Mrs. Bogozan’s borrowed student loan PPT

2 Free Application for Federal Student Aid = FAFSA Free Application for Federal Student Aid = FAFSA Term = Semester Term = Semester often used interchangeably Academic Year = Academic Year = A period of at least 30 weeks of instructional time during which a full-time student is expected to complete at least 24 semester or trimester hours, or at least 36 quarter hours, at an institution that measures program length in credit hours; at least 900 clock hours at an institution that measures program length in clock hours Cost of Attendance = Cost of Attendance = The student's Cost Of Attendance includes tuition, fees, and standard allocation designed to cover reasonable living expenses while attending school. The cost of attendance is determined by the school using guidelines established by federal regulations. FAO = FAO = Financial Aid Office

3 On January 1, 2011, total US educational debt stood at $830,000,000,000.00, which equals $2,700 for every man, woman & child in the US On January 1, 2011, total US educational debt stood at $830,000,000,000.00, which equals $2,700 for every man, woman & child in the US In 2000, 36% of all US college graduates graduated with some loan debt; by 2110, that percentage had increased to 66% In 2000, 36% of all US college graduates graduated with some loan debt; by 2110, that percentage had increased to 66% In 2000, 5% of all US college graduates defaulted on repayment of their loans within 3 years following graduation; in 2010 that rate had nearly tripled to 14.7% In 2000, 5% of all US college graduates defaulted on repayment of their loans within 3 years following graduation; in 2010 that rate had nearly tripled to 14.7%

4 Eligibility Determined by combining: Information & awards from FAFSA Other awards & payments Limited by the Cost of Attendance

5

6 Origination Eligibility DLs are transmitted to Dept of Ed.

7 Disbursement Origination Eligibility Funds transmit from DoEd to school on appointed disbursement day

8 Disbursement Origination Eligibility Repayment

9 Entrance Counseling Entrance Counseling First-time borrowers First-time borrowers Inform them of their rights and responsibilities of taking out this loan Inform them of their rights and responsibilities of taking out this loanwww.nslds.ed.gov Exit Counseling Exit Counseling All loan recipients that depart from your institution All loan recipients that depart from your institution Graduate, withdraw, transfer, do not return Graduate, withdraw, transfer, do not return No Exit Counseling = no transcripts / no diploma No Exit Counseling = no transcripts / no diploma

10 Document executed by borrower, which spells out the terms & conditions of the loan disbursements, use and repayment Document executed by borrower, which spells out the terms & conditions of the loan disbursements, use and repayment If the note is for multiple loan periods and varying amounts, the lender may elect to have the borrower use a If the note is for multiple loan periods and varying amounts, the lender may elect to have the borrower use a Master Promissory Note

11 Oldest active educational loan Institution administers this loan Institution administers this loan Fixed 5% interest rate Fixed 5% interest rate Repayment begins 9 months after student ceases to be enrolled at least 1/2 time Repayment begins 9 months after student ceases to be enrolled at least 1/2 time Minimum payment as low as $30 Minimum payment as low as $30 Maximum repayment term is 10 years Maximum repayment term is 10 years

12 Federal PLUS Loan is a loan for parents of dependent students Federal PLUS Loan is a loan for parents of dependent students Parent borrower is fully liable for loan Parent borrower is fully liable for loan (may require endorser) FAFSA not required by regulation, but schools can require it if they wish FAFSA not required by regulation, but schools can require it if they wish Eligibility Eligibility Parent must be the natural or adoptive parent of the student, or spouse of one of those people Parent must be the natural or adoptive parent of the student, or spouse of one of those people Parent must be a US Citizen, U.S. National or eligible NC Parent must be a US Citizen, U.S. National or eligible NC Parent must have no Title IV loans in default Parent must have no Title IV loans in default Parent must be credit worthy, or have credit worthy endorser Parent must be credit worthy, or have credit worthy endorser

13 U.S. Citizen, U.S. National, permanent US residents & aliens U.S. Citizen, U.S. National, permanent US residents & aliens Enroll 1/2 time in a degree seeking program Enroll 1/2 time in a degree seeking program SAP - Satisfactory Academic Progress SAP - Satisfactory Academic Progress Register with selective service Register with selective service Must complete FAFSA Must complete FAFSA

14 Subsidized DL (-based) (Need-based)Interest: ED pays during ED pays during In-school In-school Grace Grace Deferment Deferment * Student pays during Repayment Repayment Unsubsidized DL (-based) (Non need-based)Interest: Student responsible for all Can be capitalized, or Can be capitalized, or Student can choose to pay interest Student can choose to pay interest

15 Need-based Financial AidNon-Need Financial Aid ScholarshipsUnsubsidized DLs State & Federal GrantsPrivate Loans Subsidized DLs

Combined Sub & Unsub Sub may not exceed Undergrad Dependent $31,000$23,000 *Undergrad Independent $57,500$23,000 Grad and Professional $138,500$65,500 16

17 Standard – Monthly payment remains consistent for 10 years Graduated – Monthly payments are lower at first but then increase every 2 years over the 30 yr repayment term Income-sensitive – Monthly payments are based on your monthly gross income Extended – Monthly payments over a 25 year plan. Must have a debt greater than $30,000 Income Contingent – pymts based on annual calculations and adjusted so as not to cause “undue hardship”; (25 yr forgiveness) Income Based Plan - Monthly payments will not exceed 15% of the amount by which your adjusted gross income exceeds 150% of the poverty line for your family size. (25 yr forgiveness)

18 Period of postponing payments Period of postponing payments Federal government will pay interest for the borrower on Subsidized DL Federal government will pay interest for the borrower on Subsidized DL Some possible deferments: Some possible deferments: - Education - Peace Corps/ Public Service/ Military - Economic Hardship

19 Temporary cessation, reduction, or extension of payments Temporary cessation, reduction, or extension of payments Student is responsible for interest that accrues Student is responsible for interest that accrues Borrower is willing but temporarily unable to pay Borrower is willing but temporarily unable to pay

20 Failure to pay back student loan Failure to pay back student loan Student is considered in default after being delinquent for 270 days; lender may file claim as early as day 271 Student is considered in default after being delinquent for 270 days; lender may file claim as early as day 271 Student is susceptible to wage garnishment, seizure of income tax refunds, lottery winnings, license non-renewal, sued by DOE Student is susceptible to wage garnishment, seizure of income tax refunds, lottery winnings, license non-renewal, sued by DOE Student not eligible for fed. financial aid; 7- year damage to student credit history Student not eligible for fed. financial aid; 7- year damage to student credit history

* That was a lot of information. To make sure you are 100% on the financial aid process, you are going to create a time line, beginning with FAFSA and FAFSA ID and ending with college graduation. * YOU MUST INCLUDE ACTUAL DEADLINES FROM THE COLLEGE OF YOUR CHOICE!