Federal Student Loan Repayment Options NEASFAA, March 2016 Tom Ramaeker Senior Strategic Business Director, Inceptia

Deferment/Forbearance Standard Graduated – 2 or 3 interest only option Extended – Fixed or Variable Income “related” Income Contingent Repayment (ICR) Income Based Repayment (IBR) Pay as You Earn (PAYE) REPAYE December 2015 Repayment Plans 2 © 2014 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

Available provided borrower… Requests a forbearance and Provides adequate documentation and Shows intent to repay loan Temporarily stops or reduces monthly payment Forbearance period 3-4 months Total forbearance period three years All loans continue to accrue interest Borrower can pay interest or have it capitalize Deferment/Forbearance After Grace Period? 3 © 2014 Inceptia

10 years, same payment each month Remind borrowers this is the plan assigned to them should they not choose May be assigned by loan holder should IBR or ICR application not be complete Monthly payments higher than with other plans, but total repayment costs are lower Standard (Level Payments) 4 © 2014 Inceptia

Payments start lower and increase by designated amounts at designated times 10 year repayment term, loan holders offer interest-only payments for two or three years Initial lower payments may result in higher overall repayment costs when compared with Standard Graduated 5 © 2014 Inceptia

Up to 25 years, same payment each month Graduated version of Extended plan may be available Lower payments over extended time may result in much higher overall repayment costs when compared with Standard Must have at least $30,000 in federal loan debt Extended 6 © 2014 Inceptia

Four main plans Income-Contingent Repayment Plan (ICR) – 1994 Direct Loan Program only More information available at StudentAid.gov/ICRStudentAid.gov/ICR Income-Based Repayment Plan (IBR) – 2009 Available in both the Direct Loan and FFEL Program More information available at StudentAid.gov/IBRStudentAid.gov/IBR Pay As You Earn Plan – 2012 Direct Loan Program only For new borrowers in FY 2008 who receive new loans in FY 2012 More information available at StudentAid.gov/PayAsYouEarnStudentAid.gov/PayAsYouEarn REPAYE – December Direct Loan Program only New borrower” on or after October 1, 2004 Income Driven Plans Overview 7 © 2014 Inceptia

All Direct Loans are eligible except parent PLUS Loans and pre-7/1/2006 Direct PLUS Consolidation Loans Direct Consolidation Loans made on/after 7/1/2006 that repaid parent PLUS loans are eligible Under ICR, borrowers pay the lesser of: 12-year standard repayment schedule multiplied by income percentage factor (payment based on loan debt and income) or 20% of discretionary income (payment based only on income) Income Contingent Repayment (ICR) 8 © 2014 Inceptia

All Direct and FFEL Program loans except parent PLUS loans and Consolidation Loans that repaid parent PLUS loans Must meet partial financial hardship requirements Family size AGI State of residence 15% of discretionary income (borrowers prior to 7/1/14) 10% of discretionary income (new borrowers after7/1/14) 15 or 10% of discretionary income (depending on new borrower definition) but never more than the 10-year standard repayment plan amount Income Based Repayment (IBR) 9 © 2014 Inceptia

 All Direct Loans are eligible except parent PLUS loans and Consolidation Loans that repaid parent PLUS loans Must be a new borrower on/after 10/1/2007 who received new loan on/after 10/1/2011 Must meet partial financial hardship requirements Family size AGI State of residence 15 or 10% of discretionary income (depending on new borrower definition) but never more than the 10-year standard repayment plan amount Pay as You Earn (PAYE) 10 © 2014 Inceptia

 All Direct Loans are eligible except parent PLUS loans and Consolidation Loans that repaid parent PLUS loans Must be a new borrower on/after 10/1/2004 No partial financial hardship requirement 10% of discretionary income No cap on interest capitalization Spouse/partner income always counts Interest paid for negative amortization REPAYE 11 © 2014 Inceptia

