Welcome to UMF!!!Welcome to UMF!!!Fall 2007Fall 2007

Vital Information About You and Vital Information About You and Your Federal Student LoansYour Federal Student Loans

Items In Your FolderItems In Your Folder

Copy of Today’s PresentationCopy of Today’s Presentation Student Loan Entrance/Exit Interview Checklist Student Loan Entrance/Exit Interview Checklist

(check “Entrance”)(check “Entrance”) Helpful Information to Manage Your Student LoansHelpful Information to Manage Your Student Loans Repayment Estimator/Deferment ChartRepayment Estimator/Deferment Chart Credit Cards: Use Wisely!Credit Cards: Use Wisely! Understanding Your Credit ScoreUnderstanding Your Credit Score Funding Education Beyond High SchoolFunding Education Beyond High School

Our Staff isOur Staff isReady To Assist YouReady To Assist You

Barbi CastonguayBarbi Castonguay Chris DeonChris Deon Ernestine HutchinsonErnestine Hutchinson Jennifer HutchinsonJennifer Hutchinson Judy JewellJudy Jewell Ron MillikenRon Milliken Debbie MoodyDebbie Moody Kimberly Trider-GrantKimberly Trider-Grant Shirley YankuraShirley Yankura

Merrill Center, 224 Main StreetMonday - Friday 9:00AM - 4:30 PM(207) 778-7100 umfaid@maine.edu

http://financialaid.umf.maine.edu

How You Got To This PointHow You Got To This Point

Filed a Free Application for Federal Student Aid Filed a Free Application for Federal Student Aid (FAFSA) for 2007-2008(FAFSA) for 2007-2008

Received UMF Financial Aid Award LetterReceived UMF Financial Aid Award Letter Requested a Federal Stafford Loan or a Federal Requested a Federal Stafford Loan or a Federal

Perkins LoanPerkins Loan Completed a Master Promissory Note for a Completed a Master Promissory Note for a

Federal Stafford Loan or a Perkins Master Federal Stafford Loan or a Perkins Master Promissory NotePromissory Note

Purpose Of Loan Entrance Purpose Of Loan Entrance CounselingCounseling

Federal regulatory requirement for Stafford Federal regulatory requirement for Stafford borrowers who have not previously borrowers who have not previously received a Stafford Loan at UMFreceived a Stafford Loan at UMF

Learn and/or review vital loan informationLearn and/or review vital loan information Prerequisite to receiving Stafford Loan Prerequisite to receiving Stafford Loan

funds on your student accountfunds on your student account

Methods To Complete The Stafford Methods To Complete The Stafford Entrance Loan Counseling Entrance Loan Counseling

RequirementRequirement

Participate in this session and submit the Participate in this session and submit the white copy of the Stafford Loan white copy of the Stafford Loan Entrance/Exit Interview Checklist before Entrance/Exit Interview Checklist before leaving the meetingleaving the meeting

Go on-line to: Go on-line to: http://http://financialaid.umf.maine.edu/loancounsel.pfinancialaid.umf.maine.edu/loancounsel.phphp

Basics For New BorrowersBasics For New Borrowers

Federal Perkins LoanFederal Perkins Loan Federal Subsidized Stafford LoanFederal Subsidized Stafford Loan Federal Unsubsidized Stafford LoanFederal Unsubsidized Stafford Loan Federal PLUS LoanFederal PLUS Loan Alternative Loan (The Maine Loan, Signature Alternative Loan (The Maine Loan, Signature

Loan, etc.)Loan, etc.) Educators For Maine LoanEducators For Maine Loan Federal Direct Loans Federal Direct Loans

What are some examples of educational loans?

Basics For New BorrowersBasics For New Borrowers

Fixed Federal Interest Rate: 6.8% for loans Fixed Federal Interest Rate: 6.8% for loans disbursed on or after July 1, 2007 disbursed on or after July 1, 2007

Made by banks, credit unions, savings and Made by banks, credit unions, savings and loan associations, etc.loan associations, etc.

Insured by government agencies (FAME) and Insured by government agencies (FAME) and reinsured by the Federal Governmentreinsured by the Federal Government

There is no credit check required for a There is no credit check required for a Stafford Loan, nor any credit scoring, for Stafford Loan, nor any credit scoring, for eligibility for this type of loan eligibility for this type of loan

What Is A Stafford Loan?

Basics For BorrowersBasics For Borrowers

Subsidized (based on need; some interest Subsidized (based on need; some interest is subsidized by the Government)is subsidized by the Government)

Unsubsidized (you are responsible for the Unsubsidized (you are responsible for the interest that accrues) interest that accrues)

What Types Of Federal StaffordLoans Are There?

