Class of 2014 Loan Repayment Information Session Presented by: Gina Soliz, Director of Financial Aid Emily Zipprich, Financial Aid Coordinator Spring 2014
What we ll cover today Summarize the types of student loans Show you how to look up your federal borrowing history and your loan servicer s contact information Examine the loan repayment plan options Review Federal Direct Loan Consolidation Explain Public Service Loan Forgiveness
Federal Educational Loan Programs Loans for Undergrads Federal Direct Subsidized Interest rates have ranged from 6.8% down to 3.4% Federal Direct Unsubsidized Interest rates fixed at 6.8% (new interest rate structure in place for new loans borrowed on or after 7/1/13) Federal Perkins Interest rate fixed at 5.0% Loans for SU Law Students Federal Direct Unsubsidized Interest rate fixed at 6.8% (loans borrowed between 7/1/06 and 6/30/13) Or, fixed at 5.41% (loans borrowed between 7/1/13 and 6/30/14) Federal Direct Graduate PLUS Interest rate fixed at 7.9% (loans borrowed between 7/1/06 and 6/30/13) Or, fixed at 6.41% (loans borrowed between 7/1/13 and 6/30/14)
Who You Will Repay Know What You Owe www.nslds.ed.gov Log on with Federal PIN Log onto NSLDS for a summary of the federal student loans you have borrowed It is likely that your loans will be serviced by one of the primary Dept. of Education loan servicers: Fed Loan Servicing (PHEAA) Great Lakes Educational Loan Services Nelnet Sallie Mae
Repayment Plan Options Repayment Plans 10 Year (Standard) 25 Year (Extended) Up to 30 Years (Consolidation) Under these plans, you pay a fixed amount each month The shorter the repayment period, the less amount of interest will be paid There is no penalty for pre-payment You will be placed in the 10 year plan automatically, but may choose a different plan Log onto www.studentloans.gov to use the Repayment Estimator to compare plans
Income Driven Repayment Plan Options Income Driven Repayment Plans Income Based Repayment (IBR) Pay As You Earn (PAYE) Could be a good option if you have relatively high debt and relatively low income Amount due is recalculated annually, based on your household s discretionary income Be aware that the monthly amount paid may be less than the amount of interest that accrues
Income Driven Repayment Plans IBR All Federal student loans are eligible FFEL and DL (except Parent PLUS loans) Payment based on 15% of discretionary income Loan forgiveness after 25 years of qualifying payments PAYE Only Federal DIRECT (DL) student loans are eligible (except Parent PLUS loans) You must be a new borrower as of 10/1/07 & you must have received a disbursement on or after 10/1/11 Payment based on 10% of discretionary income Loan forgiveness after 20 years of qualifying payments
Income Driven Repayment (IBR & PAYE) Advantages Keeps monthly student loan payments affordable Usually has lowest monthly payment Loan forgiveness after 20 or 25 years of qualifying payments 10 year public service loan forgiveness Disadvantages You may pay more interest You must submit annual documentation Married couples may need to file tax returns with IRS separately You may have to pay taxes on the amount forgiven after 20 or 25 years
Sample Law School Loan Balance When Entering Repayment= $129,000 $61,500 Unsubsidized, $67,500 Grad PLUS Interest paid while in-school Projected Monthly Payment Projected # of Payments Projected Total Amt Paid Standard 10 Year Extended 25 Year Consolidation 30 Year IBR (household size = 1, hh AGI = $50,000) PAYE (household size = 1, hh AGI = $50,000) $1,492 120 $178,975 $912 300 $273,524 $858 360 $308,966 $410 300??? $273 240???
When Does Repayment Begin? Six Month Grace Period No Grace Period Federal Loans borrowed while at SU Law Federal loans that were in repayment prior to law school Federal Loans that were not in repayment before law school Federal Consolidation Loans Borrowers can repay while in-school or Six Month Grace Period: Law school loans Prior loans if they never entered into a prior repayment status No additional grace period if the 6-month grace has already been used
Deferment & Forbearance Deferment Most are not automatic submit request to your servicer Some limitations on length of time Forbearance Mandatory (if you meet eligibility, it will be granted) Discretionary (up to your lender or servicer) Deferments & Forbearances may temporarily lower or postpone monthly payments Deferment Examples: in-school, active duty military, economic hardship, unemployment Forbearance Examples: loan debt burden & AmeriCorps (mandatory); illness & financial hardship (discretionary) You must apply through your servicer
Federal Direct Consolidation Do you have multiple servicers? Loan Do you have both FFEL and DL? Do you want a 30 year term? Federal Direct Consolidation combines multiple federal student loans into one new loan with a fixed interest rate Not available for private student loans. Convenient to make a single payment to one servicer Must have DL (not FFEL) to qualify for Public Service Loan Forgiveness No penalty for early payment of consolidation loan
Public Service Loan Forgiveness PSLF Qualifying Loans: DL Qualifying Payments: PAYE or IBR Qualifying Employment: Public Service Federal Direct Loans (including consolidation loans) may be forgiven Must make120 payments in a qualifying repayment plan (IBR, PAYE, ICR, Standard 10 year) Available to employees who work full-time with a government agency, not-for-profit, or public interest law (including prosecution or public defense or legal advocacy in low-income communities), for example
You re Graduating! What next? Mandatory Federal Loan Exit Counseling A link will be added to your Financial Aid To Do List on MySlice later this spring Make a one-on-one Loan Repayment Counseling Appointment with the SU Law Financial Aid Office Give your loan servicer updates when your address and phone numbers change after graduation
Loan Repayment Strategy Know how much is owed and to whom Understand terms & conditions of your loans Define your financial goals Develop an affordable budget Select a repayment plan Be aware of loan forgiveness programs Keep good financial records
Websites Log onto www.nslds.ed.gov for a detailed summary of your federal student loans Log onto www.studentloans.gov to apply for a Federal Direct Consolidation Loan or to use the federal student loan Repayment Estimator Read more on the Federal Student Aid website www.studentaid.ed.gov
Questions? Contact the College of Law Office of Financial Aid at financialaid@law.syr.edu or call 315.443.1963 Check out the Loan Repayment section of our website www.law.syr.edu/fa