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Page 1: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Congratulations Class of 2014!

From: The Financial Aid Office

Team

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

Page 2: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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!!

Page 3: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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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Submit before you leave presentation

1. Statement of Attendance 2. Repayment Schedule (only for those

with Jefferson loans)

Survey – we will email you a Survey Monkey link prior to March 15

Remember to complete federally required online EXIT counseling at http://studentloans.gov

Page 5: Congratulations Class of 2014! From:  The Financial Aid Office Team

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TJU Debt Record

Includes all aid you received each academic year

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

Bottom of sheet tallies your total loan principal debt by Banner code –

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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) 826-4470 http://acs-education.com

Mailing of payments to:

With coupon: Without coupon:Xerox Educational Services Xerox Educational

Services, Inc– PO Box 3295 CPS Monetary Processing

Milwaukee, WI 53201-3295 PO Box 7061 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]

Serviced by Xerox/ACS, Inc. (800) 826-4470

http://acs-education.com

Page 7: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Page 8: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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

Page 9: Congratulations Class of 2014! From:  The Financial Aid Office Team

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TJU Loan Repayment Schedule

The Repayment Schedule Lists:1. payment start date2. monthly payment amount3. repayment period4. interest rate 5. Amount of interest that will accrue

over life of loan6. total loan cost (interest and principal)

Page 10: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Jefferson Loan Parameters

Jefferson Loans – aka TJU Loan, Alumni Loan, or loan named after Donor (Morgan, Simpson, Mills etc.)1. 12 month grace only

(exceptions: Wayland, Robt. Wood Johnson, Sledd Cunnison loan have post graduate training deferment options beyond Grace period)

2. 10 year repayment

3. Fixed 5% interest rate (exceptions: Wayland, Kellogg, Snyder, Bacharach, and Robt Wood Johnson have reduced interest rates)

4. Cancelled upon Death/permanent disability

Jefferson is the lender/Xerox-ACS is the Servicer

Page 11: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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

CAN BE CONSOLIDATED WITH FEDERAL STAFFORD/GRAD PLUS!

Jefferson is the lender/Xerox-ACS is the Servicer

Page 12: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Federal LDS Loan Parameters

Loan for Disadvantaged Students

12 month grace Deferment is permitted for 3 year Residency 10 year repayment Fixed 5% interest rate Cancelled upon Death/permanent disability

CAN BE CONSOLIDATED WITH FEDERAL STAFFORD/GRAD PLUS

Jefferson is the lender/Xerox-ACS is the Servicer

Page 13: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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

Cannot be consolidated!

Jefferson is the lender/Xerox-ACS is the Servicer

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Who is Who? 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

Many to most borrowers only have a “servicer” due to Direct Lending

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Forbearance

• What is it? Postponement of your federal loans for a set period of time - usually for 12 months at a time.

• Available for duration of residency for Stafford, Grad PLUS and Federal Consolidation Loans

• Application required at least annually – most servicers require a form for sign-off from Housestaff Office

• Mandatory that servicer grant forbearance for duration of residency… but borrower MUST ask for it and complete form

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

• Use only after you have exhausted your grace period

Page 16: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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

Interest rate - If borrowed: 7/1/13 to 6/30/14 – fixed 5.41% 7/1/06 to 6/30/13 –fixed 6.8%; Prior to 6/30/2006 - Rate is variable on all loans that are not

consolidated.

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

Cancelled upon Death/permanent disability

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Federal Graduate PLUS

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

Eligible to apply for Forbearance just like Stafford Can be consolidated with Stafford, Perkins, and LDS Interest rate - If borrowed:

7/1/13 to 6/30/14 – fixed 6.41% 7/1/10 to 6/30/13 –fixed 7.9%; 7/1/06 to 6/30/10 – fixed 8.5%

Prior to 6/30/2006 – loan was available to parents only

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

Cancelled upon Death/permanent disability

Page 18: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Private Alternative Loans (includes Residency/Relocation 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 forbearance and necessary documentation of internship/residency

Interest rate will change as frequent as the index used (indexes include 30 day LIBOR; 91 day LIBOR; PRIME RATE)

there is usually no ceiling on the interest rate.

Not cancelled upon death or permanent disability

Page 19: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Finding Your Federal Loans on NSLDS.ed.gov

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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Contact all of your loan Servicers REQUIRED!

45 days before or after your last date of enrollment Confirm

1. That you are no longer enrolled2. repayment amount/amount owed3. Grace period:

Start date End date when first payment is due!!!