Basics For BorrowersBasics For Borrowers

Example Of How Stafford Loan Eligibility Is Calculated

Cost $ 15,000

- Family Contribution $ 8,000

- Other Aid $ 3,000

= Eligibility for subsidized $ 4,000

Note: Loan cannot exceed grade level amount. e.g., $ 3,500 for first year students.

Basics For BorrowersBasics For BorrowersConstraints to understand - Federal

Stafford (or Federal Direct) Loan Limits (for subsidized and unsubsidized)

Annual loan limits until July 1, 2008

First year: $ 3,500

Second year: $ 4,500

Third year: $ 5,500

Fourth year: $ 5,500

Basics For BorrowersBasics For BorrowersConstraints To Understand

Loan Fees (up to 3%) $3,500.00 x 3% = $105.00

Net loan amt = $ 3,395.00

Some lenders deduct no loan fees.

If lenders deduct fees from the gross loan amount allotted to each semester before the net loan funds are sent to UMF, then:

Fall net loan:

$1750 (gross) - 52.50 (fees) = $1697.50

Spring net loan: $1750 – 52.50 = $1697.50

Annual net loan: $3500 – 105.00 = $3395.00

Basics For BorrowersBasics For Borrowers

DefermentDeferment

ForbearanceForbearance

CancellationCancellation

Terms And Conditions

Basics For BorrowersBasics For BorrowersRightsRights

Copy of Promissory Note, repayment Copy of Promissory Note, repayment schedule, and disclosure formschedule, and disclosure form

Grace periodGrace period Deferment and cancellation provisionsDeferment and cancellation provisions A repayment period of up to ten yearsA repayment period of up to ten years Prepayment without penaltyPrepayment without penalty Be informed if your loans are sold or Be informed if your loans are sold or

managed by a servicing organizationmanaged by a servicing organization

Basics For BorrowersBasics For Borrowers ResponsibilitiesResponsibilities

Keep your lender informedKeep your lender informed Use your funds for educational Use your funds for educational

expenses for your loan periodexpenses for your loan period Meet satisfactory progress standardsMeet satisfactory progress standards Know UMF’s refund policyKnow UMF’s refund policy Pay your loan on time including any Pay your loan on time including any

accrued interestaccrued interest

Stafford Loan Cancellation Stafford Loan Cancellation ProvisionsProvisions

•Borrowers total and permanent disability or death – 100% Forgiveness

•Full-time teacher for five consecutive years in a designated elementary or secondary school serving students from low-income families – Up to $5000

•Bankruptcy (in rare cases) – 100% if a court rules that repayment would cause undue hardship

•Highly Qualified Teachers – math or science in secondary schools and special education in elementary schools – Up to $17,500

Stafford Loan Cancellation Stafford Loan Cancellation ProvisionsProvisions

•Closed School – 100% if the school closed before the student could complete their program of study or if the school issued a false loan certification

•School does not make the required return of loan funds to the lender – Up to the amount that the school was required to return

Perkins Loan BasicsPerkins Loan Basics

The Perkins Loan program is need-basedThe Perkins Loan program is need-based

Has a fixed 5% interest rateHas a fixed 5% interest rate

UMF is your lenderUMF is your lender

Maximum Perkins Loan Amounts Maximum Perkins Loan Amounts At UMFAt UMF

(Federal limits are higher)(Federal limits are higher)

ResidencyResidency 11stst Year Year StudentsStudents

Returning Returning StudentsStudents

In-StateIn-State $2,000$2,000 $1,500$1,500

Out-of-StateOut-of-State $2,500$2,500 $2,000$2,000

New England New England RegionalRegional

$2,500$2,500 $1,750$1,750

Perkins ProcessPerkins Process

To accept a Perkins Loan offer, indicate your To accept a Perkins Loan offer, indicate your acceptance of the loan on your award letter.acceptance of the loan on your award letter.

A Perkins Master Promissory Note will be A Perkins Master Promissory Note will be mailed to you for you to sign and return.mailed to you for you to sign and return.

