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EXIT
Counseling
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Agenda

• Loan types interest rate
• The grace period
• Repaying your student loans
• Repayment plans incentives
• Avoiding delinquency default

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Key Industry Players

• Financial aid office
• Federal government
• Lender
• Servicer
• Secondary market
• Guarantor

• Credit bureaus
• Experian
• Equifax
• TransUnion
• Ombudsman
• 1.877.557.2575
• www.ombudsman.ed.gov
• NSLDS
• www.nslds.ed.gov

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Subsidized Stafford Loans

• Need-based
• Federal government pays interest
• In school
• During grace period (six months)
• During deferments
• Payment not required while in school

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Unsubsidized Stafford Loans

• Not need-based
• You pay interest while in school
• Interest begins accruing at disbursement
• Pay interest as you go
• Pay capitalize interest
• Unpaid interest is added to the principal
• Increases total debt monthly payment

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Interest Rates Loan Fees

• Loans taken after July 1, 2006
• Fixed rate of 6.80
• Loans taken before July 1, 2006
• Adjusted annually even while in repayment
• Variable rate revised every July 1
• Interest rate cap of 8.25
• One percent origination fee
• One percent default fee

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The Grace Period

• One-time grace period
• Six months
• Begins after you graduate, leave school or drop
  below half time
• Monthly payments begin when your grace period
  ends

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National Student Loan Data System

• Central database for student aid records
• Track loans from disbursement to payoff
• Total student loan indebtedness
• Loan status interest rate
• www.nslds.ed.gov
• Request a PIN
• www.pin.ed.gov

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Loan Repayment Chart
Interest rates on federal Stafford loans taken
after July 1, 2006 are at a fixed 6.80.
Loans taken before July 1, 2006 are
variable and adjusted annually every July 1 with
a cap of 8.25.
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Standard Repayment Plan

• Fixed monthly payment
• 50 minimum payment
• 10-year repayment schedule

A subsidized Stafford loan repaid at 6.80
percent interest, assuming the standard repayment
plan of 10 years.
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Graduated Repayment Plan

• Payment gradually increases over time
• Payment must cover interest due
• 10-year repayment schedule

A subsidized Stafford loan repaid at 6.80
percent interest, assuming the graduated
repayment plan of 10 years.
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Income-Sensitive Repayment Plan

• Payment based monthly gross income
• Payment must cover interest due

A subsidized Stafford loan repaid at 6.80
percent interest, assuming you request the
monthly payment to be based on 4 percent of your
gross monthly income.
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Extended Repayment Plan

• Loans greater than 30,000
• Standard or graduated repayment plans
• Repayment term not to exceed 25 years

A subsidized Stafford loan repaid at 6.80
percent interest, assuming an extended standard
repayment plan of 25 years.
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Money-Saving Benefits

• Interest rate reductions
• Consecutive, on-time,
• monthly payments
• Sign up for automatic payment
• Ask lender for details
• Tax credits
• www.edfund.org
• www.irs.gov

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Financial Planning

• EDWISEOnline Financial
• Planning Guide
• Develop good money strategies
• Create a college spending plan
• Create a post-college spending plan
• Compare salaries
• Compare repayment options
• Find money saving tips
• www.edwise.org

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Your Rights

• Receive a copy of your signed MPN
• Receive a disclosure statement
• Receive a six-month grace period
• Prepay all or part of your loan without penalty
• Deferments forbearance, if eligible
• Written notice if your loan is sold
• Proof of discharge after repaying loan in full

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Your Responsibilities

• Repay your loan(s)
• Make on-time, monthly payments
• Read correspondence from lender
• Notify lender of changes within 10 days
• School enrollment status
• Name, address telephone number
• Ask your lender for help

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Avoid Delinquency Default

• Pay on time
• A payment received one day late is considered
  delinquent
• Delinquent payments are reported to the credit
  bureaus
• Always call your school or lender for help

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Deferment

• Postponement of payments
• Not automatic
• You must apply receive approval from lender
• Primary reasons
• In-school
• Unemployment
• Economic hardship
• Military service

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Forbearance

• Temporary reduction or postponement of payments
• Not automatic
• You must apply and receive approval from lender
• Primary reasons
• Poor health
• Residency program
• Financial hardship
• Interest will continue to accrue

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Loan Consolidation

• Combine loans into one single new loan
• You agree to new terms and conditions
• One monthly payment
• Lower payment/longer repayment period
• Payments begin at consolidation
• Be informed
• www.finaid.org
• www.edfund.org

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Loan Forgiveness

• Volunteer work
• Military service
• Teach or practice medicine in certain communities
• AmeriCorpswww.americorps.gov
• Peace Corpswww.peacecorps.com

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Loan Cancellation

• In extreme extenuating conditions
• Total and permanent disability
• Inability to complete course of study due to
  school closure
• False certification by school
• Death

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Consequences of Default

• Full amount of loan is due
• Including collection costs
• Subject to federal and state offsets
• Wages and tax refund may be garnished
• Credit will be tarnished
• Lose deferment and forbearance options
• Lose eligibility for future financial aid
• May lose eligibility for certain federal or state
  jobs
• May lose professional license

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Keys to Successful Repayment

• Keep school and lender informed about changes
• Keep copies of all documents in one place
• Open all mail
• The longer it takes to repay your loans, the more
  interest you will pay
• Build good credit with timely payments
• Always ask for help

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True or False

• T
• F
• T

• I should repay my student loans even if I fail to
  complete my education.
• My minimum monthly payment will never exceed 50.
• I may change repayment plans annually to
• meet my financial needs.

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Questions