STUDENT LOAN REPAYMENT MANUAL TABLE OF CONTENTS

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					                                                                               2009
                                              STUDENT LOAN REPAYMENT MANUAL

                                                               TABLE OF CONTENTS


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 3

STUDENT LOAN EXIT COUNSELING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Page 4
   • DMD/DIS Students
   • HPSL, LDS, Perkins and Tufts Loan Borrowers
   • Post-Graduate Students
   • Withdrawn/LOA Students
   • Credit History and Student Loans

DEFINITIONS AND TERMINOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 10
   • Grace Period
   • Deferment
   • Forbearance
   • Clarification of Deferment Provision for GPR Programs
   • FFELP Repayment Schedules
   • Loan Forgiveness Program
   • Graduated Repayment Schedules for HPSL, LDS, Perkins Loan and Tufts Loans
   • Borrower Benefits Programs
   • Consolidation Programs
   • Sale of Student Loans
   • Tufts University Student Loan Office

FEDERAL FAMILY EDUCATION LOAN PROGRAM (FFELP)……………………………… Page 21
   • Federal Stafford Loan
   • Grad PLUS Loan

FEDERAL PERKINS LOAN……………………………………………………………………. . Page 27

UNIVERSITY (TUFTS) LOANS …………………………………………………………………Page 29

FEDEAL HEALTH PROFESSIONS LOAN PROGRAMS……………………………………….Page 31
   • Health Professions Student Loan (HPSL)
   • Loans for Disadvantaged Students (LDS)

PRIVATE EDUCATION LOANS…………………………………………………………………Page 32

LOAN CONSOLIDATION PROGRAMS…………………………………………………………Page 34

PLANNING A STUDENT LOAN REPAYMENT STRATEGY………………………………… Page 37

HELPFUL HINTS FOR LOAN DEFERMENT PROCESS……………………………………….Page 39

TUFTS UNIVERSITY LOAN REPAYMENT ASSISTANCE PROGRAM (LRAP)…………….Page 41

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 43
   • IN-SCHOOL DEFERMENT FORM
   • MILITARY DEFERMENT FORM
   • ECONOMIC HARDSHIP DEFERMENT FORM/WORKSHEETS
   • INCOME-BASED REPAYMENT/PUBLIC SERVICE LOAN FORGIVENESS BROCHURE
   • INCOME-BASED REPAYMENT WORKSHEET - 2008
   • LOAN FACTOR TABLE
   • ACCRUED INTEREST TABLE
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                                STUDENT LOAN REPAYMENT BOOK
                                            2009

                                                                                          Sandra M. Pearson
                                                                                    Director of Financial Aid

                                                                                Shannon Barry Vasconcelos
                                                                              Asst. Director of Financial Aid

                                                                                            Nikki Lowe Lane
                                                                              Asst. Director of Financial Aid

                                                Introduction

The purpose of this manual is to assist you in understanding your student loan repayment obligations and
provide guidance as you transition into your career and enter student loan repayment. This information
details your rights and responsibilities towards your loans and is used in conjunction with the student loan
exit counseling that all federal student loan borrowers are required to complete to obtain administrative
clearance for graduation. The manual is an excellent resource for you to use to help you understand your
options for repayment of your student loans, but realize that your options could change at some future point
because of legislative initiatives that affect student loans. Your lenders and loan servicers, as well as the
Financial Aid Office, remain good sources of information to provide updates on regulations that might
affect your repayment options.

Students who have only borrowed private education loans (with the exception of the Tufts Loans) are not
required to complete the student loan exit counseling requirement. However, they are advised to review
the pertinent areas of this manual and contact their private education loan lenders/loan servicers to update
their contact information and for further information pertaining to repayment of their loan(s).

The manual reviews the following loan programs:

Federal Family Education Loan Programs (FFELP)
Federal Stafford Loan
• Subsidized
• Unsubsidized
Grad PLUS Loan
Federal Perkins Loan
Federal Consolidation Loan (including Early Repayment Consolidation Loans)

University Loans
Tufts Loan

Health Professions Loan Programs
Health Professions Student Loan (HPSL)
Loans for Disadvantaged Students (LDS)

Private Educational Loans
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STUDENT LOAN EXIT COUNSELING SESSION

Completion of the student loan exit counseling session is required of all students who have received federal
or university (Tufts) student loans while enrolled at TUSDM as mandated by federal regulations. Exit
counseling is accomplished during the student’s final semester prior to graduation or at the time the student
withdraws from school or drops below half-time status. Students who plan a leave of absence from their
academic program are also required to receive student loan exit counseling should their leave be treated
(for financial aid-related purposes) as though they’ve withdrawn from the school. It is important to note
that exit counseling takes place at the end of the academic program for which the student received federal
or university student loans. Although a DMD candidate may intend to continue his or her education as a
Tufts post-graduate student, he or she is still required to complete exit counseling for aid received during
their DMD program. The student will be required to complete additional student loan exit counseling at
the conclusion of their certificate program for student loans obtained for that academic program. Student
loan exit counseling is a required component of senior and non-senior administrative clearance conducted
by the Office of Student Affairs – Registration Office. Students who fail to complete exit counseling
procedures will have an administrative hold placed on all of their academic and financial aid records. This
includes withholding academic services, certifying letters and/or recommendations.

Student loan exit counseling is intended to be a helpful tool for borrowers as it provides an opportunity for
them to review the terms of their student loans received while enrolled at TUSDM. It is also meant to
provide useful information on repayment options so borrowers can develop an effective repayment
strategy. Conditions for deferment will also be discussed for those students who plan to continue their
education with post-graduate work. Although students might not necessarily enjoy looking at the “bottom
line” as to how much they owe, the vast majority feel better after they receive exit counseling having
gained a better understanding of the terms of their loans, their options for repayment and their rights for
postponement of payment if they plan to continue their education or encounter financial hardship. During
the financial aid exit counseling session, the Financial Aid Office will review your rights and
responsibilities towards each federal and institutional loan programs available to TUSDM students. Each
borrower will receive a personalized packet of information which includes an itemization of loan programs
borrowed, principal amounts of loans outstanding, a review of interest rates, grace periods, deferment
options, forbearance, estimated monthly payments and various repayment plan options including
information on loan consolidation.

It is highly recommended (but not required) that you read this manual thoroughly before your exit
counseling session. Borrowers should certainly read this information prior to the beginning of repayment,
as it will assist in planning their financial futures. Please take note, however, that the information in the
manual is not the ONLY source of information that will help in navigating your way through student loan
repayment. As student loan borrowers, your lenders and loan servicers will prove to be valuable sources of
information pertaining to policy, regulations and repayment options available to you. In addition, their
websites are very comprehensive and often include the ability to download important forms, include loan
repayment calculators to determine estimated monthly loan payments as well as very comprehensive
information on loan consolidation programs and policies surrounding those programs.

Many students have borrowed private education loans in conjunction with federal and institutional loans.
With the exception of Tufts Loans, the Financial Aid Office is not required to conduct exit counseling for
private education loans borrowed while the student was enrolled. Private education loans will be discussed
during the exit counseling session in general terms and the principal amount borrowed will be included on
debt summary reports provided to borrowers. Borrowers, however, are referred to their lenders for specific
terms of their private education loans. Keep in mind that a number of students borrow non-school certified
private education loans such as residency, board exam and relocation loans or direct-to-consumer loans.
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The Financial Aid Office does not have record of these loans thus they are not addressed in student loan
exit counseling sessions, nor are they listed as part of the student’s loan indebtedness.

Student Loan Exit Counseling Format for Graduating Students – DMD/DIS Students

The Financial Aid Office conducts student loan exit counseling sessions for graduating students by holding
a total of three (3) group sessions scheduled during the months of February and March. Students will be
required to pre-register for ONE of the sessions so that we can ensure a personalized exit packet is
available for you during your session. Students can register for a session by using sign-up sheets located at
the Financial Aid Office, by calling the Financial Aid Office, noting the session they wish to attend, or by
emailing us. Although we’d prefer to keep group sessions small, we reserve the right to cancel a session
when limited attendance is expected.

In addition to attending the group exit counseling session, students who have borrowed a Federal Stafford
Loan (Subsidized or Unsubsidized) and/or Grad PLUS loans are required to complete an online exit
counseling session. This can be accomplished by going to the Financial Aid Office’s website
(http://dental.tufts.edu/financial_aid) then clicking on “Student Loan Exit Counseling” under the “Quick
Links” in the lower right hand corner. Note that the information contained with this manual will indicate
which online exit counseling session you must complete (Stafford, Grad PLUS or Stafford AND Grad
PLUS combined). Once the student completes their appropriate Stafford/Grad PLUS online exit session,
the Financial Aid Office is notified automatically.

Note the dates selected for the group sessions are coordinated around externship groups and when the clinic
is closed when at all possible. Sessions are held AFTER normal business hours so as not to interfere with a
student’s academic and/or clinical work to the extent possible. Depending on room availability the
sessions are held on varying days of the week to allow as much flexibility for students with other
obligations such as work, home and family. Nonetheless, the student must realize that completion of the
financial aid exit interview process is considered “school business” and takes precedence over other
matters. Students who are scheduled to be out on externship during the spring semester must plan their
attendance around their externship schedule.

HPSL, LDS, Perkins Loan and Tufts Loan Borrowers

Borrowers who have received Health Professions Student Loans (HPSL), Loans for Disadvantaged
Students (LDS), Perkins Loan and/or Tufts Loan will need to complete additional exit counseling online in
addition to attending one of the three group sessions available AND completing the online Stafford/Grad
PLUS exit counseling. Additional information and instructions have been provided to these students in the
cover letter accompanying this manual. The Financial Aid Office will be automatically notified when the
student has completed the online exit counseling requirement. Instructions on how to access the online
counseling session for these loans are released via email (to your Tufts University email account) after the
initial group counseling session is held. The instructions will direct you to www.UASExit.com to complete
the appropriate documentation for each type of loan you have received. The online exit sessions for HPSL,
LDS, Perkins and Tufts Loans are coordinated by the Tufts University Student Loan Office and the
university’s loan servicer, University Accounting Services (UAS).
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Individual Counseling Sessions

The Financial Aid Office staff will be happy to meet with students on an individual basis to address
specific questions they may have once the student attends a group session and completes the required
online exit counseling session(s). Appointments can be scheduled with the Financial Aid Office.

Financial Aid Exit Counseling Format for Graduating Students – Post-Graduate Students

Post-graduate students who have received Federal Stafford Loans or Grad PLUS loans while in attendance
at TUSDM will be required to complete the appropriate online Stafford/Grad PLUS exit counseling
following the specific instructions contained in the cover letter that accompanied this manual. Post-
graduate students are welcome to attend one of the group sessions provided to DMD candidates if they feel
they need a more extensive review of their student loans. However, they must have first completed their
online exit counseling session. Financial Aid Office staff will be happy to meet with post-graduate
students on an individual basis or via phone or email communication to answer specific questions or
concerns after he or she has completed the online counseling session and if the student is unable to attend a
group session.

Retention of Exit Counseling Documentation

Federal regulations require the Financial Aid Office collect and retain certain documentation from the
borrower as proof they’ve completed exit counseling for all federal student loans that the borrower received
while in attendance. Included in this documentation is the collection of personal data and reference
information provided by the borrower as they complete their online student loan exit counseling session.
It is essential that the student provide all the necessary information they are asked to provide during their
online exit sessions, including complete address and phone number information. Once the student
completes the online session, the Financial Aid Office will download a confirmation, review it for accuracy
and completeness, and retain it in the student’s financial aid record.

