INCOME-DRIVEN REPAYMENT PLANS AND PUBLIC SERVICE LOAN FORGIVENESS Clemente LaPietra and Thomas Kokis

THE INCOME-DRIVEN REPAYMENT PLANS REPAYE – Revised Pay As You Earn PAYE – Pay As You Earn IBR – Income Based Repayment ICR - Income Contingent Repayment

EXAMPLES OF MONTHLY PAYMENTS Borrower A Single parent with two children Loan Amount $51,000 Gross Income $45,000 Standard Monthly Payment $529 IDR Monthly Payments REPAYE $172-$331 PAYE $172-$331 IBR $258-$496 ICR $409-$459

EXAMPLES OF MONTHLY PAYMENTS Borrower B Single, no dependents Loan Amount $31,000 Gross Income $35,000 Standard Monthly Payment $323 IDR Monthly Payments REPAYE $141-$266 PAYE $141-$266 IBR $141-$266 ICR $223-$247

KEY ITEMS TO REMEMBER Recertify annually. Count household size accurately Dependent Children Persons borrower provides at least half of their support. Online application/recertification is preferable at www.studentloans.gov. Retrieve tax return using IRS retrieval tool for accuracy.

PUBLIC SERVICE LOAN FORGIVENESS Eligible Employers Public sector Government organizations: Federal, State, Municipal, County, Courts etc. Non profit 501(c)(3) Other not-for-profit organizations that provide specific qualifying services

ELIGIBLE LOANS Eligible Loans Direct Subsidized and Unsubsidized Stafford Loans Graduate PLUS Parent PLUS loans must be consolidated to become eligible - only eligible for ICR plan

INELIGIBLE LOANS Ineligible Loans FFELP Loans (unless Consolidated into a DL) PUT FFELP Loans (unless Consolidated into a DL) Perkins Loans Parent PLUS Loans (unless Consolidated into a DL- ICR only)

APPLICATION AND EMPLOYMENT VERIFICATION Borrower submits completed Employment Certification Form to Fedloan Servicing. Fedloan determines eligibility of loans and employer. Student’s Federally held loans, that are not already with Fedloan are transferred to Fedloan. Fedloan is the sole servicer designated by ED to process and service PSLF applications.

COUNTING ELIGIBLE PAYMENTS Borrower must make 120 separate monthly on-time payments defined as payments made within 15 days of due date. Multiple partial payments do count but all must be paid within 15 days of due date. Payments made when not required do not count.

COUNTING ELIGIBLE PAYMENTS Lump sum payments count as one payment with these exceptions: AmeriCorps, Peace Corps and Department of Defense borrowers.

QUALIFYING EMPLOYMENT Full-time Employment 30 hours per week As defined by the employer Multiple qualifying part-time jobs may count as full-time based on above definition. Worship services or time spent proselytizing do not count.

EXAMPLES OF FORGIVEN LOAN BALANCES Recall Borrower A Loan balance at repayment $51,000 Amount paid in 10 years $29,475 Amount forgiven $43,516 Borrower B Loan balance at repayment $31,000 Amount paid in 10 Years $23,879 Amount forgiven $19,609

BEWARE OF FEE-BASED SERVICES All application and re-certification for PSLF are available free of charge at www.studentloans.gov. Be wary of companies that promise to wipe out loans for a large fee paid to them upfront or over-time. Do your research and confirm with your school or student loan servicer before you sign a contract with a private loan servicing company.

PSLF IN THE NEWS This October is the earliest borrowers will become eligible to apply for Public Service Loan Forgiveness. Only eligible payments made after October 1, 2007 on eligible loans count . Employment Certification Form must be in place for each qualifying employer but employment could also be reported retroactively. Forgiveness is not automatic after making 120 qualifying payments. Borrower must complete PSLF form, which is under development, to be considered for the benefit. ED will review form and let borrowers know their standing.

GET ON YOUR FEET PROGRAM Administered by New York State HESC Only for Associates and Bachelor’s Degree holders Graduates of NYS High Schools and Colleges Work in New York State Earn less than $50,000 annually Must enroll within two years of graduation Borrowers on track for PSLF will have two of the 10 years of eligible payments covered

GET ON YOUR FEET PROGRAM Must be enrolled in REPAYE or PAYE prior to applying for the program. HESC confirms Repayment Plan option on NSLDS, and not with the servicers. Must be current on payments at time of verification, and remain current throughout the two-year forgiveness window, to remain eligible. Loan accounts on Deferment or Forbearance are not eligible.

PRESENTERS Clemente LaPietra Thomas Kokis Executive Director Office of Loan Management Monroe College (646) 393-8505 clapietra@monroecollege.edu Thomas Kokis Director of Student Financial Literacy Berkeley College (212) 986-4343 Ext. 4560 tmk@berkeleycollege.edu

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