Congratulations Class of 2013! From: The Financial Aid Office Team

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Congratulations Class of 2013!

From: The Financial Aid Office

Team

(Atheia, Jacqui, Kristin, Melissa, Sean, Sue, Tom, Usha)

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Exit Interview Goals

BASICS Rights/responsibilities servicer requirements Verifying the accuracy of your debt

STRATEGIES Repayment Hierarchy & overall strategies What to do/when to do it Forbearance or Income Based Repayment or

something else?? Consolidation Tax Benefits Don’t Default!!

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Loans to cover

1) Institutional loans TJU loan Alumni loan Perkins loan PCL Donor named

2) Stafford3) Grad PLUS4) Private alternative loans

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What do you need to submit from the packet???

Statement of Attendance Survey – we will email you a Survey

Monkey link

NEED TO COMPLETE THE ONLINE VERSION AT WWW.NSLDS.ED.GOV

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TJU Debt Record

Includes the aid you received in each academic year

Includes any aid you may have received while enrolled at TJU

Loans reflect Principal amount only – payments & interest are not reflected

Bottom of sheet tallies your loans total principal debt by Banner code – various codes used while you have been enrolled. Don’t let this confuse you.

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Institutional & Institutionally administered Loans

Federal Perkins Loan Alumni Loan, Simpson Loan, Levi Loan, TJU Loan etc. Federal PCL and LDS

Serviced by Xerox/ACS, Inc. (800) 826-4470800) 826-4470 http://acs-education.com

Mailing of payments to:

With coupon: Without coupon:Xerox Educational Services ACS, Inc – CPS Monetary

ProcessingPO Box 3295 PO Box 7061 Milwaukee, WI 53201-3295 Utica, NY 13504-7061

All institutional loans get repaid to the University via Xerox (ACS)

Your TJU contact person:

Rebecca Reynolds1020 Walnut Street, Room 521

Philadelphia, PA 19107(215) 503-7226

[email protected]

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TJU Repayment Schedule

Lists when your payment starts What the monthly payment will be What the repayment period is What the interest rate is How much interest will accrue over

life of loan What your total loan cost will be

(interest and principal)

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Jefferson is the lender for….

Institutional loans (e.g., TJU Loans, Alumni Loans, Morgan Loan etc.)

Certain Federal Loans Federal Perkins Federal Loans for Disadvantaged

Students Federal Primary Care Loans

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Jefferson Loan Parameters

TJU Loan, Alumni Loan, Donor named loan– 12 month grace only

(note: Wayland, Robt. Wood Johnson, Sledd Cunnison loan have deferment options beyond Grace period)

10 year repayment Fixed 5% interest rate

Wayland, Kellogg, Snyder, Bacharach, and Robt Wood Johnson have reduced interest rates.

Cancelled upon Death/permanent disability

Jefferson is your lender

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Federal Perkins Loan Parameters

Federal Perkins – 9 month grace Forbearance is permitted 6 month grace before repayment begins 10 year repayment Fixed 5% interest rate Cancelled upon Death/permanent disability

Jefferson is your lender

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Federal LDS Loan Parameters

Loan for Disadvantaged Students 12 month grace Deferment is permitted for 3 yr

Residency 10 year repayment Fixed 5% interest rate Cancelled upon Death/permanent

disability

Jefferson is your lender

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Federal PCL Loan Parameters

Primary Care Loan 12 month grace Deferment is permitted for 3 yr Residency 10 year repayment (20 years max if

requested depending on loan amount) Fixed 5% interest rate Cancelled upon Death/permanent disability

Has requirement to work in Primary Care (as defined in promissory note) while loan is in repayment

Jefferson is your lender

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Federal Stafford Loan (FFELP/Direct Loan)

6 month grace period

Eligible to apply for Forbearance

Can be consolidated with Grad PLUS, Perkins, LDS

If borrowed after 7/1/06 – rate is fixed 6.8%; Rate is variable if borrowed before this date and NOT consolidated.

10 year repayment – can ask for longer repayment period

Cancelled upon Death/permanent disability

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Federal Graduate PLUS

No grace period (check with servicer- many grant auto-forbearance for 6 mths to align with Stafford)

Eligible to apply for Forbearance just like Stafford

Can be consolidated with Stafford, Perkins, and LDS

Loan is fixed 8.5%; 7.9% if borrowed from Direct Loans (2010-11 & after)

10 year repayment – can ask for longer repayment period- (see loan repayment slide)

Cancelled upon Death/permanent disability

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Private Alternative Loans

Usually 6 to 9 month grace (interim) period

Most deferred for at least 3 years during residency – read promissory note or call lender to check parameters on length of deferment and necessary documentation of internship/residency

Interest rate will change as frequent as the index used (LIBOR up to 4 times a year or whenever PRIME rate changes)

there is usually no ceiling on the interest rate.

