Residency Loans Residency Living Student Loans October 6, 2008

 Interest Rate  Grace  Forbearance  Repayment

The interest rate on your loan will be based on one of following financial indexes Prime  Rate that US banks lend money +/- percentage points LIBOR  London Interbank Offered Rate + percentage points

 Interest rate will be a variable interest rate for the life of the loan  May not be a cap on the interest rate  Rate is based on your credit score

 Repayment begins when you are no longer a full-time student  Grace period varies by lender-check promissory note  Forbearance options also vary by lender- check promissory note  Interest continues to accrue during grace and forbearance

The calculations assume the loan is taken in October of the M4 year and is followed by a 3 year residency in which a forbearance is granted. 10 Year Loan Repayment 5% Interest Rate 11.75% Interest Rate Loan Amount $6,000 Principal at Repayment $7,125$8,644 Finance Charges Over Life of Loan $3,069$8,732 Monthly Payment $76$123 Repayment Terms 120

10 Year vs 25 Year Loan Repayment 5% Interest Rate 11.75% Interest Rate Loan Amount $6,000 Principal at Repayment $7,125 $8,644 Finance Charges Over Life of Loan $3,069$6,496$8,732$20,831 Monthly Payment $74$41$123$89 Repayment Terms The calculations assume the loan is taken in October of the M4 year and is followed by a 3 year residency in which a forbearance is granted.

Interview Tips Average expenses between $3,500-$5,000 Stay with family and friends Room with other students interviewing in same area Schedule interviews in one location at same time Contact program for interview if already going to be in area Rent a car to check out the area Take a cab so you don’t get lost

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Your good credit is one of the most valuable assets you own

 A good score can mean that “life” will cost you less, and thus you can afford more: Better loan terms (student, auto, mortgage) Lower Interest rates on credit cards Faster credit approvals Reduced security deposits on rentals © AAMC May not be reproduced without permission.

Each of the three credit reporting agencies are required by law to provide one free credit report to you annually Equifax ExperianTransUnion This is the site to obtain your free copy

 Regularly monitor your financial information (every 4 months)  Verify that the information contained in the report is correct  Report any discrepancies to the credit agency  Clean up any negative reporting

The number one indicator of your financial health Range is (the higher, the better) Shows a lender your credit worthiness Determines the cost of your debt Named after the company, Fair Isaac Corporation, that produces the score © AAMC May not be reproduced without permission.

35% 30% 15% 10% Payment history Amounts owed Length of credit history New credit Type of credit used © AAMC May not be reproduced without permission.

Home Price: $250,000 Loan: 30-year Fixed Rate FICO Interest Rate Payment 760+…………...………6.106%………...……….$1, ………….… %…………………$1, ……………….6.612%………………....$1, ……………….7.422%………………....$2, ……………….9.452%…………………$2, …………...…10.311%………….……..$2,702

Residency Living

AnnualMonthly Residency Stipend$46,000$3,833 Payroll Taxes$12,132$1,011 Net Spendable Income $33,868$2,822

Monthly Gross Pay$3,833 Federal Withholding$537 Social Security$238 Medicare$56 Nebraska Withholding$181 Net Spendable Income$2,822

Category Suggested Percentage Monthly Amount Housing36%$1,016 Food12%$339 Auto12%$339 Insurance-Health, Life5%$141 Debt5%$141 Entertainment/Recreation6%$169 Clothing5%$141 Savings5%$141 Medical/Dental Expenses4%$113 Miscellaneous5%$141 Investments/Retirement5%$141 Net Spendable Income$2,822

Take advantage of pre- tax deductions to increase your take home pay

Category Suggested PercentageMonthly Amount Housing36%$1,016 Food12%$339 Auto12%$339 Insurance-Health, Dental, Life5%$141 Debt5%$141 Entertainment/Recreation6%$169 Clothing5%$141 Savings5%$141 Medical/Dental Expenses4%$113 Miscellaneous5%$141 Investments/Retirement5%$141 Net Spendable Income$2,822

Savings from Pre-Tax Deductions Monthly Gross Wages$3,833 Federal Withholding$537$445 Social Security$238 Medicare$56 Nebraska Withholding$181$157 Health Insurance$115 Medical/Dental$113 Retirement$141 Net Pay$2,822$2,569

Savings from Pre-Tax Deductions Monthly Gross Wages$3,833 Taxes$1,012$896 Health Insurance$115 Medical/Dental$113 Retirement$141 Post Tax Payments$369 Spendable Income Balance$2,453$2,569

Student Loans

 A student loan portfolio can be complex  Each loan type has its own set of terms and conditions to consider  Understanding your loan portfolio is the first step in effectively managing its repayment  TIP: Know who your servicer is. © AAMC May not be reproduced without permission.

All federal loans can be found at All federal, private and institutional loans can be found on your credit report

In school, Grace and Deferment Forbearance, Repayment Stafford Loans (disbursed on or after 7/1/06) 6.8% Fixed 6.8% Fixed Stafford Loans* (disbursed between 7/1/98 and 6/30/06 ) 3.61% Variable 4.21% Variable Grad PLUS Loans** 8.5% Fixed 8.5% Fixed Perkins Loan / PCL / LDS 5.0% Fixed 5.0% Fixed Private Loans Typically Variable – Check the Promissory Note Institutional Loans Varies by Loan – Check the Promissory Note Consolidation Loan Fixed rate based on weighted average interest rate of underlying loans rounded up to nearest one-eighth of a percent (capped at 8.25%) * Variable, changes every July 1 based on the 91-day treasury bill ** Interest rate for Direct Grad PLUS Loans 7.9% © AAMC May not be reproduced without permission.

 There are many options with student loans during residency and beyond: To Postpone Payments  Grace  Deferment  Forbearance To Reduce Payments  Interest Only Payments  Change the Repayment Plan © AAMC May not be reproduced without permission.

 Standard (Level) Repayment ◦ 10 year repayment with a fixed monthly payment  Graduated Repayment ◦ 10 year repayment with smaller early year payments  Extended Repayment ◦ 25 year repayment with a fixed monthly payment

 Income Sensitive Repayment (FFEL) / Income Contingent Repayment (DL) ◦ Payment is 20% of difference of Adjusted Gross Income less 100% poverty level ◦ Balance remaining after 25 years is forgiven-the amount of debt forgiven is treated as taxable income  Income-Based Repayment ◦ Payment is 15% of difference of Adjusted Gross Income less 150% of poverty level ◦ Balance remaining after 25 years is forgiven-the amount of debt forgiven is treated as taxable income ◦ Public Service Loan Forgiveness available

Karen Malloy Financial Aid Coordinator Creighton University