Public Service Loan Forgiveness Program PRESENTED BY The Foundation for Financial Education A 501(C)(3) NONPROFIT ORGANIZATION

Federal Student Loans  Pay after school  Fixed rate  Subsidized  No credit  Tax deductible  Direct Consolidation  Loan Forgiveness Program Private Student Loans  Pay while in school  Can be variable rate  Unsubsidized  Need good credit  Non-deductible  No consolidation  No loan forgiveness program Federal vs. Private Loans

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Federal Loans Subsidized ‒ Undergraduate ‒ Financial need ‒ Government pays interest ‒ Payment grace period Unsubsidized ‒ Undergraduate/Graduat e ‒ No financial need ‒ Interest during full term PLUS ‒ Graduate or Parents of Dependent Undergraduate ‒ No adverse credit Direct Consolidation ‒ Combines all debt into single payment ‒ Parent PLUS loans Perkins ‒ Financial needs based ‒ Funds come from school ‒ Must be consolidated to qualify

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Standard ‒ 10 Years (up to 30 for consolidated) Repayment Plans Graduated ‒ Increase every 2 years Extended ‒ Up to 25 years ‒ Must have more than $30k in debt REPAYE ‒ 10% of discretionary income ‒ Family income counts PAYE ‒ 10% of discretionary income ‒ Family income only if filed jointly IBR ‒ 10/15% of discretionary income ‒ Family income only if file jointly ‒ Parent Borrows can use for PLUS ICR ‒ 20% of discretionary income

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‒ Direct Subsidized ‒ Direct Unsubsidized ‒ Direct PLUS* ‒ Direct Consolidation Parent Loans have special considerations Eligible Loans ‒ Federal Family Education Loan ‒ Federal Perkins Loan ‒ Health & Nurse Profession Loans Direct Consolidation * PSLF: What loans count? PSLF: What loans count?

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 Must not be in default  Employed full time by a public service organization: ‒ Government organization (federal, state, local, tribal) ‒ 501(c)(3) organization ‒ Special nonprofits: Emergency management Public safety and law Public education Public health Public library PSLF: What you need to know

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PSLF: What you need to know Specific Requirements  Direct Loan serviced by FedLoan Servicing  120 payments after October 1, 2007  Paid in full  No later than 15 days late  Do NOT need to be made consecutively  Payments must be made under one of the following plans: – REPAYE – PAYE – IBR – ICR – 10 year – Any Direct Loan Repayment Plan (Must be greater than standard payment) PSLF: What you need to know

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PSLF: What you need to know Important Considerations ‒ Loan Consolidation  Restarts clock ‒ Parent PLUS ICR only ‒ Multiple employers count ‒ Does it make sense? PSLF: What you need to know Benefits ‒ Lower payments ‒ Up to 80% of loan forgiven ‒ Tax-free forgiveness

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Andrew H. Examples ◦Owes: $17,745 ◦Earns: $20,090 ◦1 dependent ◦Payment : $0.00 ◦Potential forgiveness: $24,488 Monica M: ◦Owes: $51,967 ◦Earns: $ 39,226 ◦2 dependents ◦Payment: $129 ◦Potential forgiveness: $56,234 Yolanda D. ◦Owes: $81,281 ◦Earns: $21,432 ◦3 dependents ◦Payment: $0.00 ◦Potential forgiveness: $76,168 Michael F: ◦Owes: $125,432 ◦Earns: $125,432 ◦3 dependents and wife ◦Payment: $ ◦Potential forgiveness: $101,336

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Process & Resources Selecting Your Plan ◦ Consolidation and Repayment Plans done through StudentLoans.gov ◦ – StudentLoans.gov Assistance Line Employment Certification for Public Service Loan Forgiveness ◦ Not Required Annually ◦ Required for every employer ◦ Available at studentaid.gov Websites: ◦ ◦ ◦

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