Presenter’s name Presenter’s title Spring 2011

Student Loans and Debt ManagementExit Interview

Disclaimer: All information and estimates are based on AAMC interpretation of federal regulations as of January 2011 and are subject to change. These are estimates only. Students should always contact their servicer(s) to discuss exact loan balances and repayment options.

86% of class report having educational debt

59% of class report debt $150,000 or higher

All Schools Public Schools

Private Schools

Mean $157,944 $148,222 $172,422

Median $160,000 $150,000 $180,000

Class of 2010 IndebtednessRefer to page 1

“An investment in knowledge always pays

the best interest”

- Benjamin Franklin

AgendaKnow Your Loan Portfolio

How to Postpone Payments

Repayment Plans

Options During Residency

Other Considerations

Know Your Loan Portfolio

Master Promissory Note

Refer to page 6

A contract with the lender

Has a multi-loan feature

Rights and Responsibilities

Details Terms and Conditions

Rights include the ability to:

Prepay any federal loan without penalty

Request a shorter repayment schedule

Change repayment plans

Request a deferment or forbearanceReview your promissory note for all rights

Refer to page 7

Responsibilities include:

Make on time loan payments Make payments despite receipt of billNotify the lender of changes in contact infoAttend an Exit Counseling sessionReview your promissory note for all responsibilities

Refer to page 7

A Serious Obligation

Student loans must be repaid

Manage your debt -don’t let it

manage you

Refer to page 6

DelinquencyDefault

Refer to page 8

Consequences of…

Terms and Conditions

Discharge may be available in cases of:

Review your promissory note for all terms

Finding Your Federal Loans

To access, provide:

- SS# - Date of Birth- First 2 letters (last name)- PIN # (www.pin.ed.gov)

www.nslds.ed.gov

Refer to page 4

Refer to page 11

Interest Rates

Repayment StrategyPrioritize repayment efforts –

pay the most expensive debt FIRST!

Capitalization

Addition of unpaid interest to the principal

Principal + Interest = Larger Principal

$160,000$182,670

$22,670

Refer to page 11

Repayment StrategyPay the interest on

unsubsidized loans PRIOR to capitalization

Loan Repayment TimelineRefer to page 13

How to Postpone Payments

Deferment

A period when payments are not required

Must apply and qualify

Interest does not accrue on subsidized loans

Unsubsidized loans continue to accrue interest

NOTE: For more details on forbearance or to request a forbearance, contact your servicer.

Postponement OptionsRefer to page 15

Forbearance

A period when payments are not required

Must request from the lender/servicer

Interest accrues on sub and unsub loans

Many types (administrative, discretionary, mandatory)

NOTE: For more details on forbearance or to request a forbearance period, contact your lender/servicer(s).

Mandatory Medical Residency/Internship

Used to postpone payments

Interest accumulates on sub and unsub loans

Requested annually from lender

Continuous periods may avoid capitalization*

*Check your servicer’s capitalization policy

Repayment Plans

Determines the payment

amount &

interest cost

Refer to page 18

$2,100/mo

$1,300/mo

$1,000/mo

$ 610/mo

$ 390/mo

Equal monthly payments Higher monthly payments Lower total cost

Repayment Plans

Repayment term of 25 years Low monthly payment Likely the most expensive option

Refer to page 18

Lower initial payments (tied to income)Possible higher costs

Repayment Plans

Payments start low, increase over time Possible higher costs

Likely the lowest monthly payment

Refer to page 19

Effects of each Repayment Plan on Total Cost

Repayment PlansRefer to page 24

Debt FactThe lower the monthly payment…

the higher the interest cost

Estimated Monthly Payment Amounts

Repayment PlansRefer to page 22

Options During Residency

The most feasible options during residency:

Pay Later (using Forbearance)

Pay Now (using Income-Based Repayment)

Income-Based Repayment

IBR Repayment Plan

Based on household AGI* and family size

Partial interest subsidy during the first 3 years

Unpaid interest does not capitalize when:• Annual paperwork is filed timely• Borrower demonstrates a PFH

*As reported to the IRS. Annual verification required of both AGI and family size

To obtain IBR, borrower must do the following

Contact each lender individually to request

Inform lenders, annually, of family size

Give lenders permission to access tax returns

Demonstrate a Partial Financial Hardship (PFH)

Formula for a Partial Financial Hardship (PFH):

Standard payment* > IBR payment

More likely to occur when income is lower and debt is higher

Max payment in IBR is the Standard amount* 1st post-M.D. year median stipend is $47,700

* As originally determined when calculating Partial Financial Hardship based on $182,000 entering repayment ($160,000 total education debt plus $22,000 of capitalized interest from 4-years of school and 6-months of grace).

