Loan Repayment Options

REPAYMENT PLANS Standard Extended Graduated Income Based Repayment (IBR) Pay As You Earn (PAYE) Income Contingent Repayment (ICR) Income Sensitive Deferment Forbearance Consolidation (not a plan but option)

Active Direct Loan Servicers FedLoan Servicing (PHEAA) - Consolidation - PSFL Granite State - GSMR Sallie Mae - Consolidation MOHELA Nelnet - Consolidation OSLA Servicing Great Lakes Educational Loan Servicing - Consolidation VSAC Federal Loans Aspire Resources, Inc.CornerStone ESA/Edfinancial

Studentloans.gov

Standard Repayment Traditional level pay, 120 payments Direct and FFELP Loans – Subsidized, Unsubsidized, all PLUS

Extended Repayment Repayment timeframe up to 25 years Borrowers must have $30,000 outstanding loans Payments may be fixed or graduated Direct and FFELP Loans – Subsidized, Unsubsidized and PLUS

Graduated Repayment Ten year repayment Payments are lower first two – three years then increase every two years Direct and FFELP Loans – Subsidized, Unsubsidized and all PLUS

Income Based Repayment (IBR) Direct and FFELP Subsidized, Unsubsidized PLUS made to students and consolidation 15% discretionary income guideline Payments change with income, per calendar year Up to 25 years repayment Forgiveness potential

Pay As You Earn (PAYE) Direct Subsidized, Unsubsidized, PLUS to students and Direct Consolidation Specific borrowing guidelines 10% of discretionary income Up to 20 years repayment Forgiveness potential

Income Contingent Repayment Plan Direct Subsidized, Unsubsidized, PLUS to students and Consolidation Payments calculated based upon borrowers adjusted gross income, family size and Direct Loan debt Up to 25 years repayment Forgiveness potential

Income Sensitive Repayment Plan FFELP Subsidized, Unsubsidized, PLUS and Consolidation loans Payments calculated based upon annual income Up to 10 year repayment Each lenders’ formula differs

Comparing Income-Driven Plans PAYEIBRICR Eligibility Eligible LoansDirect LoansDirect Loans & FFELP LoansDirect Loans Must be a "New Borrower"Yes *No Payment Formula Protected Income150% of poverty guideline 150% of poverty guideline 100% of poverty guideline Affordable Payment10% of discretionary income15% of discretionary income20% of discretionary income Benefits Loan ForgivenessBalance after 20 years (240 qualifying payments) -10 years if PSLF Balance after 25 years (300 qualifying payments) -10 years if PSLF Balance after 25 years (300 qualifying payments) -10 years if PSLF *New borrower: 1) No Direct or FFELP loans/balance as of 10/1/07 AND 2) Received Sub, Unsub, GradPlus disbursement on/after 10/1/2011 or Direct Consolidation based on application received on/after 10/1/11

TEMPORARY (PAYMENT) POSTPONEMENT OPTIONS DEFERMENT is a period when payments are NOT required Borrower must apply, meet qualifications, and receive approval Interest will continue to accrue on Unsubsidized and PLUS loans Interest will NOT accrue on Subsidized loans Very few real deferments still exist FORBEARANCE is a period when payments are NOT required Borrower must apply, meet qualifications, and receive approval (usually, on a 6-12 month basis) Interest will continue to accrue on Unsubsidized and PLUS loans AND Interest WILL accrue on Subsidized loans Types are: administrative, discretionary, etc. Interest can capitalize, again, at the granting of forbearance or any change in repayment plan type

Loan Consolidation January 2, 2014, new consolidation process Four servicers: – FedLoan Servicing (PHEAA) – PSLF servicer – Sallie Mae – Great Lake Educational Loan Services, Inc. – Nelnet Exception – defaulted loan(s) which is assigned to U.S. Dept. of Education

Loan Consolidation More streamlined process – NSLDS information pulled into application – Borrower selects servicer – PSLF assigned to FedLoan Servicing – Pulls in reference information if borrower has previously completed loan application via studentloans.gov – IRS data retrieval for income based repayment programs

“Word on the street?” Public Service Loan Forgiveness (PSLF) President Obama’s budget Burdensome educational loan debt Navigating multiple servicers Navigating multiple repayment options Automatic income based repayment

References “Automatic For the Borrower: How Repayment Based on Income Can Reduce Loan Defaults and Manage Risk” Federal Student Aid, Mary Fenton, UNM HSC Director of Student Financial Aid Services, NASFAA,

References Nelnet Sallie Mae Great Lakes FedLoan Servicing NSLP - Inceptia FSA New Mexico Student Loans