2011 Graduating Students Exit Loan Counseling

What is an Exit Interview & Why Do I Need to Do It? The FEDERAL government requires that Federal Loan recipients complete Student Loan Exit Counseling prior to graduating or whenever they cease to enroll at least half-time. The purpose of an exit session is to help students understand their rights and responsibilities as a student borrower.

Rights & Responsibilities RIGHTS RESPONSIBILITES Written information Must repay loans Default information Notify loan servicer: Copy of your prom note *change in contact info Repayment information *ability to pay Subsidies, grace, deferment *change in status or Forbearance grad date Prepayment without penalty *failure to enroll *Attend exit counseling

Loan Repayment Timeline

Federal Direct Repayment Options Standard Highest monthly payment - Saves the most in interest Extended Lower monthly payments – Longer term, more interest Graduated Starts off low monthly payment - Increases every 2 yrs Income-Contingent Repayment Based on income to debt ratio – Accrues most interest Income-Based Repayment Based on income to debt ratio – Accrues most interest Available 7/1/09 website

What is New Income-Based Repayment (IBR) is available now. IBR is a new option that will help by keeping your loan payments manageable with payment caps based on your income and family size. IBR will also forgive remaining debt, if any, after 25 years of qualifying payments. The student loans must be in the Direct & Guaranteed (FFEL) loan programs, excluding loans made to parents. This includes Stafford, Grad Plus, and consolidation loans that do not include Parent PLUS loans. Public Service Loan Forgiveness provides assistance to those borrowers who work in public service jobs, including jobs in government at all levels and nonprofit 501 (c) (3) organizations. It will forgive remaining debt after 10 years of eligible employment and qualifying loan payments, including payments under IBR. Please go to the website, for additional informationwww.ibrinfo.org on both these programs and the IBR calculator to see if you qualify.

Income-Based Repayment (IBR) Effective date: July 1, 2009 Eligibility criteria: Available for repayment of FFELP/Direct Stafford, Grad PLUS and Federal Consolidation Loans (FCL) Cannot be used to repay Parent PLUS Loans Cannot be used to repay FCL that included payoff of a Parent PLUS Loan You must have “Partial Financial Hardship”

IBR Basics To enroll in IBR, you have to demonstrate financial need according to a federal formula that will limit monthly payments to no more than 15 % of discretionary income. As long as you demonstrate Partial Financial Hardship – on an annual basis – the monthly payment will be based on a portion of your discretionary income. You can report $0 income – that is be unemployed $0 payments are allowed which count toward the IBR payment limit and the PSLF payment limit After 25 years the unpaid balance will be forgiven, however, this amount may be considered taxable income.

Extended Repayment vs. IBR AGI = $40,000

Things To Consider The first step is to determine what you are doing after graduating. If you do not have a job lined up or are under-employed, you may want to explore available options, which include: Economic hardship deferment Unemployment deferment (actually unemployed) IBR

Additional Information You are STRONGLY encouraged to visit the following websites for more information: AND use one of the on-line repayment calculators to plug in your debt, income, household size information… h/IBRPlan.jsp

Rights & Privileges Deferment Forbearance Cancellations Consolidation Office of Student Financial Assistance Programs – Ombudsman (877)

Deferment (principal & interest) Economic Hardship* Unemployment Continuing Education Military Service (Active duty) You must apply and meet certain criteria… Subsidized loans remain interest free. Unsubsidized loans continue to accrue interest. * Effective July 1, 2009, the formula for qualifying for EHD changed. Most graduates will no longer qualify so you will have to pursue other options.

Postponement Options Economic Hardship Deferment has changed. As of July 1, 2009, the formula is now based on 150% of the poverty level. - EHD Calculator Alternatives: Forbearance IBR

Forbearance (principal only) Must apply annually-use AFTER grace and deferment options have been used Will not extend repayment term No renewed grace period Forms for Direct Loans at: Interest accrues and capitalizes on all loans

Cancellations Volunteers 12 months consecutive service Vista & Peace Corps Military Service12 months consecutive service Active duty Teachers 12 months consecutive service K-12, Title I school, Full Time RN’s and 12 months consecutive service Medical Technicians Law Enforcement 12 months consecutive service includes District Attorneys & Federal/Community Public Defenders

Consolidation Direct Loan website Lower monthly payments Additional interest rate reduction incentives Possible loss of rights from old loans Alternative Loan Programs and Outside Agency Loans WILL NOT QUALIFY

Is Consolidation Right For You? Direct Loans disbursed before 7/1/06 are variable rate loans Direct Loans disbursed after 7/1/06 are a fixed rate at 6.8% The variable interest rate effective 7/1/10: in school, grace or deferment is 1.87%; in repayment or forbearance will be 2.47% Does it make any sense to re-consolidate or consolidate your loans into a separate consolidation? Use the loan calculator to see:

Consequences of Defaulting Derogatory reporting on credit report (will stay on credit report for seven years) Unable to obtain more federal aid Hold on student records and diploma Late fees will be assessed FTB and/or IRS can withhold income tax refund Wages can be garnisheed Lender can declare entire balance due You can be liable for litigation & collection costs (can be up to 65% of principal) Eligibility for deferments & cancellations can be lost, including IBR

How Can I Save Money? Pay during the grace or deferment period – no penalties to prepay loans Pay more than the minimum amount Claim interest on taxes (1098-E) Use shortest repayment period for Direct Loans Pay interest up front on unsubsidized loans Make payments via electronic debit Perhaps consolidate your loans

Taxes-Student Loan Interest Deduction You may be able to deduct the interest you pay on a qualified student loan. And, if your student loan is canceled, you may not have to include any amount as income. More information is available at: and

Budgeting with your net income Net income should be more than when you were a student Consider paying down higher interest rate debt first – such as private loans and credit cards before paying down federal educational loans Consider working with a financial professional (financial planner or CPA)

Where Do I Go To Complete The Exit Interview?

Information You Will Need For the Online Exit Interview Your Social Security Number Your Driver’s License number Name, address and telephone number of your next of kin and/or parent Names, addresses, telephone numbers, and employers of two references residing at different U.S. addresses Name, address and telephone number of your expected employer (if known)

Loan Totals Listed on NSLDS NSLDS (National Student Loan Data System) Loan Amounts of all Federally Backed Student Loans This is now the best option to find out the loan servicing company for your Direct Loans. (800) (800) 4-FED-AID

DON’T FORGET………… It is a Federal Requirement (not Becker’s) to complete the Exit Interview. You can do this electronically by…..

Before you leave Becker… Have you paid all of your Becker charges? Make sure your transcripts and diploma are not held. Check your Insite account or you may contact your representative at Student Accounting.

Conclusion Federal Requirement Address updates Important information If you should have questions, please feel free to contact the Financial Aid Office. (508)

CONGRATULATIONS!