Borrower’s Responsibilities for Changes of Contact Information and Enrollment/Student Status

It is absolutely critical that students/borrowers notify ALL of their loan servicers immediately of any
changes in their contact information (i.e., mailing address, phone number, email address and/or name).
During the exit counseling session, the Financial Aid Office will provide a complete list of the student’s
loan servicers and their contact information so that students are informed as to who they must contact in the
event of a change. Loan servicers need to have a valid mailing address so that they may send you timely
billing notices and other essential correspondence regarding the status of your student loan accounts. Tufts
University does not update lenders/loan servicers with graduates’ address information that might be
provided by graduates to Alumni Affairs or any other office within the dental school.

Borrowers also bear the responsibility of notifying his or her lenders/loan servicers immediately of any
change in expected graduation date or if there is a change in his or her enrollment status (with the borrower
dropping below half time status, withdrawing from the school, or remaining enrolled beyond an expected
graduation date). Although Tufts University reports the student’s enrollment status and expected
graduation date (or withdrawal date) to the National Student Loan Clearinghouse on a monthly basis, the
availability of this electronic information doesn’t always coincide with the date a loan(s) enter repayment.
To avoid any payments coming due on student loans earlier than expected, the borrower should be
proactive in reporting any change in enrollment status and/or graduation date directly to the loan servicer,
providing any paper documentation that might be required in the interim before the electronic data can be
received.
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Exit Interview Counseling for Withdrawn Students

The Financial Aid Office is notified through the Office of Student Affairs when a student has withdrawn or
is expected to take a leave of absence from their academic program. [Note that, although a student may
intend to return after a leave of absence, the Financial Aid Office may be required to consider that student
to have withdrawn and notify the student’s lenders/loan servicers accordingly.] Upon receipt of
notification of withdrawal or leave of absence, the Financial Aid Office will determine if it is necessary for
the student to complete exit counseling and notify the student accordingly with specific instructions to
complete the appropriate online format depending on the type of student loans received. The Financial Aid
Office highly recommends withdrawn students or those taking a leave of absence to meet with a member of
the Financial Aid Office staff to complete necessary exit counseling in person. No student will receive
administrative clearance until they complete all elements of their required student loan exit counseling.

Exit Counseling Guidelines

During Spring 2009, the Financial Aid Office will have over 160 students needing to complete the financial
aid exit interview process within a short time frame. We take exit counseling very seriously as we feel it’s
a very important and necessary step in providing our graduates with a solid foundation for financial health
as they begin their career in dentistry. The information we provide in the exit packet has taken extensive
time on our part to prepare and can’t be duplicated. Please be sure to safeguard the information in the
packet we provide so as not to misplace it. We also expect your full cooperation during exit interview
“season” and have outlined a few common courtesies below:

   1) When asked to sign up for a group session and/or complete online counseling please respond to the
      request quickly. A tremendous amount of our time is needlessly spent on repeatedly sending
      reminders to students.

   2) Be sure to write down the date you’re scheduled to attend your group exit session. Your (DMD
      candidates) attendance at one of the sessions is mandatory and supersedes all other school business.
      If you must reschedule, 24-hour advance notice is requested out of courtesy, but be aware that we
      provide only 3 group sessions. Please don’t needlessly delay your attendance until the final session.
      Our intent is to have 3 sessions with the number of students attending each session a manageable
      size maintaining a small group atmosphere.

   3) Realize that DMD candidates MUST attend the group exit counseling session AND complete the
      Stafford and/or Grad PLUS online exit counseling session. Those students who received HPSL,
      Tufts Loan, Perkins Loan and/or LDS will ALSO have to complete a separate online session for
      their particular loans.

   4) We realize that parts of the presentation may not apply to every student but privacy laws prohibit us
      from “ear-marking” a session for only those students who have borrowed particular loans. Please
      have some patience and courtesy for those that do need to listen!

   5) The session dates are carefully selected to accommodate students’ needs to the extent possible.
      Please realize your responsibility in attending one of the sessions and completing this administrative
      clearance task.
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Your Credit History and Student Loans

All student loans are reported to national credit bureaus and become part of your credit history. By
examining your payment history on all of your consumer credit including student loans, your potential
creditors will be able to determine whether or not you are a good credit risk which is usually summarized
using your credit score. Your credit score (referred to as your FICO score) and overall credit history will
impact your ability to obtain additional credit and the interest rate the lenders offer you. The higher your
FICO score, the better risk you are and, as a result, you’re apt to receive more favorable credit terms than
someone with a lower credit score. You are entitled to a free copy of your credit report annually. You can
obtain this by going to www.annualcreditreport.com. In addition, you can obtain information about your
FICO score by going to www.myfico.com. For a nominal fee, you can receive your FICO score. You
should pull a copy of your credit report at this stage to see how your current borrowing history has
impacted your credit report and FICO score. It’s sometimes helpful to know your FICO score so that you
understand your financing options (or limitations). Most importantly, once you receive your credit report,
you should make note of your student loans, become familiar with how to read your credit report and
review it for any errors.

You should become skilled in knowing how your credit decisions and payment history affect your FICO
score and your ability to obtain financing. Certainly, falling behind in your student loan payments,
becoming delinquent or defaulting on any credit obligation, including a student loan, will have negative
consequences. You should periodically check your credit reports for errors and, if any are found, report it
immediately to the credit bureau reporting the error by filing a dispute. In addition, having high credit
limits (regardless of how much you actually owe) or having too little available credit can negatively impact
your FICO score. You may be able to work with your creditors to positively affect your FICO score.

The three national credit bureaus are listed below should you need to contact them directly for any reason.
Most will charge a small fee in exchange for mailing a copy of your credit report to you so be sure to
obtain your annual free copy from www.annualcreditreport.com first.

Trans Union Credit Info         Experian Credit Bureau                 Equifax
Consumer Disclosure Ctr         National Consumer Assistance Ctr       Information Service Ctr
P.O. Box 390                    P.O. Box 2104                           P.O. Box 740241
Springfield, PA 19064-0390      Allen, TX 75013-0949                   Atlanta, GA 30374-0241
(800) 888-4213                  (888) 397-3742                         (800) 997-2493
www.transunion.com              www.experian.com                        www.equifax.com

Student Loan Default

Defaulting on your student loans has serious consequences for you. There are a number of reasons why
borrowers have difficulties in repaying student loans. Many defaulters did not comprehend the size of their
debt and how that translated into expected monthly payments once they were out of school. Although
starting salaries are very “healthy” for dentists, monthly student loan payments can deplete monthly income
quite quickly. With average student loan indebtedness being as high as it is for TUSDM graduates,
borrowers need to use caution to not live beyond their means in light of expected student loan payments.

Some borrowers who default may not have known to taken advantage of all of their repayment options
available that help to lower expected monthly payments. Information on different repayment options
available to you are contained on your loan servicer websites or by contacting one of their representatives
directly. Although you may be hesitant to contact your servicer telling them you’re experiencing financial
difficulties, they are most able to help you BEFORE your loan goes into delinquency or default status.
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Some student loan borrowers may not have updated their contact information with all their loan servicers
and, before too long, they find themselves being denied consumer credit because they are delinquent or are
in default of a student loan. Regardless of the reason as to why student loan default occurs, the Federal
Government will take the following action against student loan defaulters:

   a) Referral to a collection agency the cost of which is absorbed by the borrower
   b) Reporting negative credit rating to a credit bureau
   c) Referral to the Department of Justice for litigation and enforcement of judgment which may include
      seizure of property, garnishments of wages and attachment of liquid assets such as bank accounts
   d) Offset of IRS refunds and salary
   e) Medicare/Medicaid offset and exclusion
   f) Preclude borrower from receiving federal student aid

Tufts Dental School graduates seldom default on their student loans considering our default rates for
Federal Stafford Loan, Federal Perkins Loan, Health Professions Student Loan and Loans for
Disadvantaged Students are all under 5%. However, borrowers still face enormous debt burden upon
graduation. The estimated average debt for the Class of D2009 is approximately $194,500. The Class of
DIS09 has average debt of approximately $84,300. Although post-graduate students tend to borrow much
less on average for their post-graduate program, they still face substantial loan debt if they borrowed loans
while attending prior educational programs. Realize that 44% of our student population graduate from
their DMD program with education loan debt in excess of $250,000, excluding any student loans borrowed
in college or other degree programs.

Cure Programs

The Federal government has instituted cure procedures to “rehabilitate” student loan defaulters’ credit
histories and restore their ability to apply for federal student aid and perhaps other types of consumer credit
in the future. If you do find yourself as having defaulted on a student loan, you should contact the loan
guarantee agency for further information regarding the requirements for loan rehabilitation.

Again, the idea is to not let your financial situation get to the point where you’re ignoring repayment of
your student loans. A simple phone call to your loan servicers will allow you to explore your repayment
options to ether lessen the monthly debt burden or even postpone repayment.
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DEFINITIONS AND TERMINOLOGY

Oftentimes borrowers get confused because they lack the basic understanding of certain terminology that’s
often associated with their student loans. This section will help the borrower understand common
terminology as it relates to repayment of their student loans.

Grace Period

A grace period is granted on certain loans and is a period of time (usually 6-12 months depending on the
type of loan) granted after you cease either half-time or, in some cases, full-time enrollment status.
Depending on the type of loan, interest may or may not accrue during a grace period. If interest does
accrue, you usually have the opportunity to pay interest to avoid it being added to the principal loan amount
(capitalization) before repayment begins.

Grace periods allow a borrower time to find employment before repayment begins as well as time to
establish a living expense budget in light of their expected monthly student loan payments. In doing so, the
borrower should be considering the different types of loan repayment schedules that are available. The
budget established should be realistic with the intention the borrower will make the maximum effort to
repay their student loans as aggressively as possible.

Under most circumstances, borrowers are allowed only one grace period which immediately follows the in-
school period – the period of time you were enrolled at least half time or full time in college or dental
school. This grace period is exclusive (or separate) of your total repayment time allowed in accordance to
the terms of your loan’s promissory note. There are some loan programs that will allow the borrower to
regain their full grace period if, during their grace period, they returned to school as at least a half time
student thus obtaining an in-school deferment. Other loan programs will require that the borrower expend
all of their grace period regardless of their post-graduation plans. Because you often are only be allowed
one grace period on your loans, loans borrowed in a prior education loan program might enter immediate
repayment upon graduation from Tufts. This especially happens if you took more than 6 months off
between college and dental school or dental school and your post-graduate program.

It’s important to note that some loans do not have grace periods. Grad PLUS loans do not have a grace
period and the student enters repayment within 30 days after graduation, withdrawal or dropping below
half-time status. Students who opted to enter an Early Repayment Federal Consolidation Loan (which
allowed them to consolidate while they were in school to take advantage of historically low interest rates)
had to forfeit their grace periods on Stafford Loans that were included in the Early Repayment Federal
Consolidation Loan. This means that the Early Repayment Consolidation Loan will enter repayment
within 30 days after graduation, withdrawal or dropping below half-time status.

Only one loan program, the Federal Perkins Loan, has a post deferment grace period provision. If the
borrower had previously utilized their grace period then, for instance, returned to school, they would have a
6-month grace period upon ceasing enrollment at least half-time.

