Loan Repayment Information Session

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					   3L Loan Repayment
   Information Session
           Presented by:
Gina Soliz, Director of Financial Aid
           April 15, 2010
         What we’ll cover today
• Show you how to retrieve a summary of your
  federal student loans
• Review the loan types and the when repayment
  begins for each loan type
• Break down the repayment plans (Standard,
  Extended, Income Based Repayment)
• Examine the benefits of Federal Student Loan
  Consolidation
• Summarize Public Service Loan Forgiveness
     Syracuse University College of Law
     3L Loan Repayment Information Session
          www.nslds.ed.gov




Syracuse University College of Law
3L Loan Repayment Information Session
                    www.nslds.ed.gov
Once logged in, students will find a summary of federal student loans borrowed
from every college or university they have attended. The columns include Type
of Loan, Loan Date, Outstanding Principal, and Outstanding Interest.

Click on the box in the farthest left-hand column to click on the details of the
loan. The details will include the loan servicer’s name and contact information




         Syracuse University College of Law
         3L Loan Repayment Information Session
                       Loan Types
• Federal Subsidized Stafford Loan
  – Fixed 6.8% interest rate
  – No interest accrues during periods of deferment
• Federal Unsubsidized Stafford Loan
  – Fixed 6.8% interest rate
  – Interest accrues upon disbursement
• Federal Graduate PLUS Loan
  – Fixed 8.5% interest rate
  – Interest accrues upon disbursement

     Syracuse University College of Law
     3L Loan Repayment Information Session
                       Loan Types
• Federal Perkins Loan
  – Fixed 5% interest rate
  – No interest accrues during periods of deferment
• Private/Alternative Educational Loan
  – Variable interest rates
  – Interest accrues upon disbursement



     Syracuse University College of Law
     3L Loan Repayment Information Session
                     Loan Deferment
    Deferments are an entitlement if you meet the requirements as
        specified in the promissory note and provide the necessary
                 documentation to the loan holder/servicer.
•   At least half-time enrollment as a student in an eligible degree or
    certificate program
•   Full-time enrollment in an eligible graduate fellowship program
•   Enrollment in an approved rehabilitation training program
•   Seeking to find (and unable to find) full-time employment (up to
    three years)
•   Economic hardship as determined by federal law (up to three years)
•   Serving on active duty in the military during a war or other military
    operation or national emergency (including qualifying National
    Guard duty)

         Syracuse University College of Law
         3L Loan Repayment Information Session
                  Loan Forbearance
  Forbearance is an agreement between you and
      your loan holder/servicer that allows for:
• Temporary postponement of payments,
• Extension of time for making payments, or
• Temporary acceptance of payments that are
  smaller than required by the repayment
  schedule.
  Typically, borrowers who qualify for forbearance are willing to make
  payments, but are financially unable to do so.

       Syracuse University College of Law
       3L Loan Repayment Information Session
   When Does Repayment Begin?
• Federal Subsidized & Unsubsidized Loans
  – Law school loans have 6-month grace period following
    graduation
  – Loans borrowed prior to law school have a 6-month
    grace if they never entered into a prior repayment
    status
• Federal Graduate PLUS Loan
  – Grad PLUS Loans borrowed after 7/1/08 allow for a
    6-month Post Enrollment Deferment
  – Grad PLUS Loans borrowed prior to 7/1/08 do NOT
    have an automatic deferment

     Syracuse University College of Law
     3L Loan Repayment Information Session
         How to Postpone your
     1L Grad PLUS Loan repayment
• Some lenders have a forbearance or grace
  period which aligns the Graduate PLUS Loan
  repayment with the Stafford Loan repayment.
• Lenders may require that the borrower
  actively request this temporary postponement
  of Grad PLUS Loan repayment.
• Borrowers with lenders that do not offer
  postponement may consider applying for
  Income Based Repayment right away.
     Syracuse University College of Law
     3L Loan Repayment Information Session
                   Repayment Plans
• Standard Repayment on Federal Loans is 10 years
• Extended Repayment prolongs payments over
  25 years (must have more than $30,000 in federal student loan debt).
• Graduated Repayment – 10 years – payments
  start low and increase in one or more increments
  over time.
• Income-Based Repayment caps the monthly
  payment amount based on your income and
  family size.
        Syracuse University College of Law
        3L Loan Repayment Information Session
      Income Based Repayment
• Income Based Repayment (IBR) may offer
  borrowers the lowest monthly loan repayment
• All federal student loans are eligible for
  payments under the IBR calculation (including
  Federal Stafford and Federal Graduate PLUS
  loans)
• Borrowers in any employment type or
  situation may apply
     Syracuse University College of Law
     3L Loan Repayment Information Session
                  IBR (continued)
• Only borrowers who are experiencing "partial
  financial hardship" may enter into the IBR plan
  – A “partial financial hardship” is based on your
    household’s adjusted gross income (AGI), household
    size, the federal poverty guideline and your state of
    residence.
• As your AGI increases so will your monthly loan
  payment in IBR. As such, your monthly payment
  may be lower in certain situations using other
  repayment plans such as the Extended
  Repayment Plan.
     Syracuse University College of Law
     3L Loan Repayment Information Session
                  IBR (continued)
• Borrowers qualify if they demonstrate partial
  financial hardship
  – Defined as loan payments that exceed 15% of the AGI
    beyond 150% of the poverty rate
  – In 2009 the poverty rate is $10,830 for a household
    size of one, therefore, 150% of that poverty rate is
    $16,245
  – $16,245 is the protected amount of a borrower’s
    salary
  – 15% of a borrowers salary above that protected
    amount is the most that is required in an IBR payment

