Download CSS Slideshow for 1997-98 Counselor Workshops

Stafford Loan
Exit Interview
Class of 2007
College Board
Education Loan
Program
Agenda
• Stafford Loan Terms
• Repayment Options
• Important Contacts
• Perkins Loan Terms
• Consolidation
• Quiz & prizes
Why Am I Here ?
• Federal regulations require attendance
• Reduce defaults
• Develop good credit vs. bad credit
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
Major Players
• Lehigh University
• Lender
• Servicer
• Secondary Markets
• Guaranty Agencies (PHEAA)
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
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)
Stafford Loans
• Subsidized
Federal Government
pays interest on loan
during enrollment
• Unsubsidized
Borrower is
responsible for interest
payments during
enrollment
Deferment:
• Period of time where, borrower upon
meeting certain criteria may not have to
make payments on principal.
• Gov’t. pay i% on subsidized portion
Forbearance:
• Temporary halt , suspension or reduction of
payments upon meeting certain criteria.
• i% accrues during forbearance
• At the lender’s discretion
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
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)
DEFAULT: Failure to Repay Loan
• Delinquency
( 90 days past due)
• Preclaim - “Pre-Default”
(120 days past due)
• DEFAULT
(180 days past due)
DEFAULT: Failure to Repay Loan
• Stafford DEFAULT
( 270 days past due)
• Perkins DEFAULT
(240 days past due)
Consequences Of Default
• Bad Credit
• Late Fees
• Loss of Financial Aid
Eligibility
• Collection costs
• Loss of Tax Refund
(State & Federal)
• Wage Garnishment
• Litigation
• Loss of Forbearance
and Deferment options
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
UPromise
• UPromise, the nation’s 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.
Loan Information:
• www.nslds.ed.gov, www.loanlocator.com,
www.nslc.org/student
• www.pin.ed.gov
• Call your lender/servicer
• Sallie Mae (888) 272-5543
• Visit your servicer’s web site
• www.salliemae.com
Loan Information:
• Services on the web:
•
On-line access to account
information
•
Calculators (repayment options)
•
www.smartloan.com
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
• (877) 557-2575
• www.sfahelp.ed.gov
Major Players Perkins Loans:
• School (Lehigh University)
• Lender (Lehigh University)
• Servicer (University Accounting Service)
• UAS’ Web site (www.uaservice.com)
• UAS’ telephone # 1.800.999.6227
Perkins Loans
• Interest Rate
• repayment rate of 5%
• Grace Period
• generally 9 months
• Minimum Payment
• generally $40
• 10 Year Repayment Term
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.
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)
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
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.
Benefits of Consolidating with Sallie Mae
• Convenience, 1 monthly payment
• Possibility of lowering your monthly payment
• Consolidating with a name you know and trust—Sallie
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.
Sample Timeline
Grad PLUS and Existing Consolidation loans
OSD
FPDD
Newer Stafford loans
OSD
(6 month grace period)
EOG
FPDD
Perkins loans
OSD
(9 month grace period)
OSD – Out of School Date
EOG – End of Grace Period
FPDD – First Payment Due Date
EOG
FPDD
Need to manage debt from this time
period forward
1.
2.
3.
Make payments (Full or Interest-only)
Deferment (Economic Hardship?)
Forbearance (Internship/Residency?)
Remember
• Stay organized - open your mail!
• Log your contacts
• Call your Servicer or Financial Aid Office, 610-7583181
email address: [email protected]
if you:
• Have trouble with repayment
• Change your address or name
Questions and Quiz
• Prizes
Thank You!
Best Wishes for a Happy, Healthy and
Prosperous Future!