1 Congratulations Class of 2013! From: The Financial Aid Office Team (Atheia, Jacqui, Kristin, Melissa, Sean, Sue, Tom, Usha)

2 Exit Interview Goals  BASICS  Rights/responsibilities  servicer requirements  Verifying the accuracy of your debt  STRATEGIES  Repayment Hierarchy & overall strategies  What to do/when to do it  Forbearance or Income Based Repayment or something else??  Consolidation  Tax Benefits  Don’t Default!!

3 Loans to cover 1) Institutional loans TJU loan Alumni loan Perkins loan PCL Donor named 2) Stafford 3) Grad PLUS 4) Private alternative loans

4 What do you need to submit from the packet???  Statement of Attendance  Survey – we will you a Survey Monkey link  NEED TO COMPLETE THE ONLINE VERSION AT

5 TJU Debt Record  Includes the aid you received in each academic year  Includes any aid you may have received while enrolled at TJU  Loans reflect Principal amount only – payments & interest are not reflected  Bottom of sheet tallies your loans total principal debt by Banner code – various codes used while you have been enrolled. Don’t let this confuse you.

6 Institutional & Institutionally administered Loans  Federal Perkins Loan  Alumni Loan, Simpson Loan, Levi Loan, TJU Loan etc.  Federal PCL and LDS 800)  Serviced by Xerox/ACS, Inc.( 800)  Mailing of payments to: With coupon:Without coupon: Xerox Educational ServicesACS, Inc – CPS Monetary Processing PO Box 3295 PO Box 7061 Milwaukee, WI Utica, NY  All institutional loans get repaid to the University via Xerox (ACS) Your TJU contact person : Rebecca Reynolds 1020 Walnut Street, Room 521 Philadelphia, PA (215)

7 TJU Repayment Schedule  Lists when your payment starts  What the monthly payment will be  What the repayment period is  What the interest rate is  How much interest will accrue over life of loan  What your total loan cost will be (interest and principal)

8 Jefferson is the lender for….  Institutional loans (e.g., TJU Loans, Alumni Loans, Morgan Loan etc.)  Certain Federal Loans Federal Perkins Federal Loans for Disadvantaged Students Federal Primary Care Loans

9 Jefferson Loan Parameters  TJU Loan, Alumni Loan, Donor named loan– 12 month grace only  (note: Wayland, Robt. Wood Johnson, Sledd Cunnison loan have deferment options beyond Grace period) 10 year repayment Fixed 5% interest rate  Wayland, Kellogg, Snyder, Bacharach, and Robt Wood Johnson have reduced interest rates. Cancelled upon Death/permanent disability Jefferson is your lender

10 Federal Perkins Loan Parameters  Federal Perkins – 9 month grace Forbearance is permitted 6 month grace before repayment begins 10 year repayment Fixed 5% interest rate Cancelled upon Death/permanent disability Jefferson is your lender

11 Federal LDS Loan Parameters  Loan for Disadvantaged Students 12 month grace Deferment is permitted for 3 yr Residency 10 year repayment Fixed 5% interest rate Cancelled upon Death/permanent disability Jefferson is your lender

12 Federal PCL Loan Parameters  Primary Care Loan 12 month grace Deferment is permitted for 3 yr Residency 10 year repayment (20 years max if requested depending on loan amount) Fixed 5% interest rate Cancelled upon Death/permanent disability Has requirement to work in Primary Care (as defined in promissory note) while loan is in repayment Jefferson is your lender

13 Federal Stafford Loan (FFELP/Direct Loan)  6 month grace period  Eligible to apply for Forbearance  Can be consolidated with Grad PLUS, Perkins, LDS  If borrowed after 7/1/06 – rate is fixed 6.8%; Rate is variable if borrowed before this date and NOT consolidated.  10 year repayment – can ask for longer repayment period  Cancelled upon Death/permanent disability

14 Federal Graduate PLUS  No grace period (check with servicer- many grant auto-forbearance for 6 mths to align with Stafford)  Eligible to apply for Forbearance just like Stafford  Can be consolidated with Stafford, Perkins, and LDS  Loan is fixed 8.5%; 7.9% if borrowed from Direct Loans ( & after)  10 year repayment – can ask for longer repayment period- (see loan repayment slide)  Cancelled upon Death/permanent dis ability