Not cancelled upon death or permanent disability

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Finding Your Federal Loans

To access, provide:

- SS#

- Date of Birth

- First 2 letters (last name)

- PIN # (www.pin.ed.gov)

www.nslds.ed.gov

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NSLDS Lender – who lends the money Guarantor – who guarantees the funds

to the lender if you do not repay Servicer – MOST IMPORTANT – they

have processed your loan, disbursed the funds and will be collecting your payments and working with you on deferment/forbearance

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Contact all of your loan Servicers REQUIRED!

45 days before or after your last date of enrollment

Update your address Confirm when your Grace period begins and

ends and when first payment is due!!! Confirm when you should submit your

Forbearance form (for Stafford and Grad PLUS)

Confirm your repayment amount Call first - then follow up in writing if you

think this is necessary – keep copy of written letter for your file

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Forbearance

• Mandatory that servicer grant forbearance for duration of residency. Forbearance available throughout residency for Stafford, Grad PLUS and Consolidation loans

• Application required at least annually-some lenders require a form, most will take your request on phone

• Borrower MUST ask for it

• Interest accrues and may capitalize on all loans, subsidized and unsubsidized – confirm with your servicer

• Use only after you have exhausted your grace period

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Dates To Remember- What to do and when to do it!

If you have consolidated any loans, you have used the grace period and repayment will start immediately at graduation (check with servicer for exact date). Federal Grad PLUS loans have no grace period as well (check with servicer to confirm options as immediate forbearance).

If you used the full 6 month Grace period (between college and TJU, leave of absence) you do not get this again

FILE FORBEARANCE FORM (if form is necessary) 2 - 4 WEEKS BEFORE REPAYMENT DUE DATE

If no consolidation or if loan was never in repayment, 6 month grace period still exists.

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Repayment Hierarchy

Review all of your debt – include credit cards, car loans etc.

Calculate which is the most expensive using interest rate, repayment terms etc.

Start making voluntary payments to the most expensive first

Perkins/institutional loans – cheapest during 1st year while interest is subsidized

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Current Repayment Options

1. Standard (Level) Repayment

2. Extended Repayment

3. Graduated Repayment

4. Income Sensitive Repayment – FFELP only

5. Income Contingent – Direct Loans only

6. Income Based Repayment – FFELP and Direct Loans – NEW 7/1/09

7. Pay As You Earn (PAYE) – New 12/2012

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Loan Repayment Plans Standard (Level)

Level monthly payments over 10 year period Higher monthly payments

Lowest overall cost

ExtendedAvailable to new FFELP & Direct Loan borrowers*Fixed or graduated monthly paymentsRepayment term of 25 years.

*Must have an outstanding balance of more than $30,000 in Stafford Loans on or after October 7,1998

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Graduated

Payments start low, increase usually every two years

FFELP – must have more than $30,000 outstanding

DL – monthly payment calculated based on DL debt and interest rates of loans; never less than monthly interest accrual

Higher overall cost - Good for early cash flow, but remember cost!

Income Sensitive - FFELP Program Only

Payments tied to income

Finish in 10 years (may be extended to 15 years)

Income Contingent - Direct Loan Program Only

Monthly payment amount calculated based on borrower’s household income, family size, and total Direct Loan debt.

Loan Repayment Plans

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Loan Repayment Plans

Income Based Repayment (IBR)• caps loan payments at 15% of your household income that

exceeds 150% of the federal poverty guideline for your family size

• payment amount will change with increase in income• 25 years repayment period• Calculation includes ONLY Federal education loans - cannot

include Perkins or LDS unless you have had these loans included in a Federal Direct Loan consolidation

• Must provide income verification (W2s, tax returns, paycheck stub, employment contract). *DEPENDING ON SERVICER*

Any balance remaining after 25 years is forgiven but amount is considered taxable!!!

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Loan Repayment Plans

Pay As You Earn Plan – 2012

Direct Loan Program only For new borrowers only: You are a “new Borrower” “new Borrower” if you

Have no Direct or FFEL loans as of 10/1/2007

and Received a Subsidized, Unsubsidized, or Grad PLUS loan

disbursement on or after 10/1/2011, or a Direct Consolidation* loan based on an application received on or after 10/1/2011.

