Student Loans Made Easy Let’s Get Started…
The big question! How should I repay my loans? $500,000 Debt High Interest Rate
The Formula Step 1) Knowing your loans Step 2) Planning your future Step 3) Knowing your options Step 4) Choosing a plan
Step 1) Know your Loans! In order to answer how you should repay your loans you need to know: How much do you owe? What types of loans do you have? What Is Your Interest Rate?
Step 1) Know your Loans! Sallie Mae $150,000 Unknown NSLDS.gov In order to answer how you should repay your loans you need to know: How much do you owe? Value and type of loan can be found in two methods: Easy) With your loan holder Hard) Government records at nslds.ed.gov https://www.nslds.ed.gov/nslds/nslds_SA/
Step 1) Know your Loans! Sallie Mae $150,000 Unknown NSLDS.gov $450,000 In order to answer how you should repay your loans you need to know: How much do you owe? Value and type of loan can be found in two methods: Easy) With your loan holder Harder) Government records at nslds.ed.gov https://www.nslds.ed.gov/nslds/nslds_SA/
Student Loan Types Determine Benefits Step 1) Know your Loans! Sallie Mae $150,000 Direct Service Loans Unknown NSLDS.gov $450,000 FFEL & Direct Service What Types of Loans Direct Service Loans: Health Care and Education Reconciliation Act of 2010 Direct Government control and reduced rates Support Loan Forgiveness Family Federal Education Loan (FFEL) Higher Education Act 1965 Creation of federally guaranteed loans Stafford, Plus Loans Private Loans Student Loan Types Determine Benefits
Step 1) Know your Loans! How much do you owe? Sallie Mae $150,000 Direct Service Loans Unknown NSLDS.gov $450,000 FFEL & Direct Service How much do you owe? What types of loans do you have? What Is Your Interest Rate? Defined as a weighted average of all your student loan interest rates Hard) Calculate a weighted average
((Rate*Value)+(Rate*Value)) Step 1) Know your Loans! Only has a list of Loans? ((Rate*Value)+(Rate*Value)) (Value) What Is Your Interest Rate? Defined as a weighted average of all your student loan interest rates Hard) Calculate a weighted average
Student Loan Repayment Estimator Step 1) Know your Loans! Student Loan Repayment Estimator Easy Method) Student Loan Repayment Estimator https://studentloans.gov/my DirectLoan/mobile/repayme nt/repaymentEstimator.actio n
Step 2) Plan your Future Sallie Mae $150,000 Direct Service Loans 5.8% Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% Student loans repayment can be entirely changed by the following parts of a life plan: What will be your adjusted gross income? How large is your family? Where do you work?
Step 2) Plan your Future How much do Dentist’s make? How much do new graduates make? Student loans repayment can be entirely changed by the following parts of a life plan: What will be your adjusted gross income? Note: Adjusted Gross Income is the income you have left after you have made all qualified tax deductions such as Retirement Savings and Donations.
Step 2) Plan your Future How much do Dentist’s make? Health Policy Institute Averages: General Practitioners: $174,780 Specialists: $322,200 2014 ADA Survey of the Dental Practice How much do new graduates make? Health Policy Institute: Insufficient responses Estimate: $140,000 after between 3-5 years Estimate: $90,000-$115,000 Starting Student loans repayment can be entirely changed by the following parts of a life plan: What will be your adjusted gross income?
Step 2) Plan your Future Student loans repayment can be entirely changed by the following parts of a life plan: What will be your adjusted gross income? http://www.bls.gov/oes/curr ent/oes291021.htm
Step 2) Plan your Future Student loans repayment can be entirely changed by the following parts of a life plan: What will be your adjusted gross income? http://www.bls.gov/oes/curr ent/oes291021.htm
Step 2) Plan your Future Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 Student loans repayment can be entirely changed by the following parts of a life plan: What will be your adjusted gross income? How large is your family? Where do you work? We will talk more about work location next.
