OFFICE OF STUDENT FINANCIAL AID MED SCHOOL LOAN REPAYMENT AMY WHITFORD, FINANCIAL AID COUNSELOR, 608-262-3060, [email protected] SANDI NOWAKOWSKI, FEDERAL DIRECT & PRIVATE LOAN MANAGER, 608-262-4987, [email protected]
Feb 25, 2016
OFFICE OF STUDENT FINANCIAL AID
MED SCHOOL LOAN REPAYMENTAMY WHITFORD, FINANCIAL AID COUNSELOR, 608-262-3060, [email protected]
SANDI NOWAKOWSKI, FEDERAL DIRECT & PRIVATE LOAN MANAGER, 608-262-4987, [email protected]
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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected], 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, [email protected]
SANDI NOWAKOWSKI, FEDERAL DIRECT & PRIVATE LOAN MANAGER 608-262-4987, [email protected]