Loan Repayment Keirsten Connors, Loan Office Manager
Today s Topics Your Loans & Servicers Find your loans Where & when to repay Your Options Repayment Plans Postpone Repayment Cancellation & Forgiveness Consolidation Make a Plan Know your finances Match loan options to financial goals Tips & Resources
Your Loans & Servicers Find your loans Federal Loans During exit counseling StudentAid.gov (MyFederalStudentAid) NSLDS Loans borrowed @ Brown Banner Self Service Private Loans Credit Report
Your Servicers Where to repay Stafford & PLUS Many different federal servicers Find yours @ StudentAid.gov or during online exit counseling Will send you account info by mail & email Keep your contact info current Servicers offer online account access Call them with questions
Your Servicers StudentAid.gov
Where to repay Perkins & Institutional Loans Your Loans & Servicers Repay to Brown Univ. Loan Office (servicer) Will send you account info by mail & email Always give the Loan Office your current contact information All account questions & forms handled by Loan Office Brown Office Building (2 nd floor, above Bookstore) (401) 863-3296 or loans@brown.edu www.brown.edu/loanoffice ECSI is our vendor; they provide online system & mail statements http://borrower.ecsi.net
Your Servicers www.brown.edu/loanoffice
Your Loans & Servicers Grace Period Begins when you leave school Payments are not required, but are accepted (no pre payment penalty) Stafford, PLUS, Institutional Loans = 6 months Perkins loans = 9 months Repayment Begins Loans are repaid to a servicer Stafford & PLUS = pay federal servicer Perkins, Institutional = pay Brown Loan Office Interest Accrual Based on the unpaid principal balance Principal balance and accrued interest are tracked separately Simple Daily Interest formula Interest rate / days in year x principal balance = daily interest amount
Your Loans & Servicers Stafford & PLUS Unsubsidized & PLUS Loans: Interest began to accrue at disbursement Subsidized: Interest accrues when repayment begins Unpaid accrued interest is added to principal one time when repayment begins (capitalization) Accrued unpaid interest will be displayed during exit counseling Perkins & Institutional Interest accrues when repayment begins Any payments made before interest accrues will be fully applied toward principal
Today s Topics Your Loans & Servicers Your Options Repayment Plans Postpone Repayment Cancellation & Forgiveness Consolidation Make a Plan Tips & Resources
Repayment Plans Perkins & Institutional Loans Standard Stafford & PLUS Loans Standard Graduated Extended Pay As You Earn Income Based Income Contingent
Repayment Plans Standard Same amount each month, highest monthly payment Pro: Accrue/pay least amount of interest Con: May not be affordable Graduated Payments start out small & increase every 2 years Pro: More affordable at first Con: Accrue more interest compared to standard Extended Lengthens repayment from 10 years up to 25 years Can choose either Standard or Graduated Pro: Smaller monthly payments Con: Accrue more interest compared to standard & graduated
Repayment Plans Income Driven Plans (Pay As You Earn, Income Based, Income Contingent) Similarities Payments based on income & require annual documentation Payments calculated annually Remaining amounts forgiven after set number of years Forgiven amounts may be considered taxable income Differences Maximum payment amount Maximum length of repayment
Repayment Plans Income Driven Plans (Pay As You Earn, Income Based, Income Contingent) Pro Lowest possible monthly payment Loan forgiveness at the end of the repayment term Con In repayment for a longer period Accrue higher amount of interest over time Forgiven amount can be taxable Can be difficult to forecast since income changes
Repayment Plans Discretionary income: difference between adjusted gross income and 150% of the poverty guidelines for your family size and state of residence
Repayment Plans Compare Repayment Plans during Exit Counseling @ StudentLoans.gov
Repayment Plans Repayment Plan Calculators @ FinAid.org
Postponing Repayment View details by loan program @ StudentAid.ed.gov or Brown.edu/loans Eligibility Monthly Payment Interest Accrues Deferment Specific situations per promissory note Vary based on loan type (in-school, unemployed, residency) Postponed Only on Unsubsidized Stafford Loans Forbearance Financial difficulty Reduced On all loans & must be paid during forbearance Extends Time to Repay? Yes No payments are recalculated when forbearance ends Automatic? Mandatory? No Must contact your servicer & submit application paperwork No Can handle each loan separately; request for all, some, or none
Postpone Repayment www.brown.edu/loanoffice
Forgiveness & Cancellation Student loan debt can be discharged (cancelled) under certain specific circumstances & for certain programs: Options vary by loan type View details by loan program @ StudentAid.ed.gov Performing qualifying service Teacher Loan Forgiveness for Stafford Public Service Loan Forgiveness for Stafford, PLUS, or Consolidation Perkins Loan Cancellation For teaching, early intervention services, law enforcement or corrections officer, nurse or medical technician, or child and family service. Upon death or total and permanent disability