4. when Forbearance form should be submitted(for Stafford and Grad PLUS)

Call first - then follow up in writing if you think this is necessary – keep copy of written letter for your file

Update your address

Page 21: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Dates To Remember- What to do and when to do it! (See chart in handout-page 2)

Grace periods relate to each individual loan borrowed. 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 such as immediate forbearance).

If you used the full 6 month Grace period on a loan or group of loans (e.g., between college and TJU, leave of absence) you do not get another grace period on these loans

FILE FOR FORBEARANCE 2 - 4 WEEKS BEFORE REPAYMENT DUE DATE – Standard form is usually necessary

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

Page 22: Congratulations Class of 2014! From:  The Financial Aid Office Team

FFELP vs. DIRECT Loans

FFELP – Federal loans borrowed from a bank/lender (e.g., Wells Fargo, Citibank). Most have been turned over to federal servicer

DIRECT - Federal loans borrowed directly from government; only lender beginning 7/1/10 – sometimes referred to as a “DL” loan

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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

Extended (Level)*• Level monthly payments over 25 year

period

*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!!!

Page 27: Congratulations Class of 2014! From:  The Financial Aid Office Team

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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

Page 29: Congratulations Class of 2014! From:  The Financial Aid Office Team

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

•($162,000 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

Page 30: Congratulations Class of 2014! From:  The Financial Aid Office Team

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

Page 31: Congratulations Class of 2014! From:  The Financial Aid Office Team

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

Studentloans.gov

Page 34: Congratulations Class of 2014! From:  The Financial Aid Office Team

Postpone payments and pay Later (using Forbearance)

Pay Now (using Income-Based Repayment)

Do both –forbear loan payments but make voluntary payments (you are in the driver’s seat to determine the amount and frequency of payments)

The most feasible options during residency:

Page 35: Congratulations Class of 2014! From:  The Financial Aid Office Team

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• Amount forgiven is NOT taxable under PSLF

• MyFedLoan is only federal servicer managing 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??

• Will your plans change?

• 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???

Page 39: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Consolidation Fast Facts

Combining many federal loans into one loan, one set of new terms, with one servicer – NEW you can choose the servicer (note: MyFedLoan is the only servicer for PSLF)

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

Federal Government is the only entity offering federal Consolidation http://studentloans.gov (see option “Direct Consolidation Loan Applications” under the

button)

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Consolidation

Why to consider consolidation:

1. Multiple servicers to repay (convenience)

2. To obtain Public Service Loan Forgiveness (DL) (if consolidated, Perkins, LDS, and FFELP loans will become Direct Loans)

3. To make Perkins or LDS loans eligible for IBR

Page 41: Congratulations Class of 2014! From:  The Financial Aid Office Team

When to Consolidate

If you consolidate before your grace period is exhausted, you may 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).

A repayment plan will be chosen at this time but entering repayment is not required; forbearance can be utilized

More than likely, a new forbearance on the consolidated loan would need to be filed. 41

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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

Page 43: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Repayment Hierarchy – do you have the ability to make voluntary or extra payments?

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/extra payments to the most expensive first

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

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Loan repayment programs

Military NHSC Pennsylvania Delaware NIH Other – see AAMC resource at

http://services.aamc.org/fed_loan_pub

Page 45: Congratulations Class of 2014! From:  The Financial Aid Office Team

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Tax Benefits

Lifetime Learning Credit Deduction for student loan interest

payments Tuition and Fee

Page 46: Congratulations Class of 2014! From:  The Financial Aid Office Team

Full Deduction Partial Deduction NO Deduction

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

$75,000 or more

Married filing

Jointly

$125,000 or less

$125,001 to $154,999

$155,000 or more

www.irs.gov/publications/p970

The Taxpayer Relief Act of 1997Student Loan Interest

(income restrictions subject to change each tax year)

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

contact your servicer directly.

Upon request – handout from the federal Common Manual with policy on Mandatory Forbearance can be emailed to you

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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 Financial Aid Office records 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 when to file your forbearance request. DON’T SUBMIT TOO EARLY!

Make schedule and submit all paperwork when necessary or be prepared to make a 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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New Address:

University Office of Student Financial Aid1015 Walnut Street, 1st Floor

Suite 115Philadelphia, Pa 19107

[email protected]

If you need an appointment, call the office to schedule a time!!215-955-2867


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