LOAN ENTRANCE INTERVIEW DENTAL SCHOOL CLASS OF 2018 Responsible Borrowing Leads to Responsible Repayment

Considerations Dental school graduates have great track record for repayment Multiple ways to effectively manage your student loan debt Constantly evaluate your borrowing and impact on repayment Work closely with your Financial Aid Office

Agenda items Dental school debt and your student loan portfolio Common sense ways to reduce cost, borrowing, and repayment amount What your colleagues are doing Action items and resources to help

Agenda items Dental school debt and your student loan portfolio Common sense ways to reduce cost, borrowing, and repayment amount What your colleagues are doing Action items and resources to help

Good news You can fund entire COA with federal loans You may enter income stream faster than other health sciences colleagues Aggressive repayment may be possible Easier than ever to track student loans

Educational debt* $241,097 mean debt all schools $209,150 mean debt public schools $283,978 mean debt private schools 21.7% no debt or debt less than $100, % debt in excess of $300,000 * Indebted graduates in the Class of 2013

Student loan portfolio Federal Direct Unsubsidized Stafford* Federal Direct Grad PLUS* Campus-based (awarded by school) –Federal Perkins*, Health Professions Student Loan (HPSL), Loans for Disadvantaged Students (LDS), Institutional Private loans Federal Consolidation* * Referenced on NSLDS at

Federal Stafford Loans* Direct Unsubsidized Stafford $40,500 per year** Fixed interest rate 6 month Grace period Deferment and Forbearance options Multiple repayment and forgiveness options Master Promissory Note (MPN) * Referenced on NSLDS at ** School may prorate depending on months in COAwww.NSLDS.ed.gov

Federal Grad PLUS* Direct Grad PLUS COA less other aid, including Stafford Fixed interest rate 6 month post-enrollment Deferment Deferment and Forbearance options Multiple repayment and forgiveness options Master Promissory Note (MPN) * Referenced on NSLDS at

Federal Perkins* Subsidized 5% fixed interest rate 9 month Grace period Deferment and Forbearance options Standard 10 year repayment –Not eligible for income-driven repayment plans, or Public Service Loan Forgiveness Eligible for consolidation * Referenced on NSLDS at

National Student Loan Data System (NSLDS) Federal database of all Stafford, Grad PLUS, Federal Consolidation, Perkins Information on Loan Servicer Download NSLDS record into AAMC/ADEA DLOC at each time you borrowwww.AAMC.org/GoDental Download NSLDS into

HPSL and LDS* Subsidized 5% fixed interest rate 12 month Grace period Deferment and Forbearance options In general, Standard 10 year repayment –Not eligible for income-driven repayment plans, or Public Service Loan Forgiveness Eligible for consolidation * HPSL and LDS are NOT referenced on NSLDS

Institutional loans* Subsidized or unsubsidized Terms and conditions vary by school –Check Grace, Deferment, and Forbearance options, plus repayment options, with school –Not eligible for income-driven repayment plans, or Public Service Loan Forgiveness Not eligible for federal consolidation * Institutional loans are NOT referenced on NSLDS

Private loans* Unsubsidized Borrowing limits vary by lender Variable or fixed interest rate Terms and conditions vary by lender –Check repayment and postponement options with lender –Not eligible for income-driven repayment plans, or Public Service Loan Forgiveness Not eligible for federal consolidation * Private loans are NOT referenced on NSLDS

More on private loans Can easily derail a repayment strategy Pay special attention to private loans from undergraduate and/or post- baccalaureate programs No national database Speak with Financial Aid Office if considering private loans in lieu of federal

Interest rates Stafford at 6.21% fixed* Grad PLUS at 7.21% fixed* Rates change each July 1, then remain fixed Campus-based –Perkins, Health Professions Student Loans (HPSL), Loans for Disadvantaged Students (LDS) at 5% fixed Check disclosures for rates on Institutional and Private Loans * Loans disbursed on or after July 1, 2014

More on interest rates Rates change for new Stafford and Grad PLUS each July 1 then remain fixed Maximum rate on Stafford is 9.5% Maximum rate on Grad PLUS is 10.5% Be aware of capitalization –Accrued and unpaid interest is added back to principal amount borrowed –Usually occurs at repayment

Loan servicers Organizations lenders contract with to work with you in repayment See to find out who services your loans* Your federally owned loans should all be serviced by one loan servicer See for details** * Click on the number to the left of each loan on the Financial Aid Summary page ** See Managing Repayment for additional information on loan servicers

Repayment plans Standard 10 year (level payments) Extended 25 year (level payments) Graduated 10 and 25 year (scheduled increases) Income-driven repayment (IBR and PAYE)* Details at Use Dental Loan Organizer and Calculator to run estimates ( * Income Based Repayment and Pay As You Earn

Repayment assumptions $162,000 Federal Unsubsidized Stafford Remainder in Federal Grad PLUS Interest rates –6.21% on Stafford Loans all four years –7.21% on Grad PLUS Loans all four years No prepayment under any repayment plan $184,140 starting salary, no residency* * Source: American Dental Association (ADA)