Deferment

A student loan borrower is eligible for a deferment if they meet certain conditions that qualify them to
postpone repayment of their loans while meeting those conditions. Like a grace period, deferment time is
usually exclusive of total repayment time. For example, a student having just graduated dental school and
qualifies for a 2-year deferment period on a loan that has a maximum 10-year repayment period, will still
have 10 years to repay that loan after their deferment period expires. In most cases, the borrower is
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required to complete a deferment form seeking approval from your loan servicer (most can be obtained
from the loan servicer’s website). There are different types of deferment forms depending on the type of
deferment. Borrowers need to contact all of their loan servicers for the appropriate deferment form.
Borrowers must contact their private education loan lender/servicer to determine their repayment options
and the availability for deferments, since they oftentimes differ from federal or institutional loan programs.

Don’t make the mistake of assuming, because you’re allowed deferment on one type of loan, that you’re
eligible for that same deferment benefit for other loans. Deferment provisions differ by loan program and
can differ based on the date the loan was received. Also, don’t make the assumption that all your
lenders/loan servicers “talk” with one another. They definitely do not communicate with one another. In
the event that you have Stafford Loans from 2 different lenders, you most likely have 2 different loan
servicers. Thus, you need to complete a deferment form for each loan servicer.

In most cases the borrower is required to “expire” or use up all their grace period time before the deferment
status is placed on their loan accounts. For example, if the borrower is applying for an Economic Hardship
Deferment to defer his Stafford Loans payments, he would be required to expire (utilize) his entire grace
period first before his lender can determine his eligibility for deferment. This would mean upon expiration
of the Economic Hardship Deferment, the borrower would enter repayment. He would not have any grace
period left to utilize at that point.

Loans may accrue and capitalize interest during an eligible deferment period. Some programs offer a
reduced interest rate during your deferment period, which usually mirrors the interest rate charged during
the in-school and grace periods.

There are many types of deferments, but, usually, very few pertain to the profession of dentistry. Realize
that during the exit interview process, we’ll pay most attention to in-school deferment, military deferment
and economic hardship deferment. Students can reference their promissory notes and this manual for
additional deferment benefits but borrowers are encouraged to inquire with their loan servicers as
sometimes there are legislative changes made to deferment benefits. For instance, military deferment
benefits were recently enhanced in the fall of 2007 and, effective, 7/1/2009, Economic Hardship Deferment
criteria will change.

Forbearance

Forbearance is a temporary cessation of payments granted in increments not in excess of one year.
Borrowers are normally allowed a total of 24 months forbearance time per loan program. The borrower’s
lender(s)/ loan servicer(s) must approve a borrower’s request for forbearance. By arranging forbearance
with lender(s)/loan servicer(s), a borrower is keeping their account(s) out of delinquent status and avoiding
default. Borrowers may only request forbearance after they have used their grace period, or are nearing the
end of the grace period and do not qualify for any type of deferment.

In the case of federal loans, borrowers are granted a total of 24 months maximum forbearance time per loan
program. In some cases, the loan servicers may provide an additional 12 months forbearance time.
Forbearance time may or may not be granted for private education loans and the time frame for which they
are allowed is the prerogative of the lender. To request forbearance, a borrower must contact his
lender(s)/loan servicer(s) explaining the reason for the request. Forbearance requests can be made verbally
but many times you can request forbearance on the loan servicer’s website. Once the forbearance is
approved, your account will reflect that no payments are due for the duration of the forbearance, yet the
borrower may still receive a bill to reflect the status of the account and/or be given the opportunity to pay
accruing interest. It’s important to realize that payments must be made up until the point that the
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forbearance is approved. Borrowers should plan at least 30 days ahead of time when considering their
need for forbearance to allow for processing time.

Unlike a grace period and deferment period, forbearance periods are inclusive of total repayment time. For
instance, if a borrower has 10 years to repay a loan and he uses 24 months forbearance time, his monthly
payments will reflect an 8-year repayment schedule as opposed to 10 years. Obviously, this means that
taking forbearance will increase the monthly payment due. Interest during the forbearance period will also
accrue and capitalize onto the principal balance upon expiration of each forbearance period. Borrowers
have the option to pay interest during the forbearance period or to make payments when they are
financially capable even though their accounts are in forbearance.

The Financial Aid Office strongly encourages borrowers to use their forbearance options wisely. We
suggest borrowers only take forbearance for 6-month intervals or less, renewing the agreement if it is a
financial necessity. If the borrower’s financial situation doesn’t improve after 6 months forbearance time,
perhaps their financial situation is more of a permanent nature rather than temporary. In that case, and if
the borrower hasn’t done so previously, s/he should contact their loan servicer to discuss their options.
Perhaps the borrower can change his repayment schedules or pay a reduced amount. If forbearance time
must be taken, consider making reduced payments during the forbearance period to keep interest payments
current.

In most cases forbearance can be fairly easy to receive, yet borrowers should realize that private education
loan lenders (including Tufts University and the Tufts Loan program) do reserve the right to have the
borrower show proof of financial hardship. Additionally, they may require you keep interest current during
the forbearance. Also, recognize that if you’re having financial issues which are compromising your ability
to repay your federal loans, you’ll want to seek Economic Hardship Deferment first. Economic Hardship
Deferment is more difficult to obtain because the borrower must qualify for it based on income levels and
family size yet it may prevent more frequent capitalization of interest than repeatedly requesting
forbearance.

A borrower may qualify for what is termed a mandatory forbearance. If a borrower qualifies for this
because of certain conditions, a lender/loan servicer is required to grant the borrower mandatory
forbearance for the length of time those conditions exist. The borrower is required to submit
documentation as proof of those conditions. The most common example of mandatory forbearance for
dental school graduates entails participation in a hospital-based general practice residency (GPR). The
borrower will be required to submit documentation of his internship/residency program, certified by an
authorized program official, noting the beginning and ending dates of the residency program. In these
cases, borrowers are required to utilize their entire grace period before a mandatory forbearance is
authorized by the lender(s)/ loan servicer(s).

A borrower’s lender(s)/loan servicer(s) can provide additional details regarding mandatory forbearance
including information of the various types of mandatory forbearance and the documentation required in
order to receive them.

Clarification of Deferment Eligibility for General Practice Residencies

There has been much confusion regarding eligibility for internship/residency deferments. Unfortunately,
many students in the past have thought that if they are enrolled in a General Practice Residency (GPR) or
Advanced Education in General Dentistry (AEGD), they’d be able to defer their student loans. While that
might be true in some cases, it really depends on the residency program as well as the type of loan you
                                                                                                              13
borrowed. Although Health Professions Student Loan (HPSL) allows for internship/residency deferment,
Federal Perkins, Stafford Loans and Grad PLUS loans generally do not.

Any borrower who had no outstanding balance of Stafford Loans as of July 1, 1993 and borrowed Stafford
loans (the loans were made and disbursed) after July 1, 1993 ARE NOT eligible for internship/residency
deferment. This same rule applies to all Perkins and Grad PLUS borrowers seeking a deferment of these
loans during an internship/residency. If the borrower is unable to make payments during their
internship/residency, they could seek an Economic Hardship Deferment and, if ineligible for that, a
mandatory forbearance (see prior section) after their grace period has expired.

Borrowers whose Stafford Loans were made and disbursed prior to July 1, 1993, and who still had an
outstanding balance on that date when they borrowed a subsequent Stafford Loan after July 1, 1993, remain
eligible for internship/residency deferment for a maximum of 2 years. This same rule applies for all
Perkins Loan borrowers seeking a deferment for internship/residency. The grace period would have to be
expired first before the deferment is applied to the borrowers’ accounts.

It has been our observation that the confusion appears to lie in how the general practice residency program
considers its participants. Some GPR programs at hospitals are affiliated with schools while others have no
affiliation with schools. It has been our experience in noting that school-based GPR program participants
are certified as at least half time students by that school’s Registrar’s Office. Therefore, the student is
actually requesting an in-school deferment from their lender/loan servicer and not an internship/residency
deferment. In these cases, the student receives all the benefits of an in-school deferment (for Perkins,
Stafford and Grad PLUS), and if they do not expire their grace periods (on their Perkins or Stafford Loans)
before entering this deferment, the student normally receives their grace period after their deferment
period. Hospital-based programs do not list students as in-school because they are not eligible to do so.
Therefore hospital-based GPR participants can seek a mandatory forbearance (see previous section).

Again, we have no knowledge as to the criteria of what certifies a program as hospital- or school-based
nor do we know that ALL school-based programs list students as registered students enrolled at least half
time. Those borrowers who will be participating in a GPR after graduation are urged to contact their
program directors for additional information. It is ultimately up to the lender/loan servicer who must
uphold the provisions set forth by the Dept. of Education.

Choice in FFELP Repayment Schedules

Federal Family Education Loan Program (FFELP) borrowers, which include those that borrowed Federal
Stafford Loan and Grad PLUS loans, have a variety of choices for repayment schedules. Borrowers will
often be set up with a standard repayment schedule initially. The standard schedule (also sometimes
referred to as a fixed repayment schedule) entails repaying both principal and interest through the
maximum 10-year repayment period. Although this is the most optimal repayment schedule in terms of
being the least costly to the borrower, it is often not realistic depending on a borrower’s overall student
loan debt in combination with their cost of living.

Borrowers who wish to keep to a 10-year repayment schedule to the extent they’re financially capable of
can consider a graduated repayment schedule where the borrower is making minimal payments towards
principal during the initial years in repayment yet are making payments on the interest due during that
period of time. Most loan servicers will allow borrowers to choose paying interest only for a period of 2 or
4 years. After that period of time, the student begins to repay principal for the remainder of the repayment
period.
                                                                                                          14
Borrowers may also wish to consider an income-sensitive repayment schedule. Lenders/loan servicers
must offer these types of schedules for repayment of federal student loans provided the borrower meets the
required minimum monthly payment and/or other qualifications such as income levels. These schedules
require smaller payments at the beginning of repayment when your income is at its lowest. Gradually, as
your income increases, the expected monthly payment increases. The theory behind this schedule is that
when your income is higher, higher payments are affordable. When your income is at its lowest—probably
at the beginning of your career—some payment relief is provided. Income-sensitive schedules are for a
period of 10 years.

Income-based repayment schedules will become available to borrowers beginning July 1, 2009. Income-
based repayment caps monthly payments at 15% of your monthly discretionary income, where
discretionary income is defined as the difference between adjusted gross income (AGI) and 150% of the
federal poverty line which is published annually by the Dept. of Health and Human Services
(http://aspe.hhs.gov/poverty/index.shtml). The monthly payments are adjusted annually based on changes
in annual income and family size. The maximum repayment length for income-based repayment is 25
years. After 25 years, any remaining balance is discharged (forgiven). Note that the amount forgiven is
considered taxable income during the year in which it was forgiven.

If you have William D. Ford Federal Direct Loans, including a Federal Direct Consolidation Loan, and are
making payments under an income-based repayment schedule, you may be entitled to have the balance of
the loan(s) forgiven after 120 payments if, during those 10 years, you have been employed in public
service/non-profit sector including public health. Note that borrowers are allowed to consolidate Federal
Stafford Loans into a Federal Direct Consolidation Loan for purposes of participating in the public service
loan forgiveness program. Note that the amount forgiven is considered taxable income during the year in
which it was forgiven.

Extended repayment schedules of up to 25 years are available to Federal Stafford and Grad PLUS
borrowers if their total FFELP indebtedness (which includes Federal Stafford, Grad PLUS and Perkins
Loans) exceed $30,000.

