Office of Student Financial Aid

OFFICE OF STUDENT FINANCIAL AID

MED SCHOOL LOAN REPAYMENTAMY WHITFORD, FINANCIAL AID COUNSELOR, 608-262-3060, FINAID@FINAID.WISC.EDU

SANDI NOWAKOWSKI, FEDERAL DIRECT & PRIVATE LOAN MANAGER, 608-262-4987, DIRECTLOANS@FINAID.WISC.EDU

BUILDING YOUR REPAYMENT STRATEGYIdentify Your Loan Debt

• Loan Types

• Evaluate my debt amounts, interest, and servicers

How do I repay?

• Consolidation (www.studentloans.gov)

• Repayment Plans

• Forgiveness

What if I need help?

• Forbearance & Income-Based Repayment

• Deferment

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

IDENTIFY YOUR LOAN DEBT - LOAN TYPES

Federal Family Education Loan Program (FFELP)

• Stafford Subsidized Loan

• Stafford Unsubsidized Loan

• FFEL Consolidation Loan

William D. Ford Direct Lending (DL)• Federal Direct Stafford Subsidized Loan

• Federal Direct Stafford Unsubsidized Loan

• Direct Subsidized Consolidated Loan

• Direct Unsubsidized Consolidation Loan

• Perkins Loan

• Grad PLUS Loan (FFEL or DL)

• Institutional Loans

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

FEDERAL SUBSIDIZED AND UNSUBSIDIZED LOANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Federal Family Education Loan Program (FFELP)• Chose a lender, payments go to servicer.

• No new loans originated after 2010.

• Subsidized Stafford Loan

• Didn’t accrue interest while you were in school.

• Fixed interest rates

• Unsubsidized Stafford Loan

• Fixed interest rate

• FFEL Consolidated Loan

• Loans paid into one consolidation loan.

• All borrower benefits adjusted.

• Interest based on consolidated average.

William D. Ford Federal Direct Subsidized and Unsubsidized Loans

• Department of Education is the lender,

payments go to servicer.

• Federal Direct Subsidized Loan

• Fixed interest did not accrue while you

were in school.

• Federal Direct Unsubsidized Loan

• Fixed interest rate

• Direct Consolidated Subsidized or Unsubsidized

Loan

• Paid into a consolidation loan

• All borrower benefits are adjusted.

• Interest rate built from a weighted

average of loans consolidated.

FEDERAL DIRECT GRADUATE PLUS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

• Payment goes to servicer.

• Interest starts accruing after disbursement.

• Repayment begins 60 after the student falls below half-time enrollment.

PERKINS LOAN

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

• 5% interest rate.

• No interest during school

• 9 month grace period

• Lender is the school, payments go to the school.

• Can be consolidated with Subsidized and Unsubsidized loans.

• Letters sent in April for mandatory exit counseling at ECSI.net

• Forgiveness available

INSTITUTIONAL LOANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Dredge Loan & Manchester Loan• No interest while in school

• 5 year grace period

• 5% interest which begins accruing after the grace period

• Letters sent in April for mandatory exit counseling at ECSI.net

Primary Care Loan• No interest while in school

• 1 year grace period but can request deferment during residency; no interest during grace or deferment

• 5% interest during repayment

• Must certify annually that you are practicing primary care until loan is paid in full

• Letters sent in April for mandatory exit counseling at ECSI.net

WI MEDICAL SOCIETY LOAN

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

WI Medical Society Loan

• 6.8%

• No interest accrual while in school

• 2 month grace period

• Interest starts accruing after the grace period.

• Forbearance can be requested with WMS.

• Exit Counseling included in packet.

HOW DO I REPAY?

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

1. Determine when your grace periods end for each loan.

• Sub & Unsub - 6 months.

• Perkins - 9 months

• PPLUS has no grace period

• Manchester & Dredge – 5 yrs.

• WMS – 2 months

2. Do you need to consolidate?• Done with school?

• Split servicer?• Mixture of FFEL & DL if I’m entering

PSLF?

3. Complete Stafford Exit Counseling at nslds.ed.gov

• Get a good idea of repayment plans that fit your borrower profile.

4. Complete Institutional and Perkins Loan Exit

Counseling at ECSI.net

5. Create an action plan & payment priority.• How long will it take you to repay and

what are your career/life goals?

• What is the most expensive loan you owe and how quickly can it be paid?

• Graduate School Plans? Be aware about the elimination of graduate professional subsidy.