*Exception: You are not a new borrower for the PAYE plan if you consolidated loans that otherwise made you ineligible, i.e., loans made prior to 10/1/2007

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Loan Repayment Plans

Pay As You Earn Plan – 2012 (continued)

Modeled on IBR, incorporating statutory IBR changes scheduled to take effect for new borrowers in 2014

Under Pay As You Earn, borrowers pay the lesser of: 10% of discretionary income (income-based payments) or What they would have paid under the 10-year standard

repayment plan (non-income-based payments) Must demonstrate Partial Financial Hardship (PFH):

20 year repayment period then cancelation/forgiveness of remaining balance. Forgiven portion is taxable.

More information available at StudentAid.gov/PayAsYouEarn

Income-Based Repayment

Formula for a Partial Financial Hardship (PFH):

Standard payment* > IBR payment

More likely when income is low and debt is high Max payment in IBR is the Standard amount* 1st post-M.D. year median stipend is $48,700**

•As originally determined when calculating Partial Financial Hardship based on $185,000 entering repayment

•($162000 total education debt plus $23,000 of capitalized interest from 4-years of school and 6-months of grace).

•**Preliminary data from AAMC Survey of R/F Stipends and Benefits and AAMC Analysis

$2,130 / mo* $410 / mo

Income-Based Repayment

Benefits

1. Partial interest subsidy during the first 3 years

2. Unpaid interest does not capitalize when:

1. Annual paperwork is filed timely

2. Borrower demonstrates a PFH

3. Possible loan forgiveness

*As reported to the IRS. Annual verification required of both AGI and family size

Income-Based Repayment

To enter IBR, borrower must

• Contact each servicer individually to request • Give access to household AGI* (tax records)

• Inform servicer(s), annually, of family size

• Demonstrate a Partial Financial Hardship (PFH)

*As reported to the IRS. Annual verification is required of both AGI and family size.

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Income-Based Repayment Chart

IBR Monthly Payment Amount 2009

AnnualIncome

Family Size

1 2 3 4 5 6 7

$10,000 $0 $0 $0 $0 $0 $0 $0

$15,000 $0 $0 $0 $0 $0 $0 $0

$20,000 $47 $0 $0 $0 $0 $0 $0

$25,000 $109 $39 $0 $0 $0 $0 $0

$30,000 $172 $102 $32 $0 $0 $0 $0

$35,000 $234 $164 $94 $24 $0 $0 $0

$40,000 $297 $227 $157 $87 $16 $0 $0

$45,000 $359 $289 $219 $149 $79 $9 $0

$50,000 $422 $352 $282 $212 $141 $71 $1

$55,000 $484 $414 $344 $274 $204 $134 $64

$60,000 $547 $477 $407 $337 $266 $196 $126

$65,000 $609 $539 $469 $399 $329 $259 $189

$70,000 $672 $602 $532 $462 $391 $321 $251

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Income-Based Repayment

Determined by Calculating 15% of income that exceeds 150% of the poverty line for a borrower’s family size

SEE FAQ in PACKET or also located at www.ibrinfo.org

Online IBR Calculators

www.finaid.org

www.IBRinfo.org

www.aamc.org/FIRST

Pay Later (using Forbearance)

Pay Now (using Income-Based Repayment)

The most feasible options during residency:

Determines the payment

amount &

interest cost

Repayment Plan Comparison

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10 Year Public Service Loan Forgiveness

• Must work for a non-profit organization under section 501(c)(3) of IRS code that is exempt from taxation under section 501(a) of the IRS code – includes most not-for-profit private schools, colleges, and universities. Each of the 120 payments must have been made during a period of qualifying employment

• Must make 120 monthly payments under qualifying plan• Only available to those who have loans under the Direct

Loan Program (consolidation may be necessary)• After 120 qualifying payments, your remaining balance can

be forgiven; Payments do not need to be consecutive• Must self document• Amount forgiven is NOT taxable under PSLF

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•On January 31, 2012, the Department released a voluntary Employment Certification Form that borrowers can submit to the Department for a determination of whether their employment and payments qualify for PSLF

• Borrower has employer complete employment verification section• Borrower submits form to FedLoan Servicing (regardless of who

current servicer is)• FedLoan Servicing determines whether employment qualifies• If employment qualifies, borrower’s loans are transferred to FedLoan

Servicing, for a determination of how many qualifying payments were made during the period of employment

• Borrowers loans remain at FedLoan servicing permanently

•Borrower can submit the form as often as annually

For more, including Q&As, see StudentAid.gov/PublicService

10 Year Public Service Loan Forgiveness

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Pros and Cons of Public Service Loan Forgiveness Program

• Will federal funding be available in 10 years??