Loan consolidation provides another opportunity for students to extend their repayment periods beyond the
standard 10-year timeframe. Although this manual addresses Federal Loan Consolidation more thoroughly
later, borrowers can essentially collapse their federal student loans into a new loan with different terms.
Depending on how much the borrower is consolidating, repayment schedules can be extended to up to 30
years. There’s no penalty for overpayment and borrowers can be considered for graduated, income-based
or income-sensitive schedules. However, borrowers should carefully consider whether or not loan
consolidation is a good choice. At one point in time it was extremely beneficial for students to consolidate
their federal student loans. Nowadays, students may want to consider their other options, unless they wish
to consolidate into the Federal Direct Consolidation Program for purposes of participating in the public
service loan forgiveness program.

You must arrange your repayment schedule with each of your loan servicers. Although the afore-
mentioned repayment schedules only apply to FFELP student loans, private education loan borrowers can
discuss similar options provided by their private education loan lenders. Private education loans have
repayment schedules of up to 15 to 20 years in most cases. Many private education loan lenders will work
with borrowers to devise repayment plans that meet the needs of borrowers.

Borrowers have the right to change their repayment schedule at any point during repayment yet they must
contact their loan servicer to formally make that change. At any point, borrowers can pay more than what
is expected of them without penalty.
                                                                                                            15

The drawback to a graduated, income sensitive, income-based or extended repayment schedules is that
borrowers will pay more in interest had they repaid their loans under the standard repayment schedules
because you’re paying back principal at a slower pace than normal. Recall that the amount of interest you
pay is based on the principal balance owed. The longer you take to repay principal, the more interest you
inevitably pay. However, since there are no penalties to accelerate repayment or switch payment schedules
to a shorter length, the borrower can do either of these when they feel financially comfortable to avoid
excessive interest charges. Statistics indicate that the borrower is more likely to enter delinquency or
default within 5 to 6 years after graduation or withdrawal because the borrower’s income tends to be at it
lowest point. The use of graduated and/or extended payment schedules may prevent loans from going into
delinquency or default.

Income sensitive and income-based schedules will require income verification to ensure your qualification
for these schedules. Because dental practitioner salaries tend to be high, borrowers might not qualify for
them unless the borrower is involved in a residency program or they are otherwise experiencing a financial
hardship. Also, consider that a borrower may qualify for either the income-based or income-sensitive
repayment schedules during the initial years of repayment where they are paying interest only or, in some
cases, paying less than what has accrued in monthly interest. As their income increases, the borrower may
not qualify for the income-based or income-sensitive schedules or monthly payments increase to the point
where they may be a financial burden because income has increased. At the point the payments become
difficult to manage, the borrower should consider an alternative repayment schedule such as extended
schedules. But, realize that the initial payment due under an alternative repayment schedule may be large
in order to “catch up” in payment towards principal and interest due on that particular repayment schedule.

Loan Forgiveness Programs

Under certain circumstances, certain federal agencies will cancel all or part of an educational loan. In order
to qualify the borrower must meet very specific criteria where the borrower is performing volunteer work
(such as Americorps, VISTA and Peace Corps), certain types of military duty, teach or practice in low-
income and under-served communities.

A new loan forgiveness program has been created for federal student loan borrowers who work in certain
areas of public service (including public health) for a period of 10 years having made 120 payments
towards eligible loans. You may select from standard, income-based repayment schedules or income-
contingent schedules (a repayment option under the Federal Direct Loan Program similar to income-
sensitive schedules). Although only Federal Direct Loans are eligible for cancellation after 10 years of
service, students that borrowed Federal Stafford, Grad PLUS or Federal Consolidation Loans made under
the FFELP program may consolidate those loans into a Federal Direct Consolidation Loan for purposes of
participating in the Public Service Loan Forgiveness Program.

If you believe you qualify for loan forgiveness, talk to your employer or the director of the program for
which you are volunteering. Your loan servicers will also help to ensure you receive eligible benefits.

Graduated Repayment Schedules for LDS, HPSL, Perkins and Tufts Loan Borrowers

Students who have borrowed Loans for Disadvantaged Students (LDS), Health Professions Student Loan
(HPSL), Federal Perkins Loan and/or Tufts Loan will be required to complete online exit counseling.
During the online session, students will be initially provided with a standard/fixed repayment schedule.
However, provided the borrower qualifies, they have the choice in selecting a graduated repayment
schedule. Similar to those schedules offered by Stafford and Grad PLUS loan servicers, graduated
                                                                                                          16
schedules provide a lower payment due during the first few years of repayment paying mostly interest
and very little towards principal, with payments gradually increasing over time.

To switch from a fixed/standard repayment schedule to a graduated schedule for LDS, HPSL, Perkins or
Tufts Loans at any point in time during repayment, contact the Student Loan Office (see page 19 for
contact information).

Borrower Benefits/Interest Rate Reduction Programs

Some lenders offer a reduction in your loan’s interest rate if you make a set amount of consecutive, on-time
payments for a set period of time. If the borrower chooses to have student loan payments deducted
automatically from their checking or savings account (direct re-pay programs often called “ACH”
payments) some lenders will reduce the interest rates of those particular loans. Borrower benefits are most
often tied to Federal Stafford Loans and/or Federal Consolidation Loans however some private education
loans may provide borrower benefits. Since these may fluctuate year to year, it’s wise to contact your
lenders for information on how to qualify for borrower benefits. Many lenders were forced to change their
borrower benefit programs based on new legislation in the fall of 2007. Tufts University Stafford Loan
borrower benefits remain intact for all loans borrowed through June 30, 2008. During the 2008-09
academic year, Tufts University ended their Stafford Loan and students needed to use different lenders,
whose loans carried different borrower benefits. Again, those benefits remain available on those loans for
the life of the loan should the borrower qualify for them.

Tufts University Stafford Loan borrowers (serviced by NES) and NES Federal Consolidation Loans (which
included Tufts University Stafford Loans) can receive the following borrower benefits if they qualify:

   •   1% interest rate reduction after 24 months consecutive on time payments
   •   Additional 1% interest rate reduction after 48 months consecutive on time payments
   •   0.25% interest rate reduction if you sign up for ACH payments

Tufts University Stafford Loan borrowers (for Stafford Loans serviced by SallieMae)
NOTE: IN ORDER TO TAKE ADVANTAGE OF THE BORROWER BENEFITS NOTED BELOW
YOU MUST SIGN UP TO “MANAGE YOUR LOANS ONLINE” AT SALLIEMAE’S WEBSITE,
WWW.MANAGEYOURLOANS.COM:

   •   0.30% Interest Rate Reduction (IRR) at first disbursement for Unsubsidized Stafford Loans
       (available during uninterrupted periods of in-school, grace and approved deferment status)
   •   During repayment an immediate 0.75% IRR for making monthly payments using automatic debit.
        Borrowers must remain enrolled in automatic debit to retain this benefit.
   •   1% IRR after the first on time payment (Sub and Unsubsidized Stafford Loans). To receive this
       benefit, borrowers must register to manage their loans online (www.manageyourloans.com) before
       repayment begins to receive account information by email.
   •   Interest Capitalization - Accrued interest on Unsubsidized Stafford loans capitalizes ONCE at
       repayment (following uninterrupted periods of grace and/or deferment).
   •   Back on Track benefit which allows borrowers who fail to make any single payment on time to earn
       back the 1% IRR after 24 on schedule payments. This reinstatement may occur only once.

Stafford and Federal Consolidation Loan borrower benefits will often differ from each other even if it
involves the same lender for either loan program. You should be aware of any and all borrower benefit
programs offered by your lenders and understand how you can qualify and the impact on borrower benefits
                                                                                                             17
should the borrower wish to consolidate their loans. In addition, ask directly how requesting a deferment
and/or forbearance may affect your ability to qualify for borrower benefits. When attempting to qualify for
borrower benefits, you need to be careful in meeting scheduled payments on time. Most lenders’ programs
do not allow any leniency.

Prepayment

There are no penalties for prepayment of any student loan program, federal, private or university including
consolidation loans. If you wish to pay off your loan(s) in full, contact your lender to ask for the pay off
amount. You should ask what date the pay off amount will be adjusted for interest and make payment in
full prior to that date. When asked to do so, most lenders/loan servicers will give a borrower a “10-day pay
off” amount, which will allow the borrower 10 days to make payment in full. When a loan is paid in full,
your lender should send you the original promissory marked “Paid in Full.” Keep this copy for your
records.

Consolidation Programs

Federal Loan Consolidation Programs allow the borrower to combine all their federal student loans into
one loan while in their grace period or during repayment. The interest rate on the consolidation loan is
based on a weighted average interest rate of the loans the borrower has selected to consolidate. The rate is
then rounded up to the nearest 1/8th percentage point. That rate then becomes the fixed interest rate for the
life of the loan which is a maximum of 30 years depending on the amount of loans being consolidated.
Federal loans eligible for consolidation include Federal Perkins, HPSL, LDS, Federal Stafford, Federal
Direct and Grad PLUS loans. Borrowers cannot consolidate private loans such as Tufts Loans, MEFA,
DEAL, Access or Signature loans into a Federal Consolidation Loan.

Although borrowers have the right to select any lender for their FFELP Consolidation Loan, many lenders
are no longer making consolidation loans due to the tight credit markets. If you wish to consolidate yet
can’t find a FFELP consolidation lender, you may consolidate your eligible loans with the US Dept. of
Education using their Federal Direct Consolidation Loan program. FFELP and Direct consolidation
programs are very similar. Both determine the interest rate the same way, both allow for the same loan
deferments and both offer a maximum 30-year repayment schedule. The Direct Consolidation Loan
program, however, offers an income-contingent repayment schedule rather than an income-sensitive
repayment schedule offered under the FFELP consolidation program. Both schedules are very similar.
Both Direct and FFELP consolidation loans offer standard, graduated and income-based repayment
schedules. Federal Direct Loan borrowers are eligible for the Public Service Loan forgiveness program
where the remaining loan balance is forgiven after 10 years of working in public service/public health and
the borrower has utilized an income-based repayment schedule.

Loan consolidation programs have become less popular in recent years since most federal loans are now at
fixed rates of interest. Prior to July 1, 2006, Federal Stafford Loans interest rates were variable, in that
their rates fluctuated annually. When interest rates were extremely low, borrowers eligible for
consolidation benefited because their consolidation loan would be locked into a very, very low fixed
interest rate for up to 30 years.

Prior to July 1, 2006, borrowers might have taken advantage of Early Repayment Consolidation Loans
which allowed them to consolidate their Stafford Loans while they were in school. In order to be eligible
for Early Repayment Consolidation, the borrower had to forfeit grace periods on their existing Stafford
Loans. However, the benefit to Early Repayment Consolidation was that it allowed borrowers who were
enrolled in school and otherwise not eligible to consolidate, to do so and take advantage historically low
                                                                                                            18
interest rates at the time. The option to do Early Repayment Consolidation expired on July 1, 2006.
After that date, Stafford loan rates changed from variable to fixed rates. Borrowers are now only allowed
to consolidate during their grace period or while in repayment of their loans.

Although consolidation loans are less advantageous as they once were to borrowers, they continue to be a
mechanism to lower monthly payments to the extent possible. There is no prepayment penalty, and, for
those students with multiple loan servicers, consolidation does help to minimize tracking your loan
servicers and payment records.

