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Welcome to UMF Fall 2007

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Student Loan Entrance/Exit Interview Checklist (check 'Entrance' ... Borrowers total and permanent disability or death 100% Forgiveness ... – PowerPoint PPT presentation

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Title: Welcome to UMF Fall 2007


1
Welcome to UMF!!! Fall 2007
  • Vital Information About You and Your Federal
    Student Loans

2
Items In Your Folder
  • Copy of Todays Presentation
  • Student Loan Entrance/Exit Interview Checklist
    (check Entrance)
  • Helpful Information to Manage Your Student Loans
  • Repayment Estimator/Deferment Chart
  • Credit Cards Use Wisely!
  • Understanding Your Credit Score
  • Funding Education Beyond High School

3
Our Staff is Ready To Assist You
  • Barbi Castonguay
  • Chris Deon
  • Ernestine Hutchinson
  • Jennifer Hutchinson
  • Judy Jewell
  • Ron Milliken
  • Debbie Moody
  • Kimberly Trider-Grant
  • Shirley Yankura

Merrill Center, 224 Main Street Monday - Friday
900AM - 430 PM (207) 778-7100
umfaid_at_maine.edu http//financialaid.umf.maine.edu
4
How You Got To This Point
  • Filed a Free Application for Federal Student Aid
    (FAFSA) for 2007-2008
  • Received UMF Financial Aid Award Letter
  • Requested a Federal Stafford Loan or a Federal
    Perkins Loan
  • Completed a Master Promissory Note for a Federal
    Stafford Loan or a Perkins Master Promissory Note

5
Purpose Of Loan Entrance Counseling
  • Federal regulatory requirement for Stafford
    borrowers who have not previously received a
    Stafford Loan at UMF
  • Learn and/or review vital loan information
  • Prerequisite to receiving Stafford Loan funds on
    your student account

6
Methods To Complete The Stafford Entrance Loan
Counseling Requirement
  • Participate in this session and submit the white
    copy of the Stafford Loan Entrance/Exit
    Interview Checklist before leaving the meeting
  • Go on-line to http//financialaid.umf.maine.edu/l
    oancounsel.php

7
Basics For New Borrowers
What are some examples of educational loans?
  • Federal Perkins Loan
  • Federal Subsidized Stafford Loan
  • Federal Unsubsidized Stafford Loan
  • Federal PLUS Loan
  • Alternative Loan (The Maine Loan, Signature Loan,
    etc.)
  • Educators For Maine Loan
  • Federal Direct Loans

8
Basics For New Borrowers
What Is A Stafford Loan?
  • Fixed Federal Interest Rate 6.8 for loans
    disbursed on or after July 1, 2007
  • Made by banks, credit unions, savings and loan
    associations, etc.
  • Insured by government agencies (FAME) and
    reinsured by the Federal Government
  • There is no credit check required for a Stafford
    Loan, nor any credit scoring, for eligibility for
    this type of loan

9
Basics For Borrowers
What Types Of Federal Stafford Loans Are There?
  • Subsidized (based on need some interest is
    subsidized by the Government)
  • Unsubsidized (you are responsible for the
    interest that accrues)

10
Basics For Borrowers
Example Of How Stafford Loan Eligibility Is
Calculated
Cost 15,000 - Family Contribution
8,000 - Other Aid 3,000 Eligibility for
subsidized 4,000 Note Loan cannot exceed
grade level amount. e.g., 3,500 for first year
students.
11
Basics For Borrowers
Constraints to understand - Federal Stafford (or
Federal Direct) Loan Limits (for subsidized and
unsubsidized)
Annual loan limits until July
1, 2008 First year 3,500 Second year
4,500 Third year 5,500 Fourth year
5,500
12
Basics For Borrowers
Constraints To Understand
Loan Fees (up to 3) 3,500.00 x 3 105.00 Net
loan amt 3,395.00 Some lenders deduct no loan
fees. If lenders deduct fees from the gross loan
amount allotted to each semester before the net
loan funds are sent to UMF, then Fall net
loan 1750 (gross) - 52.50 (fees)
1697.50 Spring net loan 1750 52.50
1697.50 Annual net loan 3500 105.00
3395.00
13
Basics For Borrowers
Terms And Conditions
  • Deferment
  • Forbearance
  • Cancellation

14
Basics For Borrowers Rights
  • Copy of Promissory Note, repayment schedule, and
    disclosure form
  • Grace period
  • Deferment and cancellation provisions
  • A repayment period of up to ten years
  • Prepayment without penalty
  • Be informed if your loans are sold or managed by
    a servicing organization

15
Basics For Borrowers Responsibilities
  • Keep your lender informed
  • Use your funds for educational expenses for your
    loan period
  • Meet satisfactory progress standards
  • Know UMFs refund policy
  • Pay your loan on time including any accrued
    interest

16
Stafford Loan Cancellation Provisions
  • Borrowers total and permanent disability or death
    100 Forgiveness
  • Full-time teacher for five consecutive years in a
    designated elementary or secondary school serving
    students from low-income families Up to 5000
  • Bankruptcy (in rare cases) 100 if a court
    rules that repayment would cause undue hardship
  • Highly Qualified Teachers math or science in
    secondary schools and special education in
    elementary schools Up to 17,500

17
Stafford Loan Cancellation Provisions
  • Closed School 100 if the school closed before
    the student could complete their program of study
    or if the school issued a false loan
    certification
  • School does not make the required return of loan
    funds to the lender Up to the amount that the
    school was required to return

18
Perkins Loan Basics
  • The Perkins Loan program is need-based
  • Has a fixed 5 interest rate
  • UMF is your lender

19
Maximum Perkins Loan Amounts At UMF (Federal
limits are higher)
20
Perkins Process
  • To accept a Perkins Loan offer, indicate your
    acceptance of the loan on your award letter.
  • A Perkins Master Promissory Note will be mailed
    to you for you to sign and return.
  • You must complete your Perkins Disclosure and
    Loan Information Sheet on WebDSIS.
  • www.maine.edu/dsis

21
Perkins Disclosure and Loan Information Sheet
Completion
  • Sign on to WebDSIS www.maine.edu/dsis
  • Choose term e.g. Fall 2007
  • Select Financial Aid from the links
  • Once in the Financial Aid section, select Perkins
    Loan from the bar of links
  • You will be directed to complete the online form
    which will require the home and work addresses
    and phone numbers for your parents
  • You will also enter the addresses and phone
    numbers for four references (not parents) who
    must all have different addresses

22
Perkins Repayment
  • You have a nine (9) month grace period after
    either graduating, dropping below half-time (six
    credits), or leaving school
  • You may be eligible for a deferment or
    forbearance
  • Cancellation options are available

23
Some Examples Of Perkins Loan Cancellation Options
  • Borrowers death or permanent disability
  • Teaching in designated school systems or in
    certain fields in areas with a teacher shortage
  • Working as a law enforcement officer

24
Who To Talk To About Your Perkins Loan
  • While you are enrolled at UMF, direct your
    questions to the Financial Aid Office
    (207)778-7100.
  • When you are in repayment, direct all Perkins
    Loan questions to the Loan Processing and
    Receivables Management Office at Orono. You may
    call (207) 561-3444 or 1-800-308-6148.

25
Receiving Your Stafford or Perkins Loan Funds
  • Loans are generally divided in half and issued
    once per semester
  • Net amount after origination fees
  • Electronic Funds Transfer (EFT) to your UMF
    account or you sign your check that is co-payable
    to you and UMF - you will be contacted by our
    Student Accounts staff.
  • Credits in excess of charges are refunded by
    check usually on Mondays and Wednesdays on the
    week following the credit balance by Student
    Accounts staff in the Merrill Center

26
UMFs Refund Policy On Tuition Withdrawn From All
Classes
Prior to End of Second Week 100 Tuition and
Fees From Above to End of 5th Week 50 Tuition
and Fees From Above to End of 8th Week 25
Tuition and Fees After the 8th Week 0
27
Avoid Delinquency And Default
  • Delinquency means non-payment of your loan when
    due
  • Default means non-payment for 270 days
  • 97 of Maine students have repaid their loans

28
Consequences Of Default
  • FFEL loans cannot be eliminated through
    bankruptcy
  • Results in poor credit rating that may impact
    ability to get other credit for cars, homes, etc.
  • Ineligible for future student aid
  • Federal and state taxes withheld
  • Enormous hassle

29
Personal Financial Plan Set Up A Personal Budget
  • Know your weekly, monthly, semester, and annual
    expenses
  • Establish a personal budget
  • Stick to your budget!

30
Personal Financial Planning
  • Be wary of credit card debt
  • Pay off credit card balance every month
  • Freshmen who rack up a 1000 credit card bill
    and pay only the minimum amount each month will
    finish their bachelors degree, complete a
    masters program, begin earning a living, and
    still have 3 1/2 years to go to finish paying off
    that freshman year spending spree. And that
    assumes no purchases beyond the initial
    1,000. Source William Stafford

31
Know Your Loan
Who Is Your Lender? Name Address How To
Contact How Much Do You Currently Owe? How Much
Do You Plan To Borrow In The Future For Education?
32
Borrowing Can Be Good!
  • Helps pay immediate bills and expenses
  • Enables focus on academics and graduation
  • Increases earnings potential by facilitating more
    education
  • Reduces financial worries
  • Good repayment good credit rating

33
Too Much Debt Can Be Bad
  • Reduces your spending possibilities
  • Limits ability to save for the future
  • Additional stress

34
Four Years Of Pizza On A Stafford Loan
Financial Indigestion
  • Initial Cost Per Pizza 15
  • Total Pizzas 208
  • Total Cost 3,120
  • Interest Rate 8.25(maximum rate)
  • Number of Payments 120
  • Total Cost 5,729
  • Total Interest Paid 2,609
  • Final Cost Per Pizza 28

35
Maintain Your Loan Folder
  • Keep borrower copy of Promissory Note
  • Keep loan disclosures from your lender
  • Keep directions
  • Keep all correspondence from your lender
  • Keep a log with good notes of all phone calls and
    relevant events

36
Check It Out…Now And Annually
  • With NSLDS (National Student Loan Data System),
    federal student loans can be checked online
  • http//www.nslds.ed.gov
  • Contact NSLDS for your PIN at http//www.pin.ed.go
    v
  • Check out the Student Guide at
  • http//studentaid.ed.gov/guide/

37
Basics For Borrowers Loan Application Process In
Review
  • Submit a FAFSA
  • Financial Aid Award Letter
  • Select a Lender and Loan Amount (if Stafford)
  • Read and Sign Promissory Note with rights and
    responsibilities

38
Loan Consolidation
  • Allows you to combine several types of federal
    student loans with various repayment schedules
    into one loan with one monthly payment
  • Currently has a fixed interest rate
  • Payments may be lower if you opt for an extended
    payment period (though this will increase your
    overall interest paid)

39
Loan Consolidation
  • Contact your lender for information regarding
    consolidation
  • If you receive unsolicited consolidation
    information, we suggest contacting your Stafford
    lender if youre considering consolidating your
    loans
  • All students can consolidate their loans during
    the grace and repayment periods.

40
Drawbacks to Consolidation
  • Significantly increases the total cost of
    repaying the loan
  • Loss of borrower benefits or cancellation
    privileges of the individual loans involved
  • You cannot undo consolidation

41
Use E-mail and Web DSIS
  • Activate your maine.edu email address and, if
    necessary, use the forwarding feature
  • Check WebDSIS regularly for information about
    financial aid, registration, and billing
  • http//www.maine.edu/dsis/
  • Get help from the Help Desk at the UMF Computing
    Center at extension 7300
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