6. Setup your payment plan(s) and auto-debiting (.25% interest reduction).

• Repayment plan and Auto-debit can be setup on the servicer’s website or over the phone.

EVALUATE YOUR FEDERAL LOANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

• Log onto nslds.ed.gov – National Student Loan Data System (NSLDS)

• Identify your Campus-based and private loan debt on your free credit report.

• Lenders

• Amounts

• Interest rate

LOAN FORGIVENESS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Public Service Forgiveness

• Work full-time for 10 years

• state, federal, or non-profit

• 120 monthly consecutive on-time payments

• IBR, ICR, Standard repayment plan

Non-Profit Agency Search Engines

• http://www2.guidestar.org/Home.aspx

• http://www.ahadataviewer.com/#

PERKINS LOAN FORGIVENESS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

ECSI.net http://www.ecsi.net/bwr/forms/r7-index.html

Application for Partial Loan Forgiveness

• Peace Corp or Vista Volunteer

• Criminal Justice System

• Nurse or Medical Technician

• Providing a public or non-profit service to high-risk children

• Provider of early intervention services

• Employed Firefighter

CONSOLIDATION

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Consolidation Criteria• Done attending school

• At least 2 outstanding federal loans

• Grace period has ended

• Private loans can’t be consolidated

• Mixture of FFEL & DL loans

• Multiple servicers

• DL Split Servicer Initiative

CONSOLIDATION

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Complete consolidation at www.loanconsolidation.ed.gov

Application Process• Application & MPN required

• 3 month processing time

• *Report loan type (FFEL or DL) on the application

• *Report principle + outstanding interest = total loan amount on the application

• *DO NOT forget a loan when reporting on the application

• Setup interim consolidation processing repayment plan

Consolidation Outcome• Weighted average determines interest rate of DL Consolidation loan.

• Creates a new DL Sub Consolidation Loan or DL Unsub Consolidation Loan.

• One loan, one servicer, access to DL borrower benefits.

REPAYMENT PLANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

REPAYMENT PLANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

REPAYMENT PLANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

REPAYMENT PLANS

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

MARRIED STUDENTS & IBR

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

• Married Filing Taxes Jointly –

• Only one spouse has educational loan debt - both

spouses’ income and only your debt is considered.

• Both spouses have educational loan debt – both

spouses’ income and both spouses’ educational debt is

considered.

• Can’t deduct loan interest payments in taxes.

• Married Filing Taxes Separately –

• Only your income and debt is considered.

• Consult a tax advisor regarding the benefits of filing

jointly or separately with regards to your tax refund.

ESTIMATED TIME OF REPAYMENT

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

AAMC Example

• Income-Based Repayment Plan –

Principal Debt amount $140,000

• During 4 years of residency with a median

stipend - loan payment of $420-$540 per

month.

• Increase in salary after 4 year residency -

$200,000 starting salary

• Family size of 1

• Payment amount of $1,838 for 11.8 years to

pay loan off in full.

WHAT IF I NEED HELP?

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Environment of support

• Stay in contact with your servicer.

• Repayment plans are fluid.

• Contact our office if you need advice.

Partial Financial Hardship Deferment

• Reduction in income

• Contact servicer

• Billing postponed

• Interest frozen on Sub and Perkins

• Use really sparingly…Interest capitalizes when deferment ends

WHAT IF I NEED HELP?

FEDERAL DIRECT & PRIVATE LOANS , OFFICE OF STUDENT FINANCIAL AIDIndividual Repayment Counseling offered by appointment (phone or in-person)608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Income-Based Repayment Plan• Lowest monthly payment required can be zero.• Forbearance and deferment capitalizes interest • Best to make some payment rather than no

payment at all

Forbearance• USE SPARINGLY! Interest still accrues and

capitalization occurs!• Contact servicer for billing to be postponed

• Example: $150,000 of student loans placed in forbearance for 4 years

• ADDITIONAL interest of $56,343• Monthly payment after forbearance would

increase from $1,726 to $2,195 (based on 10 year repayment period & 6.8% interest rate)

OFFICE OF STUDENT FINANCIAL AID

MED SCHOOL LOAN

REPAYMENT

QUESTIONS?

AMY WHITFORD, FINANCIAL AID COUNSELOR 608-262-3060, FINAID@FINAID.WISC.EDU

SANDI NOWAKOWSKI, FEDERAL DIRECT & PRIVATE LOAN MANAGER 608-262-4987, DIRECTLOANS@FINAID.WISC.EDU