Sale of Student Loans

Up to this point, students have generally dealt with the Financial Aid Office in hopes of finding answers to
many of their questions. When students enter repayment, they may be corresponding with several different
agencies. It is important for the student as a student loan borrower to recognize these different agencies
and their purpose. The following are organizations in which the borrower should be familiar:

Lender: This is the bank or credit union from which you originally borrowed the loan or is considered the
current “holder” of the loan (that entity that owns your promissory note). AKA: Lending Institution.
Examples are Key Bank, Tufts University, NES or Citibank.

Secondary Market: This is a corporation that may purchase your student loans from your lender. Lenders
may opt to sell their student loan portfolios in order to generate new capital to lend new student loans to
new borrowers. When your loan is sold nothing changes about the loan except whom you pay back.
Examples of secondary markets are Student Loan Marketing Association (SallieMae) and IDAPP.

Loan Servicer: This is another term for billing agency. When a secondary market buys your loan, they
either own or contract with a loan servicer who is responsible for sending bills to borrowers each month,
processing deferment forms, granting forbearance, etc. Generally when you are contacting your "lender"
you are actually contacting the loan servicer. Popular loan servicers are SallieMae Loan Servicing Center,
AES Graduate Loan Services (PHEAA), University Accounting Services (UAS) and National Education
Servicing (NES).

Some lenders choose not to sell their loan portfolios while others will. These lenders may still use a loan
servicer or may service their student loans “in-house”. Examples of lenders who choose not to sell their
portfolios yet contract with a third-party loan servicer are Key Bank (whose loans are serviced by AES
Graduate Loan Center) and Tufts University for HPSL, LDS, Perkins Loans or Tufts Loans (our loan
servicer is University Accounting Service LLC or UAS). Lenders that service their loans in-house include
Citibank and SallieMae Education Trust.

Students who have borrowed several different types of loans will possibly have their loans sold to different
secondary markets, thus having their loans serviced in different places. However, every time your lender
sells a loan to a secondary market, the lender and secondary market (the old and the new holder of the loan)
are required to notify you in writing. In doing so, they provide the borrower with the address and phone
number of the loan servicer. It is very important to keep each of these letters so you know who to contact
with regards to repayment of each of your loans.

The recent credit market crisis did affect the student loan industry to a large degree. Some student loan
lenders were unable to secure enough capital to make new loans to students. In order for federal student
loans to remain accessible to students and families, Congress approved legislation that enables the Federal
government to purchase loans made under the FFELP program (Stafford and Grad PLUS Loans) from
lenders through 6/30/2010. This provides an opportunity for lenders to sell their student loan portfolios to
the US Dept. of Education thus gives them ability to raise much needed capital. In turn, FFELP student
loan lenders are able to make new loans to students. What this essentially means is that Stafford and Grad
PLUS loans borrowed during the 2008-09 and 2009-10 academic years can be sold to the US Dept. of
                                                                                                          19
Education, where the loan will also be serviced (the US Dept. of Education contracts a third party
servicer). Students who perhaps borrowed loans from SallieMae intending for their 2008-09 loans to be
serviced by Salliemae, may end up having those loans sold and serviced by the US Dept. of Education’s
loan servicer instead. Recall that when a loan is sold, the borrower is notified by both the new and old
holders of the loan. It’s important to realize that many lenders may end up taking advantage of this federal
buy-down program. There’s no way to tell if a lender intends to sell their portfolio or when it will happen.
It’s purely up to the lender.

You will or already have been contacted with regards to the sale of your student loans prior to repayment.
If you are ever confused as to who owns the loan or to whom do you make a payment, you may contact
your original lender. Your lender's address and phone number will be provided to you during your exit
interview with the Financial Aid Office. If we are aware of your loan’s servicer, we will provide that
information.

Tufts University Student Loan Office

The Tufts Student Loan Office is part of Student Financial Services, located in Dowling Hall on the
Medford campus. That particular office is responsible for the collection of Tufts Loan, Federal Perkins,
Health Professions Student Loan (HPSL) and Loans for Disadvantaged Students (LDS). Perkins, HPSL
and LDS are NOT sold to secondary markets unless the student wants to apply for a consolidation loan (a
Tufts Loans cannot be consolidated as it is considered a private loan). Tufts University contracts with
University Accounting Service LLC (UAS) to perform all aspects of billing, including processing
deferment requests and providing loan payoff amounts as well as other general billing information. Please
note that UAS DOES NOT have authority to grant forbearance. If you are consolidating HPSL, LDS or
Perkins loans, Loan Verification Certificates should be mailed to Tufts University Student Financial
Services for completion.

If you are seeking a change in your repayment schedule, request forbearance, need to have a Loan
Verification Certificate completed for a loan consolidation application or have specific questions
regarding repayment of HPSL, LDS, Tufts Loan or Perkins you must contact the Tufts Student Loan Office:

       Tufts University
       Student Financial Services
       Dowling Hall
       419 Boston Ave.
       Medford, MA 02155
       617/627-4605
       FAX: 617/627-3987
       EMAIL: Studentloans@ase.tufts.edu

       For Tufts Loan Deferment Forms (for all Tufts Loans borrowed AFTER 7/1/07):
       http://finaid.tufts.edu

For all deferment form requests (except for Tufts Loans borrowed after 7/1/07), change of address
information* and general billing questions, you should contact:

       University Accounting Services LLC (UAS)
       P.O. Box 932
       Brookfield, WI 53008-0932
       1-800-999-6227
       www.uaservice.com
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All Tufts Loan, HPSL, LDS or Perkins Loan payments should be directed to:

       University Accounting Services, Inc.
       P.O. Box 5291
       Carol Stream, IL 60197-5291

   To change your address, phone number or name you may contact any of the addresses above. Note
   that updating your contact information with the Student Affairs Office or the Alumni Relations Office
   WILL NOT update the Student Loan Office or University Accounting Services. YOU MUST CONTACT
   THE LATTER SEPARATELY!!
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                         Federal Family Education Loan Programs (FFELP)


Federal Stafford Program - Subsidized and Unsubsidized

Maximum Loan Amount:             Subsidized -      $8,500/yr
                                                   $65,500 aggregate

                                 Unsubsidized - $40,500* minus Subsidized award/yr
                                                Aggregate limit equals $224,000* minus Subsidized
                                                Stafford Loan amount
                                                NOTE: Prorated annual limit up to $47,167 may have
                                                applied for periods of enrollment in excess of 9 months
                                                for first-time health professions degree candidates.

Interest Rate: Loans borrowed on or after 7/1/2006                   – 6.8% (Fixed Rate)
               Loans borrowed between 7/1/1998 and 6/30/2006         – 3.61%/4.21% (Variable Rate)**
               Loans borrowed prior to 7/1/1998                      – Rates vary based on when
                                                                       loans were disbursed; check
                                                                       with loan servicer for details

Subsidized Stafford Loans are interest-free while student is enrolled in school, during grace and eligible
deferment periods. Unsubsidized Stafford Loans accrue interest during these periods of time. Borrowers
can opt to pay interest to avoid capitalization of interest. If gone unpaid, interest will be added to the
principal balance of the loan at the end of the student’s grace period or upon expiration of an eligible
deferment period or after forbearance period.

* Maximum annual limit for post-graduate students is $20,500 less Subsidized Stafford Loan amount.
Post-graduate aggregate limit can’t exceed $138,500. To ensure the student does not exceed this borrowing
limit, the Financial Aid Office must consider the amount the student borrowed thus far in Federal Stafford
Loans, then subtract the additional Unsubsidized Stafford Loan that was borrowed as a first-time health
professions student (usually the additional amount received per year in excess of $20,500 during their
DMD program).

 ** Stafford Loans based on variable rate interest equal to the 91-day Treasury Bill + 1.7% during the in-
school, grace and deferment periods (currently 3.61%) and 91-day Treasury Bill + 2.3% during repayment
(currently 4.21%). Interest will fluctuate once a year each July 1st based on the 91-day Treasury Bill
auctioned on or near June 1 each year. There is an interest rate cap of 8.25% for the life of the loan.

Grace Period: 6 months

Repayment Length: 10 - 25 years depending on type of repayment schedule selected.

Repayment Schedules Available (Borrowers can select different repayment schedule while in
repayment):
   • Standard - Fixed payments of principal and interest; Payment period of 10 years
   • Income-Sensitive - Payments based on income; Payment period of 10 years
   • Extended Repayment - Fixed payments of principal and interest; Payment period of up to 25 years
      allowed if total of all federal student loans is $30,000 or greater
                                                                                                           22
   •   Graduated Repayment - Similar to extended schedules but monthly payments begin lower –
       usually interest only and increase every 2 years; Payment period of up to 25 years allowed if all
       federal loans is $30,000 or greater
   •   Income-Based - Monthly payments are capped at 15% of monthly discretionary income, where
       discretionary income is defined as the difference between adjusted gross income (AGI) and 150%
       of the federal poverty line which is published annually by the Dept. of Health and Human Services
       (http://aspe.hhs.gov/poverty/index.shtml). The monthly payments are adjusted annually based upon
       changes in annual income and family size; Payment period of up to 25 years After 25 years, any
       remaining balance is discharged (forgiven). Note that the amount forgiven is considered taxable
       income during the year in which it was forgiven.

Deferment Eligibility Criteria: Refer to chart on page 25.

Forgiveness of Stafford Loans for Certain Service:

Federal Stafford Loans can be cancelled for full-time service as a teacher in a designated elementary or
secondary school serving students from low-income families, special education teacher (includes teaching
children with disabilities in a public or other nonprofit elementary or secondary school), qualified
professional provider of early intervention services for the disabled, teacher of math, science, foreign
languages, bilingual education, or other fields designated as teacher shortage areas, employee of a public or
non-profit child or family service agency providing services to high-risk children and their families from
low-income communities, nurse or medical technician, law enforcement or corrections officer, staff
member in the educational component of a Head Start Program, service as a Vista or Peace Corps
Volunteer and service in the Armed Forces (up to 50% in areas of hostilities or imminent danger).

Secondary school math and science teachers and elementary/secondary school special education teachers
who commit to working in high-need schools for five years can obtain up to $17,500 in Stafford loan
forgiveness. They must teach full time for five consecutive years in a qualifying low-income school and be
"highly qualified". (The Taxpayer-Teacher Protection Act of 2004, HR 5186, increased the amount of
forgiveness from $5,000 to $17,500 on October 30, 2004.)

The College Cost Reduction and Access Act of 2007 established a new public service loan forgiveness
program. This program discharges any remaining debt after 10 years of full-time employment in public
service. The borrower must have made 120 payments as part of the Direct Loan program in order to obtain
this benefit. Only payments made on or after October 1, 2007 count toward the required 120 monthly
payments. (Borrowers may consolidate into the Federal Direct Consolidation Loan in order to qualify for
this loan forgiveness program.) The forgiveness occurs after 120 monthly payments made on or after
October 1, 2007 on an eligible Federal Direct Loan. Periods of deferment and forbearance are not counted
toward the 120 payments. Payments made before October 1, 2007 do not count. Likewise, only payments
on a Federal Direct Loan are counted.