15 Private Alternative Loans  Usually 6 to 9 month grace (interim) period  Most deferred for at least 3 years during residency – read promissory note or call lender to check parameters on length of deferment and necessary documentation of internship/residency  Interest rate will change as frequent as the index used (LIBOR up to 4 times a year or whenever PRIME rate changes)  there is usually no ceiling on the interest rate.  Not cancelled upon death or permanent disability

16 Finding Your Federal Loans To access, provide: - SS# - Date of Birth - First 2 letters (last name) - PIN # (

17 NSLDS  Lender – who lends the money  Guarantor – who guarantees the funds to the lender if you do not repay  Servicer – MOST IMPORTANT – they have processed your loan, disbursed the funds and will be collecting your payments and working with you on deferment/forbearance

18 Contact all of your loan Servicers REQUIRED!  45 days before or after your last date of enrollment  Update your address  Confirm when your Grace period begins and ends and when first payment is due!!!  Confirm when you should submit your Forbearance form (for Stafford and Grad PLUS)  Confirm your repayment amount  Call first - then follow up in writing if you think this is necessary – keep copy of written letter for your file

19 Forbearance Mandatory that servicer grant forbearance for duration of residency. Forbearance available throughout residency for Stafford, Grad PLUS and Consolidation loans Application required at least annually-some lenders require a form, most will take your request on phone Borrower MUST ask for it Interest accrues and may capitalize on all loans, subsidized and unsubsidized – confirm with your servicer Use only after you have exhausted your grace period

20 Dates To Remember- What to do and when to do it!  If you have consolidated any loans, you have used the grace period and repayment will start immediately at graduation (check with servicer for exact date). Federal Grad PLUS loans have no grace period as well (check with servicer to confirm options as immediate forbearance).   If you used the full 6 month Grace period (between college and TJU, leave of absence) you do not get this again  FILE FORBEARANCE FORM (if form is necessary) WEEKS BEFORE REPAYMENT DUE DATE  If no consolidation or if loan was never in repayment, 6 month grace period still exists.

21 Repayment Hierarchy  Review all of your debt – include credit cards, car loans etc.  Calculate which is the most expensive using interest rate, repayment terms etc.  Start making voluntary payments to the most expensive first  Perkins/institutional loans – cheapest during 1 st year while interest is subsidized

22 Current Repayment Options 1. Standard (Level) Repayment 2. Extended Repayment 3. Graduated Repayment 4. Income Sensitive Repayment – FFELP only 5. Income Contingent – Direct Loans only 6. Income Based Repayment – FFELP and Direct Loans – NEW 7/1/09 7. Pay As You Earn (PAYE) – New 12/2012

23 Loan Repayment Plans Standard (Level) Level monthly payments over 10 year period Higher monthly payments Lowest overall cost Extended Available to new FFELP & Direct Loan borrowers* Fixed or graduated monthly payments Repayment term of 25 years. *Must have an outstanding balance of more than $30,000 in Stafford Loans on or after October 7,1998

24 Graduated Payments start low, increase usually every two years FFELP – must have more than $30,000 outstanding DL – monthly payment calculated based on DL debt and interest rates of loans; never less than monthly interest accrual Higher overall cost - Good for early cash flow, but remember cost! Income Sensitive - FFELP Program Only Payments tied to income Finish in 10 years (may be extended to 15 years) Income Contingent - Direct Loan Program Only Monthly payment amount calculated based on borrower’s household income, family size, and total Direct Loan debt. Loan Repayment Plans

25 Loan Repayment Plans Income Based Repayment (IBR) caps loan payments at 15% of your household income that exceeds 150% of the federal poverty guideline for your family size payment amount will change with increase in income 25 years repayment period Calculation includes ONLY Federal education loans - cannot include Perkins or LDS unless you have had these loans included in a Federal Direct Loan consolidation Must provide income verification (W2s, tax returns, paycheck stub, employment contract). *DEPENDING ON SERVICER* Any balance remaining after 25 years is forgiven but amount is considered taxable!!!