You must complete your Perkins Disclosure You must complete your Perkins Disclosure and Loan Information Sheet on WebDSIS.and Loan Information Sheet on WebDSIS.

www.maine.edu/dwww.maine.edu/dsissis

Perkins Disclosure and Loan Perkins Disclosure and Loan Information Sheet CompletionInformation Sheet Completion

Sign on to WebDSIS Sign on to WebDSIS www.maine.edu/dwww.maine.edu/dsissis Choose term: e.g. Fall 2007Choose term: e.g. Fall 2007 Select Financial Aid from the linksSelect Financial Aid from the links Once in the Financial Aid section, select Perkins Loan Once in the Financial Aid section, select Perkins Loan

from the bar of linksfrom the bar of links You will be directed to complete the online form which will You will be directed to complete the online form which will

require the home and work addresses and phone require the home and work addresses and phone numbers for your parents numbers for your parents

You will also enter the addresses and phone numbers for You will also enter the addresses and phone numbers for four references (not parents) who must all have different four references (not parents) who must all have different addressesaddresses

Perkins RepaymentPerkins Repayment

You have a nine (9) month grace period after You have a nine (9) month grace period after either graduating, dropping below half-time either graduating, dropping below half-time (six credits), or leaving school(six credits), or leaving school

You may be eligible for a deferment or You may be eligible for a deferment or forbearanceforbearance

Cancellation options are availableCancellation options are available

Some Examples Of Perkins Loan Some Examples Of Perkins Loan Cancellation OptionsCancellation Options

Borrower’s death or permanentBorrower’s death or permanent disability disability

Teaching in designated school systems or in Teaching in designated school systems or in certain fields in areas with a teacher shortagecertain fields in areas with a teacher shortage

Working as a law enforcement officerWorking as a law enforcement officer

Who To Talk To About Your Who To Talk To About Your Perkins LoanPerkins Loan

While you are enrolled at UMF, While you are enrolled at UMF, direct your questions to the direct your questions to the Financial Aid Office (207)778-7100.Financial Aid Office (207)778-7100.

When you are in repayment, direct all Perkins When you are in repayment, direct all Perkins Loan questions to the Loan Processing and Loan questions to the Loan Processing and Receivables Management Office at Orono. Receivables Management Office at Orono. You may call (207) 561-3444 or 1-800-308-You may call (207) 561-3444 or 1-800-308-6148.6148.

Receiving Your Stafford or Perkins Receiving Your Stafford or Perkins Loan FundsLoan Funds

Loans are generally Loans are generally divided in half and divided in half and issued once per issued once per semestersemester

Net amount after Net amount after origination feesorigination fees

Electronic Funds Electronic Funds Transfer (EFT) to your Transfer (EFT) to your UMF account or you UMF account or you sign your check that is sign your check that is co-payable to you co-payable to you and and UMF - you will be UMF - you will be contacted by our contacted by our Student Accounts staff.Student Accounts staff.

•Credits in excess of charges are refunded by check – usually on Mondays and Wednesdays on the week following the credit balance by Student Accounts staff in the Merrill Center

UMF’s Refund Policy On TuitionUMF’s Refund Policy On TuitionWithdrawn From All ClassesWithdrawn From All Classes

Prior to End of Second Week 100% Tuition and Fees

From Above to End of 5th Week 50% Tuition and Fees

From Above to End of 8th Week 25% Tuition and Fees

After the 8th Week 0%

Avoid Delinquency And DefaultAvoid Delinquency And Default

Delinquency means non-payment of your Delinquency means non-payment of your loan when dueloan when due

Default means non-payment for 270 daysDefault means non-payment for 270 days 97% of Maine students have repaid their 97% of Maine students have repaid their

loansloans

Consequences Of DefaultConsequences Of Default

FFEL loans cannot be eliminated FFEL loans cannot be eliminated through bankruptcythrough bankruptcy

Results in poor credit rating that may Results in poor credit rating that may impact ability to get other credit for impact ability to get other credit for cars, homes, etc.cars, homes, etc.

Ineligible for future student aidIneligible for future student aid Federal and state taxes withheldFederal and state taxes withheld Enormous hassleEnormous hassle

Personal Financial PlanPersonal Financial PlanSet Up A Personal BudgetSet Up A Personal Budget

Know your weekly, monthly, semester, Know your weekly, monthly, semester, and annual expensesand annual expenses

Establish a personal budgetEstablish a personal budget Stick to your budget!Stick to your budget!

Personal Financial PlanningPersonal Financial Planning Be wary of credit card debtBe wary of credit card debt Pay off credit card balancePay off credit card balance

everyevery month month ““Freshmen who rack up a $1000 credit card bill and pay Freshmen who rack up a $1000 credit card bill and pay

only the minimum amount each month will finish their only the minimum amount each month will finish their bachelor’s degree, complete a masters program, begin bachelor’s degree, complete a masters program, begin earning a living, and still have 3 1/2 years to go to finish earning a living, and still have 3 1/2 years to go to finish paying off that freshman year spending spree. And that paying off that freshman year spending spree. And that assumes no purchases beyond the initial $1,000.”assumes no purchases beyond the initial $1,000.”