In order to qualify for the Public Service Loan Forgiveness program, the borrower must be employed full-
time in a public service job for each of the 120 monthly payments. Public service jobs include, among other
positions, government, military service, public safety and law enforcement (police and fire), public health,
public education, public early childhood education, public child care, social work in a public child or
family service agency, public services for individuals with disabilities or the elderly, public interest legal
services (including prosecutors, public defenders and legal advocacy in low-income communities), public
librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3)
organizations. Full-time faculty at tribal colleges and universities, as well as faculty teaching in high-need
areas, also qualify.
                                                                                                        23
Eligible loans include Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct
PLUS Loans, and Federal Direct Consolidation Loans. Borrowers in the Direct Loan program do not need
to consolidate in order to qualify for loan forgiveness. Borrowers in the FFEL program (Stafford Loan,
Grad PLUS Loans) will need to consolidate into the Federal Direct Consolidation Loan in order to qualify.
Borrowers may use income-based, income contingent, standard repayment or a combination of these
repayment plans. Payments made under other repayment plans (e.g., extended repayment and graduated
repayment) do not count. Note that if selecting a solely a standard repayment schedule, there’d be no
balance remaining after the loan has been forgiven since standard repayment schedules only have a
maximum timeframe of 10 years. The amount of loan that is forgiven after 10 years is, at the present time,
considered taxable income during the year that the loan is forgiven.
                                                                                                       24

Grad PLUS Loan Program

Loan Amount: No annual or aggregate limit.
             Eligibility based on student’s annual cost of education less other financial aid

Interest Rate: 8.5% (Fixed )

Grace Period: None

Repayment Length: 10 – 25 years depending on repayment schedule selected.

Repayment Schedules Available (Borrowers can select different repayment schedule while in
repayment):
   • Standard - Fixed payments of principal and interest; Payment period of 10 years
   • Income-Sensitive - Payments based on income; Payment period of 10 years
   • Extended Repayment - Fixed payments of principal and interest; Payment period of up to 25 years
      allowed if total of all federal student loans is $30,000 or greater
   • Graduated Repayment - Similar to extended schedules but monthly payments begin lower – usually
      interest only and increase every 2 years; Payment period of up to 25 years allowed if all federal
      loans is $30,000 or greater
   • Income-Based - Monthly payments are capped at 15% of monthly discretionary income, where
      discretionary income is defined as the difference between adjusted gross income (AGI) and 150%
      of the federal poverty line which is published annually by the Dept. of Health and Human Services
      (http://aspe.hhs.gov/poverty/index.shtml). The monthly payments are adjusted annually based upon
      changes in annual income and family size; Payment period of up to 25 years After 25 years, any
      remaining balance is discharged (forgiven). Note that the amount forgiven is considered taxable
      income during the year in which it was forgiven.

Deferment Eligibility Criteria: Refer to chart on page 25.

Grad PLUS loans enter repayment after the final disbursement of each loan. The loan then can be placed
into deferment if the borrower is enrolled at least half time in school. Interest begins to accrue while
student is enrolled in school and during any other eligible deferment period. Borrowers can defer payments
of interest during eligible deferment periods. Unpaid interest will capitalized at the end of deferment
period. Realize that there is no grace period on Grad PLUS loans and the borrower will enter repayment
within 30 days of ceasing at least half time enrollment (or upon graduation).

Public Service Loan Forgiveness Program: Refer to Public Loan Forgiveness Program information
under the Forgiveness of Stafford Loans for Certain Service section of this handbook.
25
26
                                                                                                            27
Federal Perkins Loan

Loan Amount:                          $ 6,000 maximum/yr.
                                      $40,000 aggregate limit

Interest Rate:                        5% (Fixed) - no interest accrues during in-school or other eligible
                                      deferments or grace periods.

Grace Periods:                        9 months (new borrowers as of 7/1/87)
                                      6 month post-deferment grace period provided after an eligible
                                      deferment period.

Repayment Length:                     10 years exclusive of deferments

Repayment Schedules Available:         Standard or Graduated (Note: Graduated schedules available to
                                       qualified borrowers and approved by the Tufts Student Loan Office.)

Deferments:                            Refer to NDSL/Perkins Deferment Chart on page 28.

Forgiveness of Perkins Loans for Certain Service:

Federal Perkins Loans can be cancelled for full-time service as a teacher in a designated elementary or
secondary school serving students from low-income families, special education teacher (includes teaching
children with disabilities in a public or other nonprofit elementary or secondary school), qualified
professional provider of early intervention services for the disabled, teacher of math, science, foreign
languages, bilingual education, or other fields designated as teacher shortage areas, employee of a public or
non-profit child or family service agency providing services to high-risk children and their families from
low-income communities, nurse or medical technician, law enforcement or corrections officer, staff
member in the educational component of a Head Start Program, service as a Vista or Peace Corps
Volunteer and service in the Armed Forces (up to 50% in areas of hostilities or imminent danger).

Federal Perkins Loans, if included in a Federal Direct Consolidation Loan, can be eligible for the Public
Service Loan Forgiveness Program. See information regarding Public Loan Forgiveness Program under
Forgiveness of Stafford Loans for Certain Service section of this handbook.
28
                                                                                                              29
                                            University Loans

Tufts University Loan funds are comprised of individual named student loan funds that were established
through the generosity of various donors. These named funds appear on copies of the Tufts Loan
promissory notes. During the spring of 2007, the university agreed to change the terms of the Tufts Loan
programs by lowering the interest rate, extending the interest subsidy during the student’s grace period and
allowing deferment of payment for those student that meet certain criteria such as continuing their
education for advanced professional training. These new terms apply to Tufts Loans received after July 1,
2007 (for loan awards made during the 2007-08 academic year and in subsequent years) and DO NOT
apply to Tufts Loans received prior to that date. It is possible, therefore, for a borrower who has received
multiple Tufts Loan awards while enrolled at TUSDM to have different interest rates applied to their loans
and may be eligible to defer qualified Tufts Loans but would enter repayment on other Tufts Loans that
don’t qualify for deferment. Should borrowers be unable to repay Tufts Loans when they become due and
the loan does not qualify for deferment (applicable to loans received after 7/1/07 only), borrowers must
contact the Tufts University Student Loan Office to request forbearance. Note that interest payments may
be required during periods of forbearance.

Tufts Loans Borrowed Prior to 7/1/2007

Loan Amount:                  Amount varies

Interest Rate:                8% - no interest accrues while the student is enrolled in the educational
                              program for which they received the loan.

Grace Period:                 6 months – interest begins to accrue at the start of the grace period
                              and capitalizes at end of grace period

Repayment Length:             10 years exclusive of grace period

Repayment Schedules Available: Standard or Graduated (Note: Graduated schedules available to
                               qualified borrowers and approved by the Tufts Student Loan Office.)

Deferment Provisions:         None

Tufts Loans Borrowed After 7/1/2007

Loan Amount:                  Amount varies

Interest Rate:                7% - no interest accrues while the student is enrolled in the educational
                              program for which they received the loan.

Grace Period:                 6 months – interest does not accrue during grace period.

Repayment Length:             10 years exclusive of grace period

Repayment Schedules Available: Standard or Graduated (Note: Graduated schedules available to
                               qualified borrowers and approved by the Tufts Student Loan Office.)

Deferment Provisions:         Maximum total of five years while pursuing an internship,
                              residency, or full-time course of graduate study. Interest will accrue during
                                                                                                              30
                              eligible deferment periods and, if gone unpaid, will capitalize at the end of
                              the deferment period.


Please remember that you were required to provide a co-borrower for the Tufts Loan. The co-signer is
responsible for repayment of this loan should you (the borrower) not repay for any reason including
default, disability or death.

Tufts University contracts with University Accounting Services (UAS) to provide loan servicing on all
Tufts Loans (see page 19 for contact information). Borrowers requesting a change of address/contact
information may contact either the Tufts Student Loan Office or UAS. Borrowers requesting deferment on
eligible Tufts Loans (borrowed after 7/1/2007) may download a form at http://finaid.tufts.edu or contact the
Student Loan Office at (617) 627-4605. Borrowers seeking forbearance on any Tufts Loan regardless of
when they borrowed it must contact the Student Loan Office.
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Federal Health Professions Loan Programs

Health Professions Loan Program (HPSL) & Loans for Disadvantaged Students (LDS)

Loan Amount:                  Amount varies

Interest Rate:                5% - interest free during in-school, grace period and deferment periods

Grace Periods:                One year (one allowed immediately following graduation/withdrawal)

Repayment Length:             10 years exclusive of deferment periods

Repayment Schedules Available: Standard or Graduated (Note: Graduated schedules available to
                               qualified borrowers and approved by the Tufts Student Loan Office.)

Deferments:

• Active duty in the uniformed services (maximum 3 years)

• Peace Corps volunteer (maximum 3 years)

• Advanced professional training such as General Practice Residency (Unlimited)

• Leave of absence to pursue related educational activity (maximum 2 years)

• Training fellowship, training programs and related educational activities for graduates of health
professions schools (maximum 2 years)

Deferments are granted only after the end of the grace period. There is no additional grace period allowed
after a deferment period unless the student enrolls full-time in another health professions school that begins
before the grace period expires.
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                                       Private Educational Loans

Although the Financial Aid Office is not required to review terms, repayment rights and responsibilities of
private loan programs, we recognize a considerable number of students had borrowed private education
loans while enrolled. Due to time constraints however, these programs will not be reviewed extensively
during the exit counseling session. The following chart provides some basic terms of many of the private
education loans used by students in recent years. The information should be sufficient to answer most
borrowers' immediate questions regarding repayment of their private education loans. However, recognize
that each year the lender may have changed their program’s terms or their borrower benefits. The basic
terms provided are consistent with the lender’s most recent loan product and do not necessary reflect the
terms of your private education loan. Borrowers are directed to contact their lender or their promissory
notes for specific questions and repayment terms including borrower benefit opportunities.

It’s important to remember that private loans are not bound by the same set of federal regulatory
requirements as, of course, federal student loans are. In addition, private education loan lenders may not
update your enrollment status information using the National Student Loan Clearinghouse information that
your federal loan servicers utilize, which means you may need to provide written verification that you’re
enrolled in school or you are participating in an internship or residency program. The Financial Aid Office
STRONGLY encourages private education loan borrowers to contact their private education loan lender(s)
to review the terms of their loans. Some key areas of discussion are as follows:

   •   Updating borrower contact information
   •   Confirmation of date of graduation
   •   Principal and interest outstanding
   •   Interest capitalization policy/when interest is due to capitalize
   •   Length of Grace Period and Repayment Period
   •   Repayment schedule options
   •   Current interest rate and how rate is determined (if you have multiple loans through the same lender
       ask if the rates are all the same)
   •   Deferment options
   •   Forbearance
   •   Billing and payment information
   •   Electronic access to borrower account information
   •   Borrower benefits offered by lender
   •   Co-signer information/co-signer release option
   •   Death and disability policy

Private education loans can’t be included in any type of federal loan consolidation program. There are
private education loan consolidation programs but the Financial Aid Office wouldn’t normally recommend
them and, because of the current credit market situation, very few lenders may provide them.

