EXIT LOAN COUNSELING

1. EXIT LOAN COUNSELING

2. Things to Know Before you Go….. Know your Loans Repayment Options Loan Consolidation Deferment and Forbearance Loan Forgiveness Consequences of Default Rights & Responsibilities Tax Benefits

3. KNOW YOUR LOANS

4. Types of Loans • Federal Direct Stafford Loan • Federal Direct PLUS

5. Loan Terms

6. Where is my loan?

7. National Student Loan Data System Who is my servicer? Whatis my interest rate? When will I need to start making payments? Howmuch do I owe?

8. www.NSLDS.ed.gov

9. www.NSLDS.ed.gov

10. Tracking Your Loans

11. REPAYMENT OPTIONS

12. Stafford and PLUS Repayment Plans • Standard • Graduated • Extended • Income Based Repayment (IBR) • Income Sensitive and Income Contingent

13. Standard • Available for all Federal Loans • 10 year repayment schedule • Fixed payment amount Advantage: Pay lowest amount of interest over the life of the loan.

14. Graduated • Available for all Direct, FFEL, and Federal Consolidation Loans (w/out Parent PLUS) • 10 year repayment • Payment amount is lower in the earlier years of repayment and gradually increase over time. • Payment amount is generally reset every two years. • Minimum Payment = Interest . Advantages: Loan payments increase as salary increases, andlower interest cost than Extended Repayment

15. Extended • Available for all Direct, FFELP, and Federal Consolidation Loans (w/out parent PLUS) • Must have more than $30,000 in outstanding Direct or FFEL Loans. • Up to 25 year repayment • Payments are fixed or graduated, and are not based on income. • Minimum Payment = Interest • Advantage: Allows for a more gradual increase in loan payments than the Graduated Repayment Plan

16. How my payment plan affects my payment and the interest I will pay…. $45, 000 Loan @ 6.8% Interest Extended (25 Years) Graduated (10 Years) Standard (10 Years) Payment = $518 Interest = $17,000 Payment = $355 up to $767 Interest = $20,000 Payment = $312 Interest = $48,000

17. Income Contingent (ICR) • Available for Direct loans only • 25 year repayment • Payment amounts are based on annual income, total loan debt, and family size. • Monthly payment may be less than interest charged. Advantage: Loan payments increase as salary increases, and allows for loan forgiveness after 25 years.

18. Income-Based Repayment (IBR) • Available for Direct Loans or Direct Consolidation Loans (w/o PLUS) • Loan payment limited to 15% of discretionary income • After 25 yearsremaining balance is forgiven. • Monthly payment maybe less than the interest charged. • For subsidized Stafford loans, if your payment does not cover your monthly accrued interest, your interest will be subsidized for up to 3 years.

19. IBR Comparison • Borrower has loan debt of $45,000 • 6.8% interest rate • Salary is $40,000/yr • Single with no dependents 10 Yr. Standard Monthly Payment = $518 IBR Monthly Payment = $288

20. Direct Loan Servicing www.myedaccount.com

21. LOAN CONSOLIDATION

22. Federal Loan Consolidation • Available for Stafford, Perkins and PLUS loans • Pays off multiple loans with one new loan • New loan carries new terms (interest rate is calculated using a weighted average) • You may consolidate a defaulted loan http://loanconsolidation.ed.gov

23. loanconsolidation.ed.gov

24. More on consolidation… • May only consolidate once, allowed to add loans, but consolidation cannot be reversed • Can be much more expensive due to longer repayment term • ACS is the servicer for all Direct Consolidation loans

25. DEFERMENT AND FORBEARANCE

26. Deferment and Forbearance What’s the same? Temporary suspension of regularly scheduled payment • What’s different? • Interest accrual • Forbearance is granted according to borrower’s eligibility, and also at the lender’s discretion. • Deferment is granted according to borrower’s eligibility as determined by federal regulation.

27. To Qualify….. Forbearance • Serving in AmeriCorps (receiving an education award) • During medical and dental internship or residency programs • Monthly student loan payments are 20 % or more than your total monthly gross income. • Discretionary Deferment • Military Service • In School (at least half-time) • Economic Hardship (3 yr. max) • Unemployment (3 yr. max)

28. Unemployment Deferment To be eligible the borrower must… …be unemployed or working less than full-time AND Seeking, but unable to find, full-time employment in any field or at any salary or responsibility level, and registered with a public or private employment agency (school placement offices and “temporary agencies do not qualify) OR ...be eligible for unemployment benefits

29. Economic Hardship Deferment To qualify, the borrower must meet one of the following criteria… • Receiving an economic hardship deferment in the Federal Direct Loan or Federal Perkins Loan Program • Receiving/received payments under a federal or state public assistance program • Peace Corps volunteer • Working full-time and monthly income does not exceed the larger of the federal minimum wage rate or 150% of the poverty guideline.

30. LOAN FORGIVENESS

31. Public Service Forgiveness - Direct Loans • Available for Direct Loans only (Not FFELP) • Work full time (at least 30 hours) for the government or a qualifying non-profit organization - 501(c) (3) • Make 120 on time payments (does not need to be consecutive) • Payments must be made under the IBR, ICR or 10 Yr. Standard repayment plans. • Balance is forgiven • Submit forms annually to the Department of Ed

32. Stafford & Plus - Additional Forgiveness • Remaining balance after 25 years of qualifying payments. • Taxable income to the borrower in the year the loan forgiveness occurs

33. Discharge • Total and Permanent Disability Discharge • Death Student loans are usually not dischargeable due to bankruptcy

34. CONSEQUENCES OF DEFAULT

35. The Perils of Default • 270 Days Past Due = Default • You can’t walk away from making your payments. • Consequences: • Wages and Federal and State tax refunds garnished • Additional costs to you (collection charges, late fees, etc.) • Professional licenses withheld • Loss of eligibility for future federal financial aid and loan deferments • Full amount of loan comes due

36. Avoiding Default • Keep good records • Open and Read your mail. • Notify lenders/servicers of name/address changes • Prioritize your debts: pay off most expensive debt first • Take advantage of deferment options if you qualify

37. YOUR RIGHTS & RESPONSIBILITIES

38. Your Rights • A copy of your Promissory Note. • Repayment Disclosure Statement with detailed information about interest rates, fees, your balance, and repayment options. • Grace period and deferments (if you qualify) • Loan forgiveness under certain circumstances • Graduated or income-based repayment plan (if you qualify) • Prepayment without penalty • Notice if lender assigns or sells your loan • Questions answered

39. Your Responsibilities • Repay your loan. • Make your payments on time even if you don’t receive a bill. • Notify your loan holder or servicer immediately of any change to your name, address, and other personal identification information. • Notify your lender if enrollment status changes. • Complete exit and entrance interviews. • Read and understand your loan documents. • Ask for help if you need it.

40. Resolving Disputes – Federal Loans Federal Student Aid Ombudsman’s Office U.S. Department of Education FSA Ombudsman 830 First Street, NE, Fourth Floor Washington, DC 20202-5144 www.ombudsman.ed.gov fsaombudsmanoffice@ed.gov Ph: 877-557-2575 (toll free)

41. What the Ombudsman Office can do: • Research your problem in an impartial and objective manner and will try to develop a fair solution What the Ombudsman Office cannot do: • Does not have the authority to impose a solution

42. TAX BENEFITS

43. Student Loans and Your Taxes American Opportunity Credit Lifetime Learning Credit Tuition & Fees Deduction Student Loan Interest Deduction

44. Contact Information Duke Student Loan Office Box 90775 studentloans@duke.edu 919-660-3630 • statement)

45. Questions