Step 3) Knowing your options Health Care and Education Reconciliation Act of 2010: Created new access to student loan information Repayment Calculators Resources Studentaid.ed.gov
Knowing your options- Repayment Estimator
Knowing your options- Repayment Estimator Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2
Knowing your options- Repayment Estimator Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2
Knowing your options- Repayment Estimator Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2
Payment Types
Payment Types
Payment Types Payment Term Requirements Rank PAYE 10% 20 Years Oct 1, 2007 No Debt Oct 2, 2011 New Loan #1 Revised PAYE 25 Years Undergraduate Graduate Loans #3 #4 IBR** 15% July 1, 2014 #2 #5 ICR 20%** 12 Years Any #6 **Note: Can File Taxes Separately from a Spouse to Reduce Payment
Payment Types- Understanding Income Driven Equation: (AGI- (150% POV for family size))*Rate/12 = Payments AGI= Adjusted Gross Income AGI Decreases as Qualified Retirement Savings, Medical Expendatures, and Business expenses increase Payment as Retirement POV= Federal Poverty Level For Family Size As Family Size Increases POV Increases and your payment decreases Payment as Family Size
Knowing your options- Repayment Estimator What Loan Payment Would You Choose? Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 First loan 2003**
Knowing your options- Repayment Estimator What Loan Payment Would You Choose? Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 First loan 2003** Standard > Extended > REPAYE
Knowing your options- Repayment Estimator What Loan Payment Would You Choose? Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Loan began after 2013 Standard > Extended > PAYE
Step 4) Choosing a plan Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Loan began after 2013 Extended $948 for 300 Months Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
What Loan Payment Would You Choose? Knowing your options What Loan Payment Would You Choose? Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 First Loan Disbursed 2006
What Loan Payment Would You Choose? Knowing your options What Loan Payment Would You Choose? Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Standard > Extended > REPAYE
Step 4) Choosing a plan Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Loan began after 2013 Extended $948 for 300 Months Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Standard > Extended > REPAYE $553 for 300 Months *Will Pay Taxes on $642,000 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Bonus) Additional Options Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Loan began after 2013 Extended $948 for 300 Months Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Standard > Extended > REPAYE $553 for 300 Months *Will Pay Taxes on $642,000 Consolidation Public Service Loan Forgiveness Scholarships
Bonus) Additional Options Consolidation: Public: Combines all student loans into one New interest rate is your Weighted Average Lose old loan benefits and discounts *Is required for FFEL Loans if you want PSLF Private Set there own Interest Rate Usually require financial collateral NOTE: Not recommended to consolidate your loans with your spouse in case of divorce or death. Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Standard > Extended > REPAYE $553 for 300 Months *Will Pay Taxes on $642,000 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Bonus) Additional Options Consolidation: Public: Combines all student loans into one New interest rate is your Weighted Average Lose old loan benefits and discounts *Is required for FFEL Loans if you want PSLF Private Set there own Interest Rate Usually require financial collateral NOTE: Not recommended to consolidate your loans with your spouse in case of divorce or death. Unknown NSLDS.gov $450,000 Direct Service Consolidation Loan 7% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Standard > Extended > REPAYE $553 for 300 Months *Will Pay Taxes on $642,000 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Bonus) Additional Options Public Service Loan Forgiveness Receive Forgiveness of remaining debt after 10 years Tax FREE! Must work at a non-profit organization or 501c3 Logistics: Once entered into the PSLF your loans will Be moved to MyFedLoans Require annual re-certification Unknown NSLDS.gov $450,000 Direct Service Consolidation Loan 7% AGI $115,000 Family Size 6 First Loan Disbursed 2006 Standard > Extended > REPAYE $553 for 300 Months *Will Pay Taxes on $642,000 Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Bonus) Additional Options Public Service Loan Forgiveness Receive Forgiveness of remaining debt after 10 years Tax FREE! Must work at a non-profit organization or 501c3 Logistics: Once entered into the PSLF your loans will Be moved to MyFedLoans Require annual re-certification Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6 Unknown NSLDS.gov $450,000 Direct Service Consolidation Loan 7% AGI $115,000 Family Size 6 First Loan Disbursed 2006 REPAYE $553 for 120 Months Non Taxed
Bonus) Additional Options Scholarships Federal: National Health Service Corps NHSC $50,000 over 2 Years Non-Taxed, Upfront, You choose how to disburse it Indian Health Services IHS $20,000 per year -Health Professions Scholarship Program HPSP -State Scholarships Note: Some state scholarships can be combined Unknown NSLDS.gov $450,000 Direct Service Consolidation Loan 7% AGI $115,000 Family Size 6 First Loan Disbursed 2006 REPAYE $553 for 120 Months Non Taxed Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Bonus) Additional Options Scholarships Federal: National Health Service Corps NHSC $50,000 over 2 Years Non-Taxed, Upfront, You choose how to disburse it Indian Health Services IHS $20,000 per year -Health Professions Scholarship Program HPSP -State Scholarships Note: Some state scholarships can be combined Unknown NSLDS.gov $450,000 Direct Service Consolidation Loan 7% AGI $115,000 Family Size 6 First Loan Disbursed 2006 REPAYE $553 for 120 Months Non Taxed Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Step 4) Choosing a plan Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Loan began after 2013 Extended $948 for 300 Months Sallie Mae $150,000 Direct Service Loans 5.8% AGI $100,000 Family Size 2 Unknown NSLDS.gov $450,000 DSL Consolidation 7% AGI $115,000 Family Size 6 First Loan Disbursed 2006 REPAYE with PSLF $553 for 120 Months with PSLF Unknown NSLDS.gov $450,000 FFEL & Direct Service 7.22% AGI $115,000 Family Size 6
Additional Questions? Should I repay my loans in residency or keep my grace period? It is up to you, but consider the sooner you start paying, the sooner they will be gone. Note: Most residencies are non-profits and therefore qualify for Public Service Loan Forgiveness Are income driven repayment plan back dated? Payment is calculated off of the previous years taxes. This results in your first year of loan repayment being almost $0, Your second year payment will only have half a years income so it will be low, and your third years payment will finally be normal
Additional Questions? Should I put extra money toward retirement or student loans? First, 30 year historical growth in the stock market has been approx. 8.5% after taxes and 11% Before taxes. However, these are not guaranteed. If your company provides a match, then this is considered a 100% return on your income and should always be taken. The question is: Stock market possible growth rate vs. student loan guaranteed interest rate. It is up to you, but remember behavioral efficiency. Note: 9.8% Large Company U.S. Stocks and 11.5 Small Company U.S. Stocks