For ICR remaining balance forgiven after 25 years of qualifying repayment For IBR remaining balance forgiven after 25 years if not a new borrower on or before July 1, years if new borrower on or after July 1, 2016 For Pay As You Earn, remaining balance forgiven after 20 years of qualifying repayment For REPAYE remaining balance forgiven after 20 years - UG loans only 25 years - UG/Graduate loans According to the IRS, forgiven amount is considered taxable income Loan Forgiveness 12 © 2014 Inceptia

Income Base Repayment Unpaid interest on subsidized loans is paid the first 3 years a borrower is on the plan Pay As You Earn Unpaid interest on subsidized loans is paid the first 3 years a borrower is on the plan. For REPAYE Unpaid interest on subsidized loans is paid the first 3 years a borrower is on the plan. After first 3 years unpaid interest on BOTH subsidized and unsubsidized loans will be covered up to 50%. Interest Subsidy 13 © 2014 Inceptia

Undergraduate Borrower: Family size of 1 Has an AGI of $25,000 and Has $30,000 in Direct Subsidized Loan debt at an 6.0% interest rate Income increases 5% annually Income Driven Plan - Example 14 © 2014 Inceptia

15 Borrower Example - Recap ICRIBRPAYEREPAYE Initial Payment $197$92$61 Final Payment$255$333$290$299 Time in Repayment 19 years, 2 months 21 years, 6 months 20 years Total Paid$51,838$60,441$38714$38,714 Forgiveness$0 $27,164$23, year StandardGraduated Payment$333$190 - $571 Time in Repayment10 years Total Paid$39,967$42,636

Undergrad/Graduate Borrower: Family size of 1 Has an AGI of $40,000 and Has $60,000 in Direct Subsidized and Unsub Loan debt at an 6.0% interest rate Income increases 5% annually Income Driven Plan - Example 16 © 2014 Inceptia

17 Borrower Example – UG & Graduate loans ICRIBRPAYEREPAYE Initial Payment $471$279$186 Final Payment$586$666$615$819 Time in Repayment 13 years, 8 months 18years, 1 month 20 years24 years, 11 months Total Paid$89,152$107,385$131,061$126,173 Forgiveness$0 $41,008$0 10-year StandardExtended Payment$666$387 Time in Repayment10 years25 years Total Paid$79,935$115975

© 2012 NSLP | Confidential. Do not copy or redistribute without expressed written permission from NSLP.18 Public Service Loan Forgiveness Overview Continued Steps to participate Refinance any FFELP loans in the Federal Direct Loan Program at: Select income driven repayment plan Start making payments Keep good records regarding public service employment history 120 months do NOT have to be consecutive Any amount forgiven is not treated as taxable income

© 2012 NSLP | Confidential. Do not copy or redistribute without expressed written permission from NSLP.19 Public Service Loan Forgiveness Overview Loan forgiveness program for public service employment Direct Loan Program only — not available in FFELP ICR, IBR, PAYE or REPAYE repayment can lower monthly payment amount Eligibility based on employer and employment status Full time employment at a 501(c)(3) organization that is exempt from taxation under section 501(a) of the Internal Revenue Code of 1986, or Government (federal, state, local, tribal) agency FEDAID for specifics Forgiveness after 120 “qualifying payments”

© 2012 Inceptia | Confidential. Do not copy or redistribute without expressed written permission from Inceptia. Public Service Loan Forgiveness FedLoan Support myfedloan.org Toll-free number, (855) Customer service available 8:00am – 9:00pm EST Borrower portal to assist in tracking eligible loan payments 20

© 2012 NSLP | Confidential. Do not copy or redistribute without expressed written permission from NSLP.21 Department of Education Loan Holder Contact Information DEPT OF ED/FEDLOAN SERVICING (PHEAA) DEPT OF ED/SALLIE MAE DEPT OF ED/GREAT LAKES DEPT OF ED/NELNET

22 © 2014 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. Tom Ramaeker Sr. Strategic Business Director