Source: William StaffordSource: William Stafford

Know Your LoanKnow Your Loan

Who Is Your Lender?NameAddressHow To Contact

How Much Do You Currently Owe?

How Much Do You Plan To BorrowIn The Future For Education?

Borrowing Can Be Good!Borrowing Can Be Good!

Helps pay immediate bills and expensesHelps pay immediate bills and expenses Enables focus on academics and Enables focus on academics and

graduationgraduation Increases earnings potential by facilitating Increases earnings potential by facilitating

more educationmore education Reduces financial worriesReduces financial worries Good repayment = goodGood repayment = good

credit ratingcredit rating

Too Much Debt Can Be BadToo Much Debt Can Be Bad

Reduces your spending possibilitiesReduces your spending possibilities Limits ability to save for the futureLimits ability to save for the future Additional stressAdditional stress

Four Years Of Pizza On A Four Years Of Pizza On A Stafford Loan = Financial Stafford Loan = Financial

IndigestionIndigestion Initial Cost Per Pizza: $15Initial Cost Per Pizza: $15

Total Pizzas: 208Total Pizzas: 208

Total Cost: $3,120Total Cost: $3,120 Interest Rate: 8.25%Interest Rate: 8.25%

(maximum rate)(maximum rate) Number of Payments: 120Number of Payments: 120

Total Cost: $5,729Total Cost: $5,729 Total Interest Paid: Total Interest Paid:

$2,609$2,609 Final Cost Per Pizza: $28Final Cost Per Pizza: $28

Maintain Your Loan FolderMaintain Your Loan Folder

Keep borrower copy of Promissory NoteKeep borrower copy of Promissory Note Keep loan disclosures from your lenderKeep loan disclosures from your lender Keep directionsKeep directions Keep all correspondence Keep all correspondence

from your lenderfrom your lender Keep a log with good notesKeep a log with good notes

of all phone calls and relevantof all phone calls and relevanteventsevents

Check It Out…Now And Check It Out…Now And AnnuallyAnnually

With NSLDS (National Student Loan Data With NSLDS (National Student Loan Data System), federal student loans can be checked System), federal student loans can be checked onlineonline

http://www.nslds.ed.govhttp://www.nslds.ed.gov Contact NSLDS for your PIN at Contact NSLDS for your PIN at

http://www.pin.ed.govhttp://www.pin.ed.gov Check out the Student Guide at Check out the Student Guide at http://studentaid.ed.gov/guide/ http://studentaid.ed.gov/guide/

Basics For BorrowersBasics For BorrowersLoan Application Process In ReviewLoan Application Process In Review

Submit a FAFSASubmit a FAFSA Financial Aid Award LetterFinancial Aid Award Letter Select a Lender and LoanSelect a Lender and Loan

Amount (if Stafford)Amount (if Stafford) Read and Sign Promissory Read and Sign Promissory

Note with rights and Note with rights and responsibilitiesresponsibilities

Loan ConsolidationLoan Consolidation

Allows you to combine several types of Allows you to combine several types of federal student loans with various federal student loans with various repayment schedules into one loan with repayment schedules into one loan with one monthly paymentone monthly payment

Currently has a fixed interest rateCurrently has a fixed interest rate Payments may be lower if you opt for an Payments may be lower if you opt for an

extended payment period (though this extended payment period (though this will increase your overall interest paid)will increase your overall interest paid)

Loan ConsolidationLoan Consolidation

Contact your lender for information Contact your lender for information regarding consolidationregarding consolidation

If you receive unsolicited consolidation If you receive unsolicited consolidation information, we suggest contacting your information, we suggest contacting your Stafford lender if you’re considering Stafford lender if you’re considering consolidating your loans consolidating your loans

All students can consolidate their loans All students can consolidate their loans during the grace and repayment periods.during the grace and repayment periods.

Drawbacks to ConsolidationDrawbacks to Consolidation

Significantly increases the total cost of Significantly increases the total cost of repaying the loanrepaying the loan

Loss of borrower benefits or cancellation Loss of borrower benefits or cancellation privileges of the individual loans involvedprivileges of the individual loans involved

You cannot undo consolidationYou cannot undo consolidation

Use E-mail and Web DSISUse E-mail and Web DSIS

Activate your maine.edu email address Activate your maine.edu email address and, if necessary, use the forwarding and, if necessary, use the forwarding featurefeature

Check WebDSIS regularly for information Check WebDSIS regularly for information about financial aid, registration, and billingabout financial aid, registration, and billing

http://www.maine.edu/dsis/http://www.maine.edu/dsis/ Get help from the Help Desk at the UMF Get help from the Help Desk at the UMF

Computing Center at extension 7300Computing Center at extension 7300