$2,100 / mo* $390 / mo

Determined by Calculating 15% of income that exceeds 150% of the poverty line for a borrower’s family size

Online IBR Calculators

www.finaid.orgwww.IBRinfo.org

www.aamc.org/FIRST

Repayment Strategy To reduce the cost of

student loans - make extra payments

Other Considerations

Eligible Loans

Qualifying Payments

Qualifying Work

Public Service Loan Forgiveness

Loan ForgivenessRefer to page 37

Other programs listed at AAMC website:

Loan Forgiveness

www.aamc.org/stloan

NIH Loan Repayment Programs:

NHSC Repayment Program:

www.lrp.nih.gov

www.nhsc.hrsa.gov/loanrepayment

Private Loans

Details of Private Loans

Typically unsubsidized for life of loan

A grace period/forbearance may be available

Cannot be included in IBR or PSLF

Be cautious when consolidating private loans

Refer to page 40

Federal Loan Consolidation

When to consider consolidation:

Variable rates are low

Multiple lenders to repay

To obtain Public Service Loan Forgiveness (DL)

To make Perkins or LDS loans eligible for IBR

Refer to page 38

Federal Loan Consolidation

Effects of consolidating

A longer term will increase the interest costs*

Able to prepay or change repayment plan

A new loan with new benefits**

May negatively affect grace, deferment, or forgiveness options

* The rate will be a weighted-average that may be rounded up to the nearest 1/8th

** Forfeiture of original borrower benefits is likely. Future borrower benefits vary by lender.

Refer to page 38

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

www.irs.gov/publications/p970

Taxpayer Relief Act of 1997

Student loan interest deduction max $2,500 per yearVoluntary payments may be eligibleCapitalized interest may be included

Refer to page 39

Check your Credit Report

www.annualcreditreport.com

Refer to page 29

The FIRST Stop…

www.aamc.org/FIRST

Medloans® Organizer and Calculator

Refer to page 3

Your residency program

Your loan servicers’ and their websites

FIRST for Residents Mailbox

Your medical school financial aid office

Support Along the Way

FACEBOOK: FIRST for Medical Education

www.aamc.org/FIRST

www.ombudsman.ed.gov

Questions?

FIRST@AAMC.org

Presenter’s name Presenter’s title Spring 2011

Documents

Adversary Defense: Past, Present, Future Presenter’s Name Here Presenter’s Title Here

CHAPTER 4 MEASURES OF LEVERAGE Presenter’s name Presenter’s title dd Month yyyy

CORPORATE GOVERNANCE CHAPTER 1 Presenter’s name Presenter’s title dd Month yyyy

CHAPTER 16 MULTINATIONAL OPERATIONS Presenter’s name Presenter’s title dd Month yyyy

An insider’s guide to getting published in research journals Presenter’s name Presenter’s job title Presenter’s affiliation E-mail: Presenter’s e-mail

SHRP 2 Naturalistic Driving Study [Presenter’s Organization] [Presenter’s Name]

Java SE 7: The Platform Evolves Presenter’s Name Presenter’s Title

Fraud Awareness Protecting Organizations and Their People Presenter’s Name Presenter’s Title Presenter’s Contact Info

Mod6 - Shipping Presenter’s Name Presenter’s Title

Presentation Title Presenter’s Name

Getting Started with Electronic Portfolios Presenter’s Name Presenter’s Title

Presenter’s Name Local Contact Information

What’s new in SEP 12.1.5 Presenter’s Name Here Presenter’s Title Here

Presenter’s Name Presenter’s Title Smoothing the DB2 version migration path!

Presenter’s Name Presenter’s Command Local Contact Informationlouisville.edu/armyrotc/files/Cold Weather Injury Prevention Training (2).pdf · Presenter’s Name Presenter’s

CHAPTER 3 FINANCIAL REPORTING STANDARDS Presenter’s name Presenter’s title dd Month yyyy

Presenter’s name Name of Presentation

Presenter’s Name | Presenter’s Title Trimble Business Center€¦ · Presenter’s Name | Presenter’s Title Trimble Business Center: Data Hub for Construction + Geospatial Workflows

SHRP 2 Naturalistic Driving Study [Presenter’s Organization] [Presenter’s Name] [Presenter’s Title] Accelerating solutions for highway safety, renewal,

About us or enter your title here Presenter’s name Presenter’s title