• Will you be required to make career decisions regarding where you work based on program??

• Do you have the financial ability to make loan payments as a resident when payments and income are lowest for you??

• How much federal debt will remain for forgiveness after 10 years??

• Will you have more income potential over a lifetime in the private sector than what would be forgiven in this program???

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Consolidation Fast Facts

Consolidation takes many federal loans and combines into one loan, one set of new terms, with one lender

Interest rate is determined by calculating the weighted average (+1/8 point) of all loans being consolidated – interest rate is fixed.

Have option of consolidating all federal loans or only some– or none at all

Only one agency offering Consolidation www.loanconsolidation.ed.gov

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Consolidation

When to consider consolidation:

Variable rates are low

Multiple servicers to repay

To obtain Public Service Loan Forgiveness (DL)

To make Perkins or LDS loans eligible for IBR

When to Consolidate

If you consolidate before your grace period is exhausted, you lose the remaining grace period. (Don’t consolidate in June)

Start consolidation 40-60 days prior to first payment Can be done online (debt from NSLDS is integrated) If consolidation is not complete before first payment is

due, apply for forbearance on all loans included in the consolidation so no payment is necessary (don’t make any payments after you have started the application).

Once consolidation is done, a new forbearance on the consolidated loan would need to be filed.

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You can prepay your federal student loans with no penalties.

make payments towards the highest cost unsubsidized loans that may have the most frequent capitalization.

Paying Loans Off Early

Unless otherwise noted, loan payments typically are applied first toward collection costs (attorney’s fees, etc.), then interest, and finally principal

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Loan repayment programs

Military NHSC Pennsylvania Delaware NIH Other – see AAMC resource at

http://services.aamc.org/fed_loan_pub

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Tax Benefits

Lifetime Learning Credit Deduction for student loan interest

payments Tuition and Fee

Full Deduction Partial Deduction NO Deduction

Single $60,000 or less $60,001 to $74,999

$75,000 or more

Married filing

Jointly

$120,000 or less

$120,001 to $149,999

$150,000 or more

www.irs.gov/publications/p970

The Taxpayer Relief Act of 1997Student Loan Interest

Student loan interest deduction max $2,500 per year

Voluntary payments may be eligibleCapitalized interest may be included

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Mortgages

The Financial Aid Office is not the “lender” of any of your loans. Therefore I/we cannot state anything in writing that indicates your eligibility to postpone your loans.

Feel free to take anything already in print from the packet or the book

Or contact your servicer directly. See the Common Manual handout for info

on Mandatory Forbearance

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IMPORTANT TO REMEMBER!!!!

Don’t default – don’t ignore your debt After 270 days late, servicer assumes you will not pay Servicer can garnish your wages and tax refunds Servicer can sue - you are responsible for costs Collection agencies take over Default is recorded on Credit Report School can withhold records Professional Licenses are pulled in a growing number

of states Student loans rarely discharged in bankruptcy

Keep all your servicers updated as to phone numbers, address, change in residency status

Call your servicer if you need help Call Financial Aid Office – we are here to help for as long as

you need it

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Student Loan Ombudsman

The student can contact the Ombudsman’s office if unable to resolve any loan difficulties with the school, lender, servicer or guarantor. The contact information for the Student Loan Ombudsman’s Office is:

Office of the OmbudsmanStudent Financial AssistanceU.S. Department of Education

FSA Ombudsman830 First Street, NE

4th FloorWashington, DC 20202

Customer Service Line (877) 557-2575 Website: http://ombudsman.ed.gov

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Summary

Reconcile your records to the Financial Aid Office records to your servicers records

Contact your servicers to update address/phone number etc.

Find out when the grace period starts and ends and when first payment is due and then ask how soon before you should file your forbearance request. DON’T SUBMIT TOO EARLY!

Make schedule and submit all paperwork when necessary or make payment by due date if not forbearing.

Don’t wait until last minute to get your finances in order. Know what you have!

Ask questions.

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University Office of Student Financial Aid

1025 Walnut Street, Room G-1Philadelphia, Pa 19107

[email protected]

If you need an appointment, call the office to schedule a time!!