Stafford Loan Exit Interview

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Stafford Loan Exit Interview

• Class of 2007
• College Board Education Loan Program

2
Agenda

• Stafford Loan Terms
• Repayment Options
• Important Contacts
• Perkins Loan Terms
• Consolidation
• Quiz prizes

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Why Am I Here ?

• Federal regulations require attendance
• Reduce defaults
• Develop good credit vs. bad credit

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Benefits for you

• Learn how to manage repayment
• Identify ways to save money
• Understand repayment options
• Understand the impact of consolidation
• Learn who to contact

5
Major Players

• Lehigh University
• Lender
• Servicer
• Secondary Markets
• Guaranty Agencies (PHEAA)

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Important Documents

• MASTER PROMISORRY NOTE (MPN)
• Binding legal document indicating your commitment
  to repay the loan
• Sign once during enrollment but may be used for
  multiple years
• You will receive maximum Stafford funds each
  year, unless you cancel or decline a portion of
  the loan
• DISCLOSURE STATEMENT
• Received at first disbursement of each loan under
  the MPN

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Stafford Loans

• Interest Rate
• 1st Disbursed July1, 2006 6.8
• Disbursed Prior to July 1, 2006
• 6.54 in-school
• 7.14 in repayment
• variable rate, maximum 8.25, reset July 1st
• Grace Period (generally 6 months)
• Minimum Payment (generally 50)
• 10 Year Repayment Term (other options)

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Stafford Loans

• Subsidized Federal Government pays interest on
  loan during enrollment

• UnsubsidizedBorrower is responsible for interest
  payments during enrollment

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Deferment

• Period of time where, borrower upon meeting
  certain criteria may not have to make payments on
  principal.
• Govt. pay i on subsidized portion

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Forbearance

• Temporary halt , suspension or reduction of
  payments upon meeting certain criteria.
• i accrues during forbearance
• At the lenders discretion

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Repayment Options

• No prepayment penalty
• Forbearance-temporary suspension or reduction for
  financial hardship
• Deferments-period of time where loan payments are
  suspended
• In-school (at least half-time) - unlimited
• Graduate fellowship program - unlimited
• Rehabilitation training program - unlimited
• Economic hardship - 3 year limit
• Unemployment - 3 year limit

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Repayment Programs

• Standard Repayment Plan
• Graduated Repayment Plan (10 years to 15yrs
  -lower payments in the beginning)
• Income Sensitive Repayment Plan(4-25 MGI up to
  15 years for Stafford Loans)
• Extended Repayment Plan (exceed 30k take up to
  25yrs std or graduated payments)

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DEFAULT Failure to Repay Loan

• Delinquency ( 90 days past due)
• Preclaim - Pre-Default (120 days past due)
• DEFAULT (180 days past due)

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DEFAULT Failure to Repay Loan

• Stafford DEFAULT ( 270 days past due)
• Perkins DEFAULT (240 days past due)

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Consequences Of Default

• Bad Credit
• Loss of Financial Aid Eligibility
• Loss of Tax Refund (State Federal)
• Wage Garnishment
• Litigation

• Late Fees
• Collection costs
• Loss of Forbearance and Deferment options

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Lehigh University Exclusive Borrower Benefits
from Sallie Mae

• Pennsylvania Rewards Program
• 0 Loan Origination fees
• 2 loan credit or cash back at repayment based on
  original principal amount
• 3.5 loan credit or cash back based on original
  principal amount after
• Make first 24 consecutive on-time payments
• Enroll in Manage Your Loans
• Sign Up receive acct info at valid e-mail
  address

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UPromise

• UPromise, the nations leading saving-for-college
  company and administrator of 529 college savings
  plans. 7 million members ,one of the largest
  marketing services coalitions in the U.S.
• Members can earn cash rewards on their everyday
  spending at over 70,000 stores and service
  locations, involve their family and friends to
  help save, and invest their rewards and personal
  savings in 529 college savings plans.
• Administers tax-advantaged 529 college savings
  accounts for 1 million investors and manages 11
  billion in 529-plan assets in partnership with
  seven states.
• UPromise will become a subsidiary of SLM
  Corporation and will retain its brand and
  business focus.

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Loan Information

• www.nslds.ed.gov, www.loanlocator.com,
  www.nslc.org/student
• www.pin.ed.gov
• Call your lender/servicer
• Sallie Mae [phone]
• Visit your servicers web site
• www.salliemae.com

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Loan Information

• Services on the web
• On-line access to account information
• Calculators (repayment options)
• www.smartloan.com

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Loan Information

• Dept. of Ed Ombudsmen Debra Wiley
• Resolves disputes from a neutral, independent
  viewpoint. Informally conducts impartial fact
  finding about borrower complaints.
• Not customer service
• [phone]
• www.sfahelp.ed.gov

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Major Players Perkins Loans

• School (Lehigh University)
• Lender (Lehigh University)
• Servicer (University Accounting Service)
• UAS Web site (www.uaservice.com)
• UAS telephone [phone]

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Perkins Loans

• Interest Rate
• repayment rate of 5
• Grace Period
• generally 9 months
• Minimum Payment
• generally 40
• 10 Year Repayment Term

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Student Loan Consolidation

• Bundle your student loans into 1 new
  consolidation loan,
• Reducing monthly bills
• Possibly lower your monthly payment
• For Federal student loans opportunity to lock
  in a low fixed i rate.

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Federal Student Loan Consolidation

• Eligible if you have
• Stafford, PLUS, Perkins, HEAL, or other federal
  student loans
• Minimum 5,000 in federal education loans
• Any federal education loans in grace, repayment,
  deferment, or forbearance (and not in default)

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Private Student Loan Consolidation

• Eligible if you have
• Private student loans from banks, credit
  unions, or schools
• Minimum 5,000 in private student loans
• Good credit or a cosigner with good credit
• Graduated from or will be graduating from a
  postsecondary program of study

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Caution!

• Keep your benefits
• Some private consolidation lenders will allow you
  to consolidate federal and private student loans
  together. Sallie Mae strongly discourages you
  from doing this, as it may result in the loss of
  subsidies, grace periods, deferments and other
  benefits.

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Benefits of Consolidating with Sallie Mae

• Convenience, 1 monthly payment
• Possibility of lowering your monthly payment
• Consolidating with a name you know and
  trustSallie Mae
• Valuable borrower benefits that can save you
  hundreds, even thousands of dollars over the life
  of your loan
• Once you consolidate your loans, you can choose
  the repayment plan that suits your budget
  standard, graduated, extended, or
  income-sensitive.

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Sample Timeline

Grad PLUS and Existing Consolidation loans
FPDD
OSD
Newer Stafford loans
FPDD
EOG
(6 month grace period)
OSD
Perkins loans
FPDD
(9 month grace period)
EOG
OSD
Need to manage debt from this time period forward
OSD Out of School Date EOG End of Grace
Period FPDD First Payment Due Date

1. Make payments (Full or Interest-only)
2. Deferment (Economic Hardship?)
3. Forbearance (Internship/Residency?)

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Remember

• Stay organized - open your mail!
• Log your contacts
• Call your Servicer or Financial Aid Office,
  610-758-3181
• email address infao_at_lehigh.edu
• if you
• Have trouble with repayment
• Change your address or name

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Questions and Quiz

• Prizes
• Thank You!
• Best Wishes for a Happy, Healthy and Prosperous
  Future!