Student Loans & Service Members

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PF SMS icons PF SMS icons Student Loans & Service Members https://learn.extension.

1 PF SMS icons PF SMS icons Student Loans & Service Members This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Military 1 Family Readiness Policy, U.S. Department of Defense under Award Number

2 MFLN Intro Connecting military family service providers and Cooperative Extension professionals to research and to each other through engaging online learning opportunities militaryfamilies.extension.org Sign up for notifications at militaryfamilies.extension.org/webinars 2

3 Today s Presenters Carol Kando-Pineda Counsel in the FTC s Division of Consumer and Business Education where she leads teams to create and distribute free materials in print, through online tips and videos, and by social media to help people avoid scams, manage their money and make wise buys. Patrick Campbell Policy Analyst for the Office of Servicemember Affairs (OSA) at the (CFPB). Patrick is one of the country s leading experts on the Post-9/11 GI Bill having been a key architect of the new program in

4 Choosing a college 4

5 Military.Consumer.gov Research what you want to do for a living o Education needed? o Average salaries College Scorecard 5

6 Military.Consumer.gov Research schools o Department of Veterans Affairs GI Bill Comparison Tool Graduation rate Benefits calculator Default rate Accreditation o Will the program get you where you want to go? 6

7 Military.Consumer.gov Research schools o College Navigator Be sure you have the correct URL: For-profit or not-for-profit o Visit the school o Do they offer support to veterans? 7

8 Military.Consumer.gov Research schools o Can you get credit for your military training? o Will other college credits transfer? o What are the total costs? o Read the enrollment contract 8

9 Military.Consumer.gov Is there pressure to enroll? o That s a big warning sign o If they won t give you documents before signing, don t enroll o Can you cancel? How? 9

10 Military.Consumer.gov Signs of trouble: Student loan relief scams Warning signs: Up-front fee Promising total loan forgiveness Tell you to stop paying your student loans Beware: A Department of Education seal doesn t mean it s legit You have time to check out your options 10

11 Military.Consumer.gov Signs of trouble: College degree scams Warning signs: No Studies, No Exams, No Interaction Get a Degree for Your Experience! Flat Fee No Waiting 11

12 Military.Consumer.gov Signs of trouble: high school equivalency pitfalls o Four legitimate high school equivalency tests GED, HiSET, TASC, and CHSPE (California only) o Must be: in-person, supervised, closed-book tests, given on a specific date, show ID o Can also take certain classes for HS requirements No state accepts o An online high school equivalency test o Work experience credits only 12

13 Military.Consumer.gov Questions? 13

14 Servicemembers & Student Loans Patrick Campbell Office of Servicemember Affairs Note: This presentation is being made by a (CFPB) representative on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the CFPB. This document was used in support of a live discussion. As such, it does not necessarily express the entirety of that discussion nor the relative emphasis of topics therein.

15 Who is this guy? OIF Veteran (Combat Medic) Advocated for veterans for 5 years Now works for CFPB Office of Servicemember Affairs 15

16 What is the CFPB? Founded in response to the 2008 financial crisis Dodd-Frank Wall Street Reform and Consumer Protection Act Our purpose is to make markets for consumer financial products and services work for Americans. Ensure consumers get the information they need to make sound financial decisions. Prices are clear up front; Risks are visible; and Nothing is buried in fine print. 16

17 What is the Office of Servicemember Affairs? What we do: Educate and empower consumers Monitor complaints Coordinate on consumer protection 17

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19 Paying for College What is available from the federal government? Military Tuition Assistance GI Bill Pell grants Subsidized Federal loans Unsubsidized Federal loans Grad PLUS loans 19

20 Post-9/11 GI Bill Most generous GI Bill benefit since WWII Tuition / Fees: pays in-state tuition or $21,000+/year Living allowance: BAH for E-5 with dependents Book stipend: $1,000/year Yellow Ribbon Program Transferability 20

21 GI Bill Comparison Tool Combines different websites into a single click tool Calculates GI Bill benefits (all chapters of the GI Bill) Searches through over 16,000 approved schools Shows number of GI Bill students at that school Flags schools that warrant extra caution Displays key indicators of value Veteran outcomes Signatories to Yellow Ribbon Program, Military Tuition Assistance MOU, Principles of Excellence, 8 Keys to Veteran Success 21

22 Federal financial aid How to apply? FAFSA.gov Tips & Tricks Pell grants & the GI Bill Submit FAFSA early Take out loans last 22

23 Scholarships & grants National Resource Directory (VA website) Department of Education State and school scholarships 23

24 Advantages of federal loans Interest rates Federal government may subsidize Generally fixed rate versus variable Repayment Income-driven repayment plans available Public Service Loan Forgiveness (PSLF) Deferment / Forbearance Discharge due to death or permanent disability 24

25 Private student loans Private student loans usually Have higher costs than federal student loans Require a co-signer Have less flexible repayment options Explore all your federal loan options first 25

26 Repaying Student Debt Between 2007 and 2017, Total volume of outstanding student loan debt more than doubled, Growing from less than $600 billion to more than $1.4 trillion today Student loans debt is second only to mortgages Today, the average borrower with student loan debt owes over $30,000, an increase of 60 percent over the last eight years. At least one-in-four student loan borrowers is behind on his or her payments or in default. 26

27 Repaying Student Debt 27

28 Repaying student debt 28

29 Repaying Student Debt Student loan benefits for servicemembers 6% interest cap (SCRA) On pre-active duty service loans Federal loans SCRA benefits are now automatically applies to Federal loans At least 300,000 more military borrowers have obtained the SCRA rate cap Private loans SCRA must be requested Some private loan servicers proactively apply SCRA benefits Sometimes there mistakes (file a complaint) 29

30 Student loan benefits for servicemembers 0% interest for service in area of hostile fire Must be requested (very few ask for this benefit) Applies only to Direct Loans Perkins loans forgiveness 30

31 Student loan benefits for servicemembers Income-Driven Repayment (IDR) plans Monthly payments can be reduced based on income and family size PAYE caps monthly payments at 10% of discretionary income If income is low enough (e.g., E-1) the monthly payment could be $0/month 31

32 Student loan benefits for servicemembers Public Service Loan Forgiveness (PSLF) Active duty servicemembers (and veterans) meeting certain requirements may have the balance of their federal student loans forgiven after working in public service for ten years. 10 years of qualifying public service- military counts. 120 on-time payments Must have a qualifying loan (only Direct Loans and Direct Consolidation loans. ) Consolidating older loans may disqualify those loans for the 6% SCRA interest cap 32

33 Student loan benefits for servicemembers HEROES Act Waiver While are on active duty, ED waives many of the documentation requirements attached to federal student loan benefits. For example, if a servicemember is on an income-driven repayment plan and military service prevents them from providing updated information on family size and income, the servicemember can make a request to have the monthly payment amount maintained. 33

34 Student loan benefits for servicemembers Military deferments Allows a servicemember to delay payments during certain periods of military service. For private student loans - availability is at the discretion of the lender 34

35 Student loan benefits for servicemembers Veterans Total and Permanent Disability May qualify for discharge of student loans. VA has to determine that the servicemember is unemployable due to a service-connected disability. 35

36 Inappropriate requirements for seeking SCRA DOJ and the FDIC ordered Sallie Mae and Navient to Pay nearly $100 million To more than 77,000 servicemembers Regulators determined that the companies were: Unfairly conditioning receipt of benefits under the SCRA upon requirements not found in the law; Improperly advising servicemembers that they must be deployed to receive benefits under the SCRA; and Failing to provide complete SCRA relief to servicemembers after having been put on notice of these borrowers active-duty status 36

37 Questions & Discussion For more information, visit: Contact:

38 PF SMS icons PF SMS icons Connect with MFLN Personal Finance Online! MFLN Personal Finance MFLN Personal 38

39 MFLN Intro We invite MFLN Service Provider Partners to our private LinkedIn Group! DoD Branch Services Reserve Guard Cooperative Extension

40 Evaluation & Continuing Education Credits/ Certificate of Completion MFLN Personal Finance grants 1.5 credit hours for today s webinar for AFC-credentialed through AFCPE and CPFCcredentialed participants through FinCert. Please complete the evaluation and post-test at: Must pass post-test with an 80% or higher to receive certificate. 40

41 Personal Finance Upcoming Events Lunch & Learn: Money Apps A Review Date: May 12, 2017 Time: 12 p.m. Eastern Location: learn.extension.org/events/ Interactive Personal Finance Learning Activities Date: May 16, 2017 Time: 11 a.m. Eastern Location: learn.extension.org/events/2971 For more information on MFLN Personal Finance go to: 41

42 militaryfamilies.extension.org/webinars This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Military Family Readiness Policy, U.S. Department of Defense under Award Number

STUDENT LOAN SURVIVAL GUIDE. Navigating Student Debt from Start to Finish

STUDENT LOAN SURVIVAL GUIDE. Navigating Student Debt from Start to Finish STUDENT LOAN SURVIVAL GUIDE Navigating Student Debt from Start to Finish Washington State Office of the Attorney General Bob Ferguson January 2017 About This Guide This guide provides information to help