26 Loan Repayment Plans Pay As You Earn Plan – 2012  Direct Loan Program only “new Borrower”  For new borrowers only: You are a “new Borrower” if you Have no Direct or FFEL loans as of 10/1/2007 and Received a Subsidized, Unsubsidized, or Grad PLUS loan disbursement on or after 10/1/2011, or a Direct Consolidation* loan based on an application received on or after 10/1/2011.  *Exception: You are not a new borrower for the PAYE plan if you consolidated loans that otherwise made you ineligible, i.e., loans made prior to 10/1/2007

27 Loan Repayment Plans Pay As You Earn Plan – 2012 (continued)  Modeled on IBR, incorporating statutory IBR changes scheduled to take effect for new borrowers in 2014  Under Pay As You Earn, borrowers pay the lesser of:  10% of discretionary income (income-based payments) or  What they would have paid under the 10-year standard repayment plan (non-income-based payments)  Must demonstrate Partial Financial Hardship (PFH):  20 year repayment period then cancelation/forgiveness of remaining balance. Forgiven portion is taxable. More information available at StudentAid.gov/PayAsYouEarnStudentAid.gov/PayAsYouEarn

Income-Based Repayment  Formula for a Partial Financial Hardship (PFH): Standard payment* > IBR payment  More likely when income is low and debt is high  Max payment in IBR is the Standard amount*  1st post-M.D. year median stipend is $48,700** As originally determined when calculating Partial Financial Hardship based on $185,000 entering repayment ($ total education debt plus $23,000 of capitalized interest from 4-years of school and 6- months of grace). **Preliminary data from AAMC Survey of R/F Stipends and Benefits and AAMC Analysis $2,130 / mo* $410 / mo

Income-Based Repayment Benefits 1. Partial interest subsidy during the first 3 years 2. Unpaid interest does not capitalize when: 1. Annual paperwork is filed timely 2. Borrower demonstrates a PFH 3. Possible loan forgiveness *As reported to the IRS. Annual verification required of both AGI and family size

Income-Based Repayment To enter IBR, borrower must Contact each servicer individually to request Give access to household AGI* (tax records) Inform servicer(s), annually, of family size Demonstrate a Partial Financial Hardship (PFH ) *As reported to the IRS. Annual verification is required of both AGI and family size.

31 Income-Based Repayment Chart IBR Monthly Payment Amount 2009 Annual Income Family Size $10,000$0 $15,000$0 $20,000$47$0 $25,000$109$39$0 $30,000$172$102$32$0 $35,000$234$164$94$24$0 $40,000$297$227$157$87$16$0 $45,000$359$289$219$149$79$9$0 $50,000$422$352$282$212$141$71$1 $55,000$484$414$344$274$204$134$64 $60,000$547$477$407$337$266$196$126 $65,000$609$539$469$399$329$259$189 $70,000$672$602$532$462$391$321$251

32 Income-Based Repayment Determined by Calculating 15% of income that exceeds 150% of the poverty line for a borrower’s family size SEE FAQ in PACKET or also located at Online IBR Calculators

Pay Later (using Forbearance) Pay Now (using Income-Based Repayment) The most feasible options during residency:

Determines the payment amount & interest cost Repayment Plan Comparison

35 10 Year Public Service Loan Forgiveness Must work for a non-profit organization under section 501(c)(3) of IRS code that is exempt from taxation under section 501(a) of the IRS code – includes most not-for- profit private schools, colleges, and universities. Each of the 120 payments must have been made during a period of qualifying employment Must make 120 monthly payments under qualifying plan Only available to those who have loans under the Direct Loan Program (consolidation may be necessary) After 120 qualifying payments, your remaining balance can be forgiven; Payments do not need to be consecutive Must self document Amount forgiven is NOT taxable under PSLF

36 On January 31, 2012, the Department released a voluntary Employment Certification Form that borrowers can submit to the Department for a determination of whether their employment and payments qualify for PSLF Borrower has employer complete employment verification section Borrower submits form to FedLoan Servicing (regardless of who current servicer is) FedLoan Servicing determines whether employment qualifies If employment qualifies, borrower’s loans are transferred to FedLoan Servicing, for a determination of how many qualifying payments were made during the period of employment Borrowers loans remain at FedLoan servicing permanently Borrower can submit the form as often as annually For more, including Q&As, see StudentAid.gov/PublicServiceStudentAid.gov/PublicService 10 Year Public Service Loan Forgiveness

37 Pros and Cons of Public Service Loan Forgiveness Program Will federal funding be available in 10 years?? Will you be required to make career decisions regarding where you work based on program?? Do you have the financial ability to make loan payments as a resident when payments and income are lowest for you?? How much federal debt will remain for forgiveness after 10 years?? Will you have more income potential over a lifetime in the private sector than what would be forgiven in this program???