Many students borrow residency, relocation and board examination loans. Oftentimes, the terms of these
loans mirror the lenders’ traditional private education loan products. These loans are not certified by the
Financial Aid Office nor are we notified of a student receiving these loans. As a result, these loans are not
included in student exit counseling debt summary information. Borrowers of these loans are urged to
contact their lenders directly regarding the terms of these loans.
33
                                                                                                            34
                                     Loan Consolidation Programs

Federal Loan Consolidation Programs

Federal Loan Consolidation allows a borrower to consolidate their federal loans into one loan. The
borrower can select which federal student loans they wish to include in a consolidation loan. Federal loans
eligible for consolidation are as follows:

   •   Federal Perkins Loan
   •   Health Professions Student Loan (HPSL)
   •   Loans for Disadvantaged Students (LDS)
   •   Federal Subsidized Stafford Loan
   •   Federal Unsubsidized Stafford Loan
   •   William D. Ford Direct Subsidized Loan
   •   William D. Ford Direct Unsubsidized Loan
   •   Grad PLUS

Although it may be very convenient to collapse all of your student loans into a single loan, it might not
always be your best choice to do so. Because of the way that the interest rate on the consolidation loan is
determined, federal loan consolidation became very popular with borrowers when interest rates on student
loans were extremely low. The interest rate on a consolidation loan is determined by taking the weighted
average of the interest rates on the loans which the borrower is choosing to consolidate. Once that
weighted average was determined, the lender would round it up to the nearest 1/8th percentage point. That
rate would then become the fixed interest rate on the consolidation loan. Prior to July 1, 2006, interest
rates on Federal Stafford Loans were at a variable rate with an interest rate cap of 8.25%. When the
variable rates on the loans were historically low, it behooved the borrower to consolidate their loans to
obtain an extremely low fixed rate of interest for the life of their consolidation loan (maximum 30 years
depending on how much the borrower is consolidating). Stafford Loans borrowed after July 1, 2006 have a
fixed interest rate of 6.8%. Therefore, it became less favorable to consolidate fixed rate Federal Stafford
Loans.

There may be reasons as to why a borrower may find federal loan consolidation advantageous if they
currently have VARIABLE rate Stafford Loans outstanding. Remember that variable rate Stafford Loans
are re-set every July 1st (and have a cap of 8.25%). Borrowers who are interested in consolidating variable
rate Stafford Loans into a fixed rate consolidation loan may want to pay attention to potential fluctuations
in the interest rates so as to determine when they may receive the “best rate” on their consolidation loan.

Loan consolidation may be an option for those that feel they may best manage student loan repayment
having as few loan servicers as possible. Many students in the Class of 2009 will have at least 2 loan
servicers if not 3 or 4. Managing bills from each one of these may be a challenge to some. Loan
consolidation helps to resolve this issue at least in part as their may be loans a borrower wishes to not
consolidate or certain loans can’t be consolidated.

Students interested in Federal Loan Consolidation should be aware that ONLY federal student loans can be
included in a Federal Consolidation Loan. You are unable to include private education loans (such as
Access Loan, MEFA, Signature or Tufts Loans). Remember you can select which loans you wish to
consolidate thus if you wish to ONLY consolidate your VARIABLE rate Stafford Loans or just your
GRAD Plus Loans, you can do so. You may want to be very cautious because Federal Consolidation
Loans will often carry different deferment benefits than the original loans (such as HPSL or LDS) therefore
                                                                                                          35
you’ll lose those original deferment benefits. Also realize that the borrower benefits received on the
original Stafford and/or Grad PLUS loans will often not apply to the Federal Consolidation Loan. If
consolidating Perkins, HPSL or LDS, you may lose interest subsidy on these loans if you place the
consolidation loan into deferment.

As mentioned previously in this manual, the credit market crisis has prevented FFELP student loan lenders
from making new consolidation loans to students. However, if borrowers who want to consolidate yet
can’t find a lender, they can consolidate their loans with the US. Dept. of Education’s Federal Direct
Consolidation Loan program. Their program is essentially the same or similar as any FFELP lender’s
program. Also, for those who are considering a career in public health or public service may qualify for the
Public Service Loan Forgiveness Program if they have loans under the Federal Direct Loan program (see
page 22).

Students looking for repayment relief (lower monthly payments) on their student loans yet not wanting to
consolidate may want to consider adjusting their repayment schedules to extended repayment schedules for
Federal Stafford and Grad PLUS loans instead of consolidating. Recall that if you have total FFELP debt
in excess of $30,000, you can receive a 25-year repayment schedule. The borrower benefits originally
applicable to your loans will often still apply with an extended repayment schedule.

Early Repayment Consolidation Loans

During the 2004-05 and 2005-06 academic years, Federal Stafford Loan borrowers were allowed to apply
for a Federal Consolidation Loan while they were enrolled in school if they chose to forfeit their 6-month
grace period. For those students that did this, they were able to obtain an extremely low fixed rate on
federal loans borrowed up to that point. The downside to this is, since the grace period was forfeited, the
Early Repayment Consolidation Loan will enter IMMEDIATE repayment after graduation, withdrawal or
when the borrower ceases to be enrolled at least half-time. The opportunity to do an Early Repayment
Consolidation Loan ended June 30, 2006. If you’re unsure whether or not you did an Early Repayment
Consolidation Loan, check with your Stafford loan servicer. Your Summary of Indebtedness (received
during your exit interview with the Financial Aid Office) will also note any Consolidation Loans.
Borrowers can also access National Student Loan Data System at www.NSLDS.ed.gov, which tracks all
FFELP (Federal Stafford, Federal Direct, Federal Perkins and Grad PLUS) loans received by the borrower.

If you do have an Early Repayment Consolidation Loan, realize that your first payment may be due as early
as June 2009! If you are still enrolled in school and not considered to have completed your academic
requirements, you will need to contact your loan servicer to request an in-school deferment form. If you
have completed your requirements yet you are unable to make payments, consider applying for Economic
Hardship Deferment or Forbearance (in that order). Incidentally, this also applies to Grad PLUS loans
which don’t have a grace period!

Private Loan Consolidation

Students that have borrowed private education loan loans often ask if they can consolidate their private
loans. The Financial Aid Office would discourage a borrower from doing this unless the private
consolidation program offers better terms than your existing private education loans. If all of your private
education loans are from one lender, your loan servicer will most likely only send you one bill per month
and expect to receive one payment for all of the loans. Electronic (ACH) payments can also be established
between you and your loan servicer in the event that you have borrowed multiple loans from different
lenders. Again, unless there’s a real compelling reason why a borrower may need to consolidate their
private education loans, it’s usually discouraged.
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Internet Tools

The internet is a tremendous resource for information for student loan borrowers. We encourage borrowers
to access their student loan account information via their loan servicer’s website by obtaining a
password/user ID with their loan servicers. This will allow you to review your account information, obtain
deferment forms and apply for forbearance as well as other useful tools such as online calculators. In
addition, loan servicers provide financial management information, debt management tips, information on
credit history and how to prevent identity theft. Your loan servicer’s contact information, including their
website address, is included in your student loan counseling exit packet. Other websites borrowers might
find helpful are as follows:

       •   Federal Direct Loan Servicer (for those interested in Federal Direct Loan Consolidation or
           have previously borrowed Federal Direct Loans while attending college or dental school):
           www.dlssonline.com
       •   FinAid! (includes general information on financial aid, student loans and various online
           calculator tools): www.finaid.org
       •   IBR Info (provides information on the new Income-based Repayment Schedule and Public
           Service Loan Forgiveness program including loan repayment calculators): www.IBRinfo.org
       •   *The National Student Loan Data System – NSLDS (tracks FFELP borrowing history for each
           borrower. History includes information on Federal Perkins Loan, Federal Stafford, Federal
           Direct Loans, Federal Consolidation and Grad PLUS. For those who borrowed loans in
           college yet forget who the loan servicer is, contact information can be found on NSLDS’
           website. It also provides outstanding principal and interest balances on Grad PLUS, Federal
           Consolidation and Stafford Loans. Access requires using your FAFSA on the Web PIN, but you
           can request your PIN if you’ve forgotten it.): www.nslds.ed.gov

*NOTE: NSLDS does NOT track HPSL, LDS, Tufts Loan or any other private education loan or private
consolidation loan. If you are interested in loan consolidation, your lender will utilize your NSLDS
information to pre-populate your consolidation loan application but if adding loans such as HPSL and LDS
to the consolidation loan will require you to manually update the consolidation loan to include those loans.
                                                                                                             37
                             Planning a Student Loan Repayment Strategy

With all the options available to them, it is understandable how borrowers can be challenged in setting up a
plan to effectively manage their student loan debt. The good news is that you have a lot of options
available to you, but the bad news is that you need to take the time to figure it out. It is important for your
overall financial health to have a plan of action to manage your student loan debt. Realize that, as time
goes on, you may need to modify your plan to incorporate life changes.

The Financial Aid Office can provide some guidance but we can’t tell you what to do. Each borrower has
individual financial circumstances and only you know what those are. The most that we’re able to provide
is some “food for thought”. The following provides some points for consideration when determining a plan
that best suits your needs in light of your career path and goals:

       First and foremost, you need to decide what you can or cannot afford, and be very honest with
       yourself. Unfortunately, many of the decisions you will need to make regarding consolidation or
       various repayment schedules initially might be done when you have limited knowledge of your
       income and expenses. The best approach under such circumstances is to be very conservative
       trying to reduce your monthly payments as much as possible while not really focusing on how
       much principal and interest you’d have paid when you make your last student loan payment. But, if
       you know that your living costs will be very low because you’re moving back home to live with
       your parents or you are part of a two-income household, your focus will shift from the importance
       of having the lowest monthly payment to having cost-savings as the most important feature. Even
       if you have some flexibility, keep in mind that life changes do occur. In other words, you’ll
       probably want to eventually buy a home, invest in a practice, save for retirement and maybe even
       start a family. So you’ll probably need to strike some happy medium between building in some
       flexibility for low payments at the start of your career where your income is at its lowest point, and
       using some of your discretionary income to pay off your loans sooner than required when your
       income begins to grow.

       Place your loans in a hierarchy of most favorable to least favorable. Doing so will help you set
       your goals for making overpayments on unfavorable loans while on more favorable loans you make
       the minimum payments. Variable rate loans such as most private education loans are considered
       your least favorable loans because they don’t have an interest rate cap and their rates change usually
       every 3 months. The variable rate loans with an interest rate cap are better than private education
       loans with no cap. Do whatever you can to pay private education loans off sooner rather than later.
       Fixed rate loans are more favorable than variable rate loans and those fixed rate loans that were
       interest-free while you were enrolled in school are also good.

       Borrower benefits that are provided on your loans can result in significant savings for you. You
       should know what those benefits are and what criteria you need to meet in order to obtain them.

       Try to determine a realistic timeframe in which you can repay your student loans. This is hard to do
       and realize that you might have student loan debt equal to most home mortgages which can range
       from 15-30 years (and you still will have monthly rent or mortgage to pay AFTER you’ve made
       your student loan payments). Consider any financial help you might receive from your family. If
       you are part of a two-income household, you may be able to repay your loans sooner.

       Whether or not you include HPSL, LDS or Perkins Loan in a consolidation loan will be determined
       by how adding those loans affect the interest rate of the consolidation loan. In addition, if you add
                                                                                                  38
them to a consolidation loan, remember that you will lose interest subsidy if you place your
consolidation loan into deferment.

If you are not including HPSL, LDS or Perkins in a consolidation loan, should you be considering
graduated repayment schedules for those loans? Remember, they have a low fixed interest rate of
5%. You might take advantage of making minimal payments on those loans and use the money
“saved” (the difference between the graduated and fixed monthly payments) to pay off a higher rate
loan such as a private education loan like DEAL or Access?