     Syracuse University College of Law
     3L Loan Repayment Information Session
                          IBR (continued)
                     Monthly Payment      Monthly Payment   Monthly Payment
AGI
                     HH Size = 1          HH Size = 2       HH Size = 3

$0                   $0                   $0                $0

$10,000              $0                   $0                $0

$20,000              $47                  $0                $0

$30,000              $172                 $102              $32

$40,000              $297                 $227              $157

$50,000              $422                 $352              $282

$60,000              $547                 $477              $407

$70,000              $672                 $602              $532

Income Based Repayment (IBR) examples (based upon 2009 poverty guidelines)
assumes borrower resides in 48 contiguous states


          Syracuse University College of Law
          3L Loan Repayment Information Session
                    IBR (continued)
• Borrower can choose to exclude spouse’s income (however,
  tax returns would be filed as ‘married filing separately’)
• Payments could change annually (annual income and family
  size verification is required)
• Payments are applied to the interest first and principal last
  (negative amortization may occur)
• Interest is capitalized when the borrower stops
  participating in IBR (this will occur if the borrower no
  longer demonstrates partial financial hardship)
• After 25 years, borrowers may receive loan forgiveness
  (under current law, the IRS views IBR loan forgiveness as a
  taxable event)

       Syracuse University College of Law
       3L Loan Repayment Information Session
     Federal Consolidation Loans
• Borrowers may elect to combine several
  existing federal student loans into one new
  loan with a fixed interest rate
• Federal Consolidation Loans are only offered
  through the William D. Ford Direct Loan
  program
• Apply online at:
  https://loanconsolidation.ed.gov

     Syracuse University College of Law
     3L Loan Repayment Information Session
Federal Consolidation Loans (cont.)
• Who should consider consolidating?
  – Borrowers with any variable interest rate Stafford
    Loan (loans borrowed prior to 7/1/06 have variable
    rates) so that they can fix the interest rate for the life
    of the loan.
  – Borrowers with more than one lender or servicer, for
    the convenience of making a single payment to a
    single servicer. Students who borrowed loans from a
    single lender may have multiple servicers!
  – Borrowers who plan to pursue Public Service Loan
    Forgiveness

     Syracuse University College of Law
     3L Loan Repayment Information Session
Federal Consolidation Loans (cont.)
• Processed consolidation loans enter into
  repayment immediately
• To avoid sacrificing any deferment
  entitlements, borrowers can request for Direct
  Loan application processing to be delayed
  until 30-60 days before the end of the grace
  period by using the “Consolidation Hold
  Option”
     Syracuse University College of Law
     3L Loan Repayment Information Session
   Public Service Loan Forgiveness
• Eligible loans may be forgiven after 10 years (120
  months) of qualifying payments and eligible
  employment.
• Please note that only Federal Direct Loans
  (including Stafford and Graduate PLUS Loans that
  have been consolidated into a Federal Direct
  Consolidation Loan) are eligible for Public Service
  Loan Forgiveness.


      Syracuse University College of Law
      3L Loan Repayment Information Session
  Public Service Loan Forgiveness
• Eligible employment includes a wide range of
  "public service" jobs, such as those employed by
  non-profit, tax exempt 501(c) (3); by the federal
  or a state, local, or tribal government (including
  military); and those employed in full-time
  Americorps positions. Public service employees
  inlcude public interest law services (including
  prosecution or public defense or legal advocacy in
  low-income communities at a non-profit
  organization).

     Syracuse University College of Law
     3L Loan Repayment Information Session
  Public Service Loan Forgiveness
• 120 qualifying payments must be made to the
  Direct Loan Program under a Standard,
  income-contingent, or IBR repayment plan
  (graduated and extended loan payments do NOT qualify).
• The payments must be made while employed
  full-time (an annual average of 30 hours/week).
• The 120 qualifying payments do not need to
  be made consecutively.
      Syracuse University College of Law
      3L Loan Repayment Information Session
                You’re Graduating!
                   What next?
• Mandatory Federal Loan Exit Counseling:
  http://financialaid.syr.edu/Loancounseling.htm
• Request postponement of 1L Grad PLUS Loan
  (any Grad PLUS borrowed prior to 7-1-08)
• Apply for Federal Direct Consolidation Loan, if
  needed (you have multiple loan servicers and/or
  you plan to pursue a career in Public Service)
• Give your loan servicer updates when your
  address and phone numbers change
     Syracuse University College of Law
     3L Loan Repayment Information Session
                       Questions?
• Log onto www.nslds.ed.gov for a detailed
  summary of your federal student loans
• Contact the College of Law Office of Financial
  Aid at financialaid@law.syr.edu or call
  315.443.1963
• Schedule an appointment with a financial aid
  counselor at SU Law if you need help!

     Syracuse University College of Law
     3L Loan Repayment Information Session

				
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