38 Consolidation Fast Facts  Consolidation takes many federal loans and combines into one loan, one set of new terms, with one lender  Interest rate is determined by calculating the weighted average (+1/8 point) of all loans being consolidated – interest rate is fixed.  Have option of consolidating all federal loans or only some– or none at all  Only one agency offering Consolidation 

39 Consolidation When to consider consolidation: Variable rates are low Multiple servicers to repay To obtain Public Service Loan Forgiveness (DL) To make Perkins or LDS loans eligible for IBR

When to Consolidate  If you consolidate before your grace period is exhausted, you lose the remaining grace period. (Don’t consolidate in June)  Start consolidation days prior to first payment  Can be done online (debt from NSLDS is integrated)  If consolidation is not complete before first payment is due, apply for forbearance on all loans included in the consolidation so no payment is necessary (don’t make any payments after you have started the application).  Once consolidation is done, a new forbearance on the consolidated loan would need to be filed. 40

41 You can prepay your federal student loans with no penalties. make payments towards the highest cost unsubsidized loans that may have the most frequent capitalization. Paying Loans Off Early Unless otherwise noted, loan payments typically are applied first toward collection costs (attorney’s fees, etc.), then interest, and finally principal

42 Loan repayment programs  Military  NHSC  Pennsylvania  Delaware  NIH  Other – see AAMC resource at

43 Tax Benefits  Lifetime Learning Credit  Deduction for student loan interest payments  Tuition and Fee

Full Deduction Partial Deduction NO Deduction Single $60,000 or less $60,001 to $74,999 $75,000 or more Married filing Jointly $120,000 or less $120,001 to $149,999 $150,000 or more The Taxpayer Relief Act of 1997 Student Loan Interest Student loan interest deduction max $2,500 per year Voluntary payments may be eligible Capitalized interest may be included

45 Mortgages  The Financial Aid Office is not the “lender” of any of your loans. Therefore I/we cannot state anything in writing that indicates your eligibility to postpone your loans.  Feel free to take anything already in print from the packet or the book  Or contact your servicer directly.  See the Common Manual handout for info on Mandatory Forbearance

46 IMPORTANT TO REMEMBER!!!!  Don’t default – don’t ignore your debt  After 270 days late, servicer assumes you will not pay  Servicer can garnish your wages and tax refunds  Servicer can sue - you are responsible for costs  Collection agencies take over  Default is recorded on Credit Report  School can withhold records  Professional Licenses are pulled in a growing number of states  Student loans rarely discharged in bankruptcy  Keep all your servicers updated as to phone numbers, address, change in residency status  Call your servicer if you need help  Call Financial Aid Office – we are here to help for as long as you need it

47 Student Loan Ombudsman  The student can contact the Ombudsman’s office if unable to resolve any loan difficulties with the school, lender, servicer or guarantor. The contact information for the Student Loan Ombudsman’s Office is: Office of the Ombudsman Student Financial Assistance U.S. Department of Education FSA Ombudsman 830 First Street, NE 4th Floor Washington, DC  Customer Service Line (877)  Website:

48 Summary  Reconcile your records to the Financial Aid Office records to your servicers records  Contact your servicers to update address/phone number etc.  Find out when the grace period starts and ends and when first payment is due and then ask how soon before you should file your forbearance request. DON’T SUBMIT TOO EARLY!  Make schedule and submit all paperwork when necessary or make payment by due date if not forbearing.  Don’t wait until last minute to get your finances in order. Know what you have!  Ask questions.

49 University Office of Student Financial Aid 1025 Walnut Street, Room G-1 Philadelphia, Pa If you need an appointment, call the office to schedule a time!!