AAMC/ADEA Dental Loan Organizer and Calculator (DLOC) Joint effort with Association of American Medical Colleges (AAMC) Easy to use debt management tool –Download NSLDS record into AAMC/ADEA DLOC –Estimate repayment under different plans –Estimate forgiveness amounts under 25 year IBR, 20 year PAYE, Public Service Loan Forgiveness –Customize based on your salary and career

$241,097 Repayment Estimates for $241,097 MEAN ALL SCHOOLS Indebted Students, Class of 2013

Repayment of $241,097 Standard 10 year –$3,184 per month for 10 years –$382,091 total repayment Extended 25 year –$1,898 per month for 25 years –$569,357 total repayment Income Based Repayment (IBR) –$2,055 to $3,184 per month* Pay As You Earn (PAYE) –$1,370 to $2,475 per month* * Payments change annually

$209,150 Repayment Estimates for $209,150 MEAN ALL PUBLIC SCHOOLS Indebted Students, Class of 2013

Repayment of $209,150 Standard 10 year –$2,743 per month for 10 years –$329,201 total repayment Extended 25 year –$1,627 per month for 25 years –$488,089 total repayment Income Based Repayment (IBR) –$2,055 to $2,743 per month Pay As You Earn (PAYE) –$1,370 to $2,475 per month

$283,978 Repayment Estimates for $283,978 MEAN ALL PRIVATE SCHOOLS Indebted Students, Class of 2013

Repayment of $283,978 Standard 10 year –$3,823 per month for 10 years –$458,616 total repayment Extended 25 year –$2,325 per month for 25 years –$696,939 total repayment Income Based Repayment (IBR) –$2,078 per month for 12 months only Pay As You Earn (PAYE) –$1,385 per month for 12 months only

Forgiveness programs Income Based Repayment (IBR) after 25 years* Pay As You Earn (PAYE) after 20 years* Public Service Loan Forgiveness (PSLF)* –Borrower must make 120 eligible payments on Direct Loans while working for eligible employer Details at Estimate forgiveness amounts with AAMC/ADEA Dental Loan Organizer and Calculator * Forgiveness amount taxable under current law for IBR and PAYE, NOT for PSLF

Public Service Loan Forgiveness Forgiveness program designed to encourage borrowers to enter and remain in public service for at least 10 years May be of interest to highly indebted dental school graduates interested in academia or other non-profit sector career employment See for detailswww.StudentLoans.gov

Loan repayment programs Help repaying loans in exchange for service commitment National Health Service Corps, Indian Health Service, National Institutes of Health, armed forces, some states See Chapter 4 of ADEA Official Guide to Dental Schools for listing Different from forgiveness programs

Borrower rights Written explanation of loan obligations Explanation of default and consequences Copy of MPN and return when loan paid in full Disclosure prior to repayment Be notified when your loan is sold Federal subsidy, if eligible Forgiveness and discharge, if eligible May request Forbearance, if needed Prepay without penalty

Borrower responsibilities Attend Senior Loan Exit Interview before you graduate Repay loan according to schedule Notify loan servicer regarding: –Anything impacting your ability to repay –Change in status, including graduation date –Change in name and contact information –Change in enrollment

Important reminders Loans are a serious obligation and must be repaid regardless of status of your degree program, length of time required to complete program, satisfaction with program, and future employment Serious consequences for delinquency and default

Agenda items Dental school debt and your student loan portfolio Common sense ways to reduce cost, borrowing, and repayment amount What your colleagues are doing Action items and resources to help

Tuition and fees Books and supplies Loan fees Living and personal Computer TOTAL $29,000 $ 5,500 $ 900 $28,000 $ 2,500 $66,800 Sample COA

Ways to reduce cost, borrowing, and repayment Control what you can control in your COA Set a realistic monthly budget, stick to it, and constantly reevaluate it Never borrow more than you really need Ask family to pay interest as it accrues Don’t live like a dentist while you are in school

Agenda items Dental school debt and your student loan portfolio Common sense ways to reduce cost, borrowing, and repayment amount What your colleagues are doing Action items and resources to help

Sample repayment strategies for dental school graduates Using Standard 10 year or Extended 25 year and accelerating payments Using income-driven repayment and accelerating payments Using income-driven repayment to help with cash flow and with goal of PSLF* Using service commitment programs * Public Service Loan Forgiveness

Agenda items Dental school debt and your student loan portfolio Common sense ways to reduce cost, borrowing, and repayment amount What your colleagues are doing Action items and resources to help

Your action items Compare your monthly budget with monthly financial aid budget in COA* Use and update AAMC/ADEA DLOC** each time you borrow and at least once a year Keep in touch with Financial Aid Office regarding filing deadlines and changes * Cost of Attendance ** Dental Loan Organizer and Calculator

Resources Financial Aid Office –See Information For Currently Enrolled Students and Residents –Dental Loan Organizer and Calculator (DLOC) –See Managing Repayment –Database of federal student loans

Takeaways Responsible borrowing now helps preserve repayment options later Never borrow more than you need Plan to repay what you borrow and don’t lean solely on federal government for help Keep your radar up regarding changes Work closely with Financial Aid Office Talk with family regarding help

GOOD LUCK! Congratulations and Best Wishes from the American Dental Education Association!