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Student LoanDebt ManagementBROWN SCHOOL OFFICE OF FINANCIAL AID
Fall 2015
What We’ll Covero Preparation
o Types of loanso Direct vs. FFELo NSLDSo Interest rates
o Repayment Plans
o Loan Forgivenesso Public Service Loan Forgivenesso Perkins loan discharge
o Consolidation
o Deferment/Forbearance
o Planning Ahead
Preparation: Before You Leave School
PreparationTypes of loans
o Unsubsidized Stafford loan
o Interest accrues beginning when the loan is disbursed
o As of July 1, 2012, graduate students are no longer eligible for Subsidized Stafford loans
o Graduate PLUS loan
o Interest accrues beginning when loan is disbursed
o Requires a new credit approval for each new loan or loan increase
o Perkins loans
o Interest begins accruing when repayment begins
o May not be available after 2015-2016 academic year
o Not eligible for alternative repayment plans (unless consolidated)
PreparationLoan Programs
o Direct Loans
o Originated by the Department of Education
o Starting in 2010-2011 academic year, all federal student loans are originated by Department of
Education as Direct Loans
o FFEL Program
o Federal Family Educational Loan Program
o Prior to July 1, 2010, some federal loans were originated by private banks or lenders
o FFEL loans are not eligible for some repayment plans
PreparationWhen does repayment begin?
o Stafford loans (Subsidized & Unsubsidized): six-month grace period
o PLUS loans: six-month grace period
o Perkins loans: nine-month grace period
Graduation Date
Loan Type May August December
Stafford November February June
PLUS November February June
Perkins February May September
PreparationNational Student Loan Data System (NSLDS)
o Comprehensive overview of all federal student loans
o Includes undergraduate and graduate borrowing history
o Lists each loan individually, including servicer contact information & interest rates
o Exit Interview process prior to graduation
o Financial Aid Review
Preparation
Click each individual loan to expand the information
Total outstanding loan debt
Preparation
Preparation
Loan Interest Rates
Perkins UnsubsidizedStafford
PLUS
Prior to July 1, 2013 5% 6.8% 7.9%
July 1, 2013 – June 30, 2014
5% 5.41% 6.41%
July 1, 2014 – June 30, 2015
5% 6.21% 7.21%
July 1, 2015 – June 30, 2016
5% 5.84% 6.84%
PreparationInterest CalculationDaily interest amount = (Current Principal Balance x Interest Rate) ÷ 365.25Monthly interest amount = (Daily Interest Amount x number of days in the month)
For example, for a student loan balance of $20,500 with an interest rate of 5.84%, the monthly interest would be calculated as follows:
Daily interest amount: ($20,500 x .0584) ÷ 365.25 = $3.2778Monthly interest amount: $3.28 x 30 (typical month) = $98.40
Interest Saving Calculator
Repayment Plans
Repayment PlansStandard
o Plan you are automatically enrolled into upon signing MPN
o Based on 10-year repayment schedule
o Higher monthly payments
o Repaid in shortest time period, less interest accrued
o Direct and FFEL are eligible
Repayment PlansExtended
o Must have at least $30,000 in outstanding loans
o Up to 25 years to repay
o Lower monthly payments than Standard plan
o More interest repaid over longer timeline
o Direct and FFELL are eligible
Repayment PlansGraduated
o Up to 10 years to repay
o Lower monthly payments to start, increase every two years
o Will pay more interest than Standard plan
o Direct and FFELL are eligible
Repayment Plans: Income-DrivenWhat is an Income-Drive Repayment Plan?
o Repayment amount is a percentage of your discretionary income
o Must submit annual documentation
o Up to 25 years to repay
o Must pay taxes on any balance cancelled after 20 or 25 years
o Required for Public Service Loan Forgiveness (PSLF)
Repayment Plans: Income-DrivenWhat is an Income-Drive Repayment Plan?
o Revised Pay As You Earn (REPAYE) – NEW
o Pay As You Earn (PAYE)
o Income-Based Repayment (IBR)
o Income-Contingent Repayment (ICR)
Repayment Plans: Income-Driven
Repayment Plans: Income-Driven
Repayment Plans: Income-Driven
Repayment Plans: Income-Driven
Repayment Plans: Income-Driven
Repayment Plans: Income-Driven
Repayment Plans: Income-Driven
Repayment PlansTotal debt: $57,000Unsubsidized Stafford: $41,000 (5.84%)Graduate PLUS: $16,000 (6.84%)
Tax filing status: SingleHousehold size: 1Adjusted Gross Income: $37,000
Navient loan repayment calculator
Loan Forgiveness
Loan ForgivenessPublic Service Loan Forgiveness (PSLF)
o Must be full-time in public services
o Full-time is defined by the organization, but not less than 30 hours/week
o Multiple positions that total at least 30 hours can qualify
o Must have made 120 payments
o Payments must have been made after October 1, 2007
o Do not have to be consecutive
o Late payments and payments during deferment or grace period will not count
o Repayment must be made under one of the following plans:
o Income-Based
o Income-Contingent
o Revised Pay As You Earn
o Pay As You Earn
o Standard (when combined with IBR, ICR, PAYE or REPAYE)
Loan ForgivenessPublic Service Loan Forgiveness (PSLF)
o Only Direct loans are eligible for PSLF
o Perkins and/or FFEL program loans can be consolidated into a Direct Consolidation loan to qualify
o Payments made on Perkins and/or FFEL program loans prior to consolidation will not count
o Multiple positions that total at least 30 hours can qualify
o Must complete Employment Certification form annually/employment changes
o FedLoan (www.myfedloan.org) is the servicer for PSLF
o Completing ECF will transfer your existing loans to FedLoan
o Borrower will not be responsible for taxes on balance forgiven
Eligible public service positions
o Federal, state or local government agency or entity
o Non-profit categorized as 501(c)(3)
o Qualifying employment may include:
o The organization must not be a labor union or partisan political organization
Loan Forgiveness
o Military Serviceo Public safetyo Law enforcemento Public health serviceso Public educationo Tribal agency/organization
or tribal college/university
o Public library serviceso School library serviceso Public interest law serviceso Early childhood educationo Public services for elderly or
individuals with disabilities
Perkins Loan Discharge
o For each year of service, a percentage of your outstanding loan
o Service areas include:
o Must contact institution for discharge information
Loan Forgiveness
o Peace Corps of VISTAo Teacher (Special Education,
STEM)o U.S. Armed Forceso Nurse or medication technician
o Law enforcement or corrections officer
o Head Start workero Public interest law serviceso Professional provider of early
intervention services
Consolidation
ConsolidationDirect Consolidation Loan
o Combines multiple federal loans, pays off individual balances
o One interest rate, one lender, one payment
o Eligible loans:
o Stafford
o Graduate PLUS
o Perkins
o Interest rate is a weighted average of all loans
o Up to 30 years to repay depending on loan balance
Consolidation
Repayment Plans: Income-Driven
Consolidation
Deferment & Forbearance
Deferment & ForbearanceDeferment
o Temporary suspension of loan payments
o Interest does not accrue on Subsidized Stafford or Perkins loans
o Unsubsidized and PLUS loans will accrue interest
o Qualifying situations
o Reenrollment in school
o Military service
o Unemployment
o Economic hardship (up to three years)
Deferment & ForbearanceForbearance
o Temporary postponement or reduction of payments due to financial difficulty
o Interest accrues on all loans
o Can be granted for up to 12 months at a time for no more than three years
Planning Ahead
Planning AheadHelpful Tips
o Utilize online repayment estimator now
o Update servicer(s) on ALL changes/updates to mailing address, email, phone number, etc.
o Investigate student loan interest deduction on tax return
o Take advantage of auto-debt option to reduce interest rate
o Keep records (tax returns, W-2s, job offer letters) for PSLF, IBR, ICR or PAYE
o If applying for consolidation or alternative repayment, continue making scheduled
payments until you receive notification otherwise
o Adjust budget/spending before applying for Income-Based repayment plans
o NEVER be afraid to ask questions
Planning AheadUseful Websites
o National Student Loan Data System: www.nslds.ed.gov
o Federal Student Aid: www.studentaid.ed.gov
o Income-Based repayment plans/consolidation: www.studentloans.gov
o FinAid!: www.finaid.org
My contact information:
(314) 935-6655
Questions?