Tufts Loans borrowed prior to July 1, 2007 can’t be deferred as other loans can be for post-graduate
programs. If you seek forbearance due to financial hardship, the Student Loan Office may have you
at least keep interest payments current. This is, more or less, the same as selecting a graduated
repayment schedule (provided you were eligible for that choice). It might be easier to just call the
Student Loan Office to request a change in repayment schedules than having to submit
documentation to them regarding financial hardship.
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                             Helpful Hints for Loan Deferment Processes

Federal Stafford Loans and Federal Perkins Loans

We have provided you with copies of Stafford Loan In-School and Federal Education-Related Deferment
Forms in the Appendix of this manual, as well as Economic Hardship Deferment Form and the worksheets
that will help you in determining if you’re eligible for an Economic Hardship Deferment. Your loan
servicers are available to help you with these issues as well and will provide these forms for your use.
These forms are used universally by loan servicers yet you need to carefully review each form to be sure
you are using the correct one. Since the Economic Hardship Deferment Request can be quite confusing,
we suggest you contact your loan servicer for assistance. Recall that if you are requesting forbearance, you
must call your servicer/lender. They provide instruction and will send you the proper form. Also, use your
loan servicer’s website as a resource for information. You will most likely have the opportunity to access
your loan accounts online and you may see that you’re able to download forms and/or apply for
forbearance online provided you are set up with security access codes.

National Student Loan Clearinghouse

If you are returning to school or participating in a GPR or AEGD where you are considered as at least a
half time student, you should also verify with your loan servicer whether or not an In-School Deferment
Form (paper version) is required. Many of the major loan servicers utilize the National Student Loan
Clearinghouse to update borrower accounts automatically. All institutions of higher education must report
enrollment status, expected graduation date and any subsequent changes to the clearinghouse. Oftentimes,
during the traditional school year (September through May), schools will report this information monthly.
If your loan servicer utilizes the National Student Loan Clearinghouse to update changes in enrollment
status it is not necessary that your school (Tufts Dental School or any other school) complete the paper In-
School Deferment Form since they will report you are enrolled at that institution electronically via
clearinghouse. If you are beginning in-school student status during the summer months, you may need to
have your school’s Registrar’s Office complete a paper In-School Deferment Form until such time the
school reports your enrollment to the clearinghouse electronically. Note that SallieMae, University
Accounting Services LLC and National Education Servicing obtain enrollment data on their borrowers
through the National Student Loan Clearinghouse. When in doubt, you can always file a paper deferment
form, especially since it may take a while before enrollment status is reported via the Clearinghouse and
payments might become due before such information is reported.

Private Education Loans

If you are returning to school and have borrowed private education loans, more than likely it will be
necessary to complete a paper deferment form or submit documentation to your private education loan
servicer indicating your enrollment status and expected graduation date. Although private education loan
servicers have access to clearinghouse information, they will often not utilize this information unless they
are also servicing your federal loans (i.e. Stafford, Grad Plus or Federal Consolidation Loan). Contact your
private education loan lender/servicer for information on deferment provisions. Recognize that some
private education loans cannot be deferred for in-school student status or internship/residency yet
borrowers can utilize their grace periods and request forbearance for these loans if necessary. You can
discuss your options with your loan servicer(s).
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Other Deferment Benefits

We recommend that you review your promissory notes and/or the information available to you in this
manual for information on all deferment benefits. During the process of student loan exit counseling we
tend to focus on those deferment benefits that are applicable to the dentistry profession. These deferments
more or less involve the borrower entering post-graduate training such as continuing in school for a post-
graduate certificate or fellowship, GPR or AEGD program or active duty military. However, based on
individual circumstances, you may qualify for other deferment benefits which are not necessary addressed
during the exit interview process. Your loan servicers will be able to help you establish whether or not
you’re eligible for deferment based on when you borrowed certain loans. Remember, your loan servicers
are available to assist you in managing loan repayment providing you with available options for deferment
or forbearance.

Federal Student Aid Ombudsman Office

If you find you have issues with student loan repayment and are unable to rectify these issues between
yourself and your lenders, you do have the right to contact the Federal Student Aid Ombudsman Office at
the U.S. Department of Education to request assistance. Their contact information is noted below:

FSA Ombudsman Office
830 First Street, NE
4th Floor
Washington, DC 20202
Phone: (877) 557-2575
Fax: (202) 275-0549
http://fsahelp.ed.gov
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Tufts University’s Loan Repayment Assistance Program (LRAP)


The Tufts Loan Repayment Assistance Program (LRAP) is a university-wide program, launched in 2008,
that helps selected Tufts graduates working in public service pay a portion of their annual education loan
bills. Believed to be the first university-wide program of this kind in the country, the purpose of the Tufts
Loan Repayment Assistance Program (LRAP) is to encourage and enable Tufts graduates to pursue careers
in public service by reducing the extent to which their educational debt is a barrier to working in
comparatively low-salaried jobs in the non-profit and public sectors.

All Tufts graduates (with undergraduate, graduate and professional degrees; does not include certificate
programs) with educational loans incurred for the purpose of attending Tufts (as certified by the Financial
Aid Office at Tufts) and who are employed by a non-profit (501c3 or equivalent) or public sector agency
are eligible to apply. Applicants must be currently repaying educational loans (or be in a grace period).
Applicants who have deferred payment (in order to resume academic studies, for example), who have
defaulted on their loans, or are delinquent on their loan payment are not eligible for the program.

Awards will be made by a committee in each Tufts school. The committee will consider each applicant’s
income, level of indebtedness, and overall need as compared to the entire applicant pool. Applicants may
reapply each year. However, not every applicant will receive an award. Moreover, receiving an award in
one year does not guarantee receipt of an award in subsequent years.

The Tufts LRAP is structured so that the awards should not be taxable, pursuant to special federal income
tax rules that apply to the discharge of student loan debt (26 U.S.C. § 108(f)). In accordance with this
provision, Tufts LRAP awards are made in the form of loans which are forgiven when the award recipient
completes a year of continued public service employment. Applicants should consult a tax advisor with
specific tax-related inquiries.

Additional information and application information can be found at lrap.tufts.edu. Applications for the
2009 award cycle will be made available during Spring 2009. The application deadline for the 2009 award
cycle is September 1, 2009.
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                                              APPENDIX
The following pages include deferment forms that can be photocopied for borrower’s use in applying for
deferment with their Federal Stafford and Grad PLUS loan servicers. Borrowers, however, are strongly
encouraged to obtain deferment form copies directly from their loan servicers. Many of these forms can be
downloaded from your loan servicer’s website. Doing so will help ensure the borrower is using the correct
type of deferment form for their purposes and that the form itself has not expired. Note that many of the
forms included are set to expire on January 31, 2009. Although the federal government often extends the
“life” of these forms until such time a new one is made available, it is always best to check with your loan
servicer to make sure these particular forms are still in use.

Deferment Forms:

   •   IN-SCHOOL DEFERMENT FORM
   •   MILITARY DEFERMENT FORM (Form specifies for loans disbursed after 7/1/2001 but recent legislative
       changes have been made so that the deferment is applicable to all Federal Perkins, Stafford, Grad PLUS
       Loans and Federal Consolidation Loans – including those made under the Federal Direct Loan Program -
       regardless of date disbursed).
   •   ECONOMIC HARDSHIP DEFERMENT FORM/WORKSHEETS (EHD criteria is set to change 7/1/2009;
       Your loan servicer may allow you to receive an EHD under the old provisions - which pertain to this
       particular form/worksheet - if applying prior to 7/1/09. If not, your loan servicer will request necessary
       documentation from you in order to determine if you qualify for EHD under the new provisions in effect on
       7/1/2009.)
   •   INCOME-BASED REPAYMENT/PUBLIC SERVICE LOAN FORGIVENESS BROCHURE
   •   INCOME-BASED REPAYMENT WORKSHEET – 2008

Repayment Tables:
   •   LOAN FACTOR TABLE
   •   ACCRUED INTEREST TABLE
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                                     LOAN FACTOR TABLE


The Interest Conversion Factor Table is extremely useful in determining Monthly payments of your
Federal Stafford (6.8%), Grad PLUS (8.5%), PERKINS (5%), HPSL/LDS (5%), and TUFTS LOANS (7%
or 8%).



                           INTEREST CONVERSION FACTOR TABLE
                              120-month payout of principal & interest


Interest            Payment/Month                     Interest                Payment/Month
 Rate                per $1000                        Rate                    per $1000

2.0                $    9.201                          8.0                    $   12.133
2.5                     9.427                          8.5                        12.400
3.0                     9.656                          9.0                        12.668
3.5                     9.889                          9.5                        13.215
4.0                    10.125                         10.0                        13.494
4.5                    10.364                         10.5                        13.775
5.0                    10.607                         11.5                        14.117
5.5                    10.853                         12.0                        14.347
6.0                    11.102                         12.5                        14.638
6.5                    11.335                         13.0                        14.931
7.0                    11.611                         13.5                        15.227
7.5                    11.870                         14.0                        15.527




To calculate monthly loan repayment amounts for a loan with a 10 year repayment period, use the
following system: For a loan principal of $10,500 at 9% interest, move the decimal point in the loan
amount 3 places to the left to adjust for thousands. Thus, $10,500 becomes 10.5, Find 9.0 in the
Payment/Monthly column, multiply 10.5 x 12.688, the resulting number is the amount to be paid for 120
months.
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                                    ACCRUED INTEREST TABLE

The purpose of this chart is to help you estimate the amount of interest that would accrue on your loan
every month so that you can estimate how much would be added to your loan’s principal if you and your
lender agree to capitalize interest.

                                              Approximate
                                         Monthly Accrued Interest
                                           If Interest Rate Is:

         Principal     6.0%         7.0%         8.0%        9.0%         10.0%         11.0%

         $ 500         $2.50       $2.92         $3.33        $3.75        $4.17         $4.58
          1,000         5.00        5.83          6.67         7.50         8.33          9.17
          1,500         7.50        8.75         10.00        11.25        12.50         13.75
          2,000        10.00       11.67         13.33        15.00        16.67         18.33
          2,500        12.50       14.58         16.67        18.75        20.83         22.92
          3,000        15.00       17.50         20.00        22.50        25.00         27.50
          3,500        17.50       20.42         23.33        26.25        29.17         32.08
          4,000        20.00       23.33         26.67        30.00        33.33         36.67
          4,500        22.50       26.25         30.00        33.75        37.50         41.25
          5,000        25.00       29.17         33.33        37.50        41.67         45.83
          5,500        27.50       32.08         36.67        41.25        45.83         50.42
          6,000        30.00       35.00         40.00        45.00        50.00         55.00
          6,500        32.50       37.92         43.33        48.75        54.17         59.58
          7,000        35.00       40.83         46.67        52.50        58.33         64.17
          7,500        37.50       43.75         50.00        56.25        62.50         68.75

The advantage of capitalizing interest is that you would not be required to make interest payments during
any in-school, grace or deferment period. The disadvantage would be that you would pay more in interest
charges over the life of your loan because your interest charges will be added to your principal balance.
Your monthly repayment amount will be higher if you choose to capitalize.

For example, if you owe $500 in principal at an interest rate of 6.0 percent, then approximately $2.50 in
interest would accrue on your loan every month. If you and your lender agree to capitalization on a
quarterly basis (every three months), approximately $7.50 would be added to your $500 principal balance.
As a result, at the end of one quarter you would owe, and interest would accrue on, $507.50 in principal.

Or, if you owe $4,000 in principal at an interest rate of 11.0 percent, then approximately $36.37 in interest
would accrue on your loan every month. If you and your lender had agreed to capitalize interest on a
quarterly basis (every three months), approximately $110.01 would be added to your $4000 principal
balance. As a result, at the end of one quarter, you would owe, and interest would accrue on $4,110.01 in
principal.

Contact your lender if you have questions or need more information.