Stafford Loan Exit Interview Class of 2007 College Board Education Loan Program

Agenda Stafford Loan Terms Repayment Options Important Contacts Perkins Loan Terms Consolidation Quiz & prizes

Why Am I Here ? Federal regulations require attendance Reduce defaults Develop good credit vs. bad credit

Benefits for you Learn how to manage repayment Identify ways to save money Understand repayment options Understand the impact of consolidation Learn who to contact

Major Players Lehigh University Lender Servicer Secondary Markets Guaranty Agencies (PHEAA)

Important Documents MASTER PROMISORRY NOTE (MPN) Binding legal document indicating your commitment to repay the loan Sign once during enrollment but may be used for multiple years You will receive maximum Stafford funds each year, unless you cancel or decline a portion of the loan DISCLOSURE STATEMENT Received at first disbursement of each loan under the MPN

Stafford Loans Interest Rate 1 st Disbursed July1, 2006 = 6.8% Disbursed Prior to July 1, 2006: 6.54% in-school 7.14% in repayment variable rate, maximum 8.25%, reset July 1 st Grace Period (generally 6 months) **** Minimum Payment (generally $50) 10 Year Repayment Term (other options)

Stafford Loans Subsidized Federal Government pays interest on loan during enrollment Unsubsidized Borrower is responsible for interest payments during enrollment

Deferment: Period of time where, borrower upon meeting certain criteria may not have to make payments on principal. Gov’t. pay i% on subsidized portion

Forbearance: Temporary halt, suspension or reduction of payments upon meeting certain criteria. i% accrues during forbearance At the lender’s discretion

Repayment Options No prepayment penalty Forbearance-temporary suspension or reduction for financial hardship Deferments-period of time where loan payments are suspended In-school (at least half-time) - unlimited Graduate fellowship program - unlimited Rehabilitation training program - unlimited Economic hardship - 3 year limit Unemployment - 3 year limit

Repayment Programs Standard Repayment Plan Graduated Repayment Plan (10 years to 15yrs -lower payments in the beginning) Income Sensitive Repayment Plan (4%-25% MGI up to 15 years for Stafford Loans) Extended Repayment Plan (exceed $30k take up to 25yrs std or graduated payments)

DEFAULT: Failure to Repay Loan Delinquency ( 90 days past due) Preclaim - “Pre-Default” (120 days past due) DEFAULT (180 days past due)

DEFAULT: Failure to Repay Loan Stafford DEFAULT ( 270 days past due) Perkins DEFAULT (240 days past due)

Consequences Of Default Bad Credit Loss of Financial Aid Eligibility Loss of Tax Refund (State & Federal) Wage Garnishment Litigation Late Fees Collection costs Loss of Forbearance and Deferment options

Lehigh University Exclusive Borrower Benefits from Sallie Mae Pennsylvania Rewards Program: 0% Loan Origination fees 2% loan credit or cash back at repayment based on original principal amount 3.5% loan credit or cash back based on original principal amount after: Make first 24 consecutive on-time payments Enroll in Manage Your Loans Sign Up –receive acct info at valid address

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Loan Information: Call your lender/servicer Sallie Mae (888) Visit your servicer’s web site

Loan Information: Services on the web: On-line access to account information On-line access to account information Calculators (repayment options) Calculators (repayment options)

Loan Information Dept. of Ed Ombudsmen: Debra Wiley Resolves disputes from a neutral, independent viewpoint. Informally conducts impartial fact finding about borrower complaints. Not customer service (877)

Major Players Perkins Loans: School (Lehigh University) Lender (Lehigh University) Servicer (University Accounting Service) UAS’ Web site ( UAS’ telephone #

Perkins Loans Interest Rate repayment rate of 5% Grace Period generally 9 months Minimum Payment generally $40 10 Year Repayment Term

Student Loan Consolidation Bundle your student loans into 1 new consolidation loan, Reducing # monthly bills Possibly lower your monthly payment For Federal student loans = opportunity to lock in a low fixed i% rate.

Federal Student Loan Consolidation Eligible if you have: Stafford, PLUS, Perkins, HEAL, or other federal student loans Minimum =$5,000 in federal education loans Any federal education loans in grace, repayment, deferment, or forbearance (and not in default)

Private Student Loan Consolidation Eligible if you have: Private student loans from banks, credit unions, or schools Minimum= $5,000 in private student loans Good credit or a cosigner with good credit Graduated from or will be graduating from a postsecondary program of study

Caution! Keep your benefits Some private consolidation lenders will allow you to consolidate federal and private student loans together. Sallie Mae strongly discourages you from doing this, as it may result in the loss of subsidies, grace periods, deferments and other benefits.

Benefits of Consolidating with Sallie Mae Convenience, 1 monthly payment Possibility of lowering your monthly payment Consolidating with a name you know and trust—Sallie Mae Valuable borrower