Public Service Loan Forgiveness If you work in public service, you may be eligible to have your federal loans discharged after 10 yrs. Eligibility Qualifying employment employed full-time for 10 yrs in public service position Qualifying payments make 120 on-time payments under PAYE, IBR, or ICR Eligible loans Direct Loans (Stafford, Grad/Professional PLUS, Consolidation) Learn more @ MyFedLoan.org/PSLF
Consolidation Combine federal loans into 1 NEW loan Perkins, Stafford, Grad PLUS, LDS Fixed Interest rate (weighted avg. of existing loans) Eligible for income driven repayment plans and/or PSLF Extends repayment Apply at StudentLoans.gov Pros Combines existing loans into 1 NEW loan with 1 Servicer Way to make Perkins eligible for income driven plans or PSLF Lower monthly payment Cons Lose borrower benefits on existing loans (Perkins teacher cancellation, etc) Can t include Private or Institutional Loans Pay more in interest over time
Today s Topics Your Loans & Servicers Your Options Make a Plan Know your finances Match loan options to financial goals Tips & Resources
Know Your Finances Know Your Finances How far will my salary go in another city? Cost of living by state@ Money.CNN.com
Know Your Finances Know Your Finances Budget helps track your income & expenses Estimate income, deductions & take home pay @ StudentLoans.gov or SurePayroll.com Cost of living by state@ Money.CNN.com
Match Options & Goals Match your loan options to your financial goals Financial Goal: Pay Off Debt Quickly/Pay Least Interest Loan Options: Choose Standard repayment plan Pre-payment: make payments when they aren t required (in-school, grace, deferment) Avoid interest capitalization, pay accrued interest on Unsubsidized & PLUS during grace Pay extra each month Pay off high interest loans first
Match Options & Goals Financial Goal: Lowest Monthly Payment Loan Options: Consolidate to combine Stafford & Perkins Allows you to repay Perkins amount using income-driven plan Choose an Income-driven repayment plan (PAYE, IBR, ICR) Apply online at StudentLoans.gov Notify your federal servicer Submit income documentation each year Review Deferment or Forbearance options (vary by loan type) Institutional or private loans (not eligible for federal consolidation or federal repayment plans)
Match Options & Goals Financial Goal: Postpone Repayment Loan Options: Deferment & forbearance options vary by loan type Return to school (must be at least ½ time enrollment) Unlimited in-school deferment If original grace period is fully used, repayment will begin immediately after enrollment ends Unemployed or under-employed Americorp has own process online
Match Options & Goals Financial Goal: Receive Public Service Loan Forgiveness Loan Options: Consolidate now Choose income-driven repayment plans Do not make extra or early payments Notify your servicer Visit MyFedLoan & begin tracking qualifying payments & employment Institutional or private loans aren t eligible
Today s Topics Understand Your Loans Understand Your Options Make a Plan Tips & Resources
Tips & Resources Having Trouble Making Payments? Consolidation can lower monthly payments Switch repayment plan Review deferment / forbearance options Contact your servicer(s) for guidance! Loan Office: loans@brown.edu or (401) 863-3296 What s the big deal? Loan status reported to credit bureaus every month Building credit history for better or worse Annualcreditreport.com Consequences of default Late fees Hold on diploma & transcripts Turned over to collection agency
Mandatory Loan Exit Counseling Must complete online between April 15 th May 4 th Incomplete = hold on diploma Tips & Resources More than one requirement! Perkins & Institutional: http://borrower.ecsi.net Stafford & Grad/Med PLUS: http://studentloans.gov
Tips & Resources To Do List Complete exit counseling (April 15 th May 4 th ) Pay attention to the estimated repayment amounts for each plan Set up online account access with your servicers Update your address, email, & phone Select a repayment plan Complete applications to postpone repayment if needed Must apply with each servicer separately Submit residency deferment and forbearance paperwork Mark calendar to submit again in 11 months
Tips & Resources Servicer Contacts Brown Univ. Loan Office: loans@brown.edu or 401-863-3296 Locate federal servicers: www.nslds.ed.gov & www.studentaid.ed.gov Loan Details Exit Counseling: http://borrower.ecsi.net & www.studentloans.gov Loan basics & DL repayment plans: www.studentaid.ed.gov & Brown.edu/loanoffice Public Service Loan Forgiveness: http://www.myfedloan.org/pslf Consolidation: www.studentloans.gov Calculators Repayment Estimator: https://studentloans.gov/mydirectloan/mobile/repayment/repaymentestimator.action Repayment plan calculators: StudentAid.ed.gov or FinAid.org Interest Capitalization Calculator: http://www.finaid.org/calculators/interestcap.phtml Pre-payment calculator: http://www.finaid.org/calculators/prepayment.phtml
Tips & Resources Personal finance topics CNN Money 101 MyFico.com Income & Expenses Estimate payroll deductions: www.surepayroll.com/calculator/calc_paycheck_netpay.asp Cost of living by state: http://money.cnn.com/calculator/pf/cost-of-living/ Credit Related Free copy of credit report: www.annualcreditreport.com Credit score: www.myfico.com Budgeting Resources Apps, Calculators & Worksheets www.xpenser.com (mobile) www.mint.com (mobile) http://www.cnbc.com/id/25933653/ YouCanDealWithIt.com MappingYourFuture.org MoneyUnder30
Questions Loan Office loans@brown.edu or (401) 863 3296