Repayment of Your Student Loan Debt

1. Repayment of Your Student Loan Debt

2. Objectives Participants will gain a better understanding of: • Borrower’s rights and responsibilities • Repayment options available • Ways to stay on track with payments • Where to find help if not able to pay back the student loans

4. Finding The Info • National Student Loan Data System: www.nslds.ed.gov or call 1-800-4-FED-AID • Student Loan Repayment Calculators: www.studentaid.ed.gov www.mappingyourfuture.org www.finaid.org

5. Interest • Calculating the monthly interest on a Federal student loan is done with the “simple daily basis” formula: Outstanding Principal Balance X Interest Rate X Number of days between payments divided by 365

6. Your Rights You have the right to know: • The amount you have borrowed and an estimate of your monthly payment • Your interest rate • The date repayment will begin • The name of your lender • What type of student loan you have • An explanation of any fees associated with this loan

7. Your Responsibilities: • Repay the amount borrowed plus interest • Update your personal contact information when it changes • Seek help when you cannot pay

8. Life Cycle of your Student Loan • In School Period • Grace Period • Repayment Period • Delinquency Status • Default Status

9. Repayment • You must repay your student loans • EVEN IF: • You are dissatisfied with the services provided • by the school • You have not received a payment booklet • You cannot find a job • You do not complete your education

11. Standard • Minimum monthly payment is $50, but may be higher • depending on balance • Maximum repayment period of 10 years • Graduated • Begins with lower payments that increase over time • Maximum repayment period of 10 years • More interest accrues over the life of the loan • because the principal balance decreases at a slower • rate

12. Income-Based (IBR) • Available for payments made on or after July 1, 2009 • Adjusted payment amount based on income and family size and poverty guidelines • Forgiveness of remaining debt after 25 years • Calculator available at: www.IBRinfo.org

13. Pay As You Earn (PAYE) – New! • Lower monthly payments • Interest payment benefit available for up to • 3 consecutive years • Remaining balance forgiven after 20 years • Qualifies for Public Service Loan Forgiveness • Must contact servicer to apply • Electronic application available • Calculator available at: • http://Studentaid.ed.gov/PayAsYouEarn

14. Extended • Available to new borrowers on or after • October 7, 1998, who have a minimum • balance of $30,000 in loans • Payment amounts can be fixed or graduated • Maximum repayment term is 25 years • More interest may accrue over the life of the • loan because the principal balancedecreases • at a slower rate

15. Compare Repayment Plans • Know your options! Find the best plan to fit YOUR situation by comparing the different options and choose one according to your needs. • Repayment plan calculators are available to help you compare monthly payments. Visit www.ibrinfo.org or www.mappingyourfuture.org. • You may change repayment plans as your situation changes. Discuss your options with the contact person for your loan(s).

16. Communicating with your lender • Program your lender’s contact information into your cell phone and be sure to notify of any changes in your telephone number, current address, and e-mail. • Start a folder and label it “Student Loan Information.” Keep all loan documents from your lender in a safe place. • When speaking with your lender always write down • Name of whom you spoke with • Date and time of call • Confirmation number of your call if available

17. Staying on Track • Make your monthly payments • On time (on or before due date) • To the correct address • Whether or not you received a bill • Sign up for automatic withdrawal if this option is offered

18. Getting Help When You Cannot Pay If you are unable to make your scheduled payments, contact your lender to discuss your options Some of the common options include: • Deferment • Forbearance • Consolidation

19. Deferment • Deferments are granted for specific situations and have certain time limitations and eligibility conditions. Common deferment situations: • Enrollment in school (at least half-time) • Study in a graduate fellowship program • Rehabilitation training program for disabled individuals • Unemployment • Economic hardship • Military service

20. Forbearance • Forbearance is a postponement or reduction of your monthly student loan payment and is granted at the discretion of the lender Consolidation • Consolidation allows you to combine multiple student loans into one new student loan

21. Delinquency • If you are ONE day late on your student loan payment, you are considered delinquent Default • If you have not made payments for 270 days or 9 months, you will be considered in default status

22. Penalties of Default If you default on your loan(s): • You will owe the entire balance immediately • You will lose your eligibility for interest rate reductions • You will not be eligible for deferments or forbearances • You may not be eligible for additional student financial aid • You will lose your positive credit rating on your credit report

23. More Penalties of Default • Your loan(s) may be assigned to a collection agency • You will pay collection costs and fees • Your state and federal income tax refunds may be offset • Your wages may be garnished • Your Florida lottery winnings may be offset

24. More Penalties of Default • The guaranty agency may file a civil suit against you • Your loan(s) may be transferred to the U.S. Department of Education for collection • Your academic transcripts will be held as required by Florida Statute 1009.95

25. Cancellation of Your Student loan Debt There are situations in which a student loan may be discharged: • Death • Disability • School Closure • Identity Theft • False Loan Certification • Failure of a school to pay a refund if you withdraw • Bankruptcy (in rare cases)

26. Saving Money • Tax deductions are available to help you with your loan repayment: The American Opportunity Tax Credit Lifetime Learning Credit www.irs.gov/publications/p970 • Loan Forgiveness Programs are career specific and may pay for or even cancel all of your student loans. Information can be found at www.studentaid.ed.gov

27. Resolving Disputes If you and your lender do not agree on the status of your loan or the loan balance, use the following steps to resolve the issue: • Download the “Self-Resolution Checklist” and proceed through the recommended steps at http://studentaid.ed.gov/sites/default/files/ombudsman-self-resolution-checklist.pdf • Read about common issues and how to resolve them at www.studentaid.ed.gov/repay-loans/disputes • As a LAST RESORT, contact the Federal Student Aid Ombudsman (advocate) office: http://studentaid.gov/repay-loans/disputes/prepare 1-877-557-2575 FSA Ombudsman Group, 830 First Street, NE, Mail Stop 5144, Washington, DC 20202-5144

28. For Further Assistance Contact Florida Department of Education Office of Student Financial Assistance Customer Service Unit • 1-800-366-3475 • www.FloridaStudentFinanciaAid.org

29. Navigating Your Financial Future OSFA offers a series of educational materials regarding debt management for students and borrowers. For more information, please visit www.navigatingyourfuture.org.

30. Questions?

31. Thanks for attending today’s presentation!