • If you don’t understand something, call your loan holder or loan servicer or your financial aid office. • Keep all student loan documents in a file. • Open all your mail and read everything pertaining to your student loans. • Keep in contact with your loan holder or loan servicer and keep your address current. • Make all regularly scheduled payments.

Additional Resources AAMC/ADEA Dental Loan Organizer and Calculator (AAMC/ADEA DLOC)– www.ADEA.org/DLOC •https://studentloans.gov/myDirectLoan/repaymentEstimator.action Repayment Estimator with your actual loans. •www.NSLDS.ed.gov Federal loan database •https://www.irs.gov/publications/p970 Information on student loan interest deduction

OSFA Contact Information Office of Student Financial Aid (MC 334) Room 1800, Student Services Building 1200 West Harrison Street Chicago, Illinois 60607-7163 Phone: (312) 996-3126 E-mail: tjhard@uic.edu Web Site: https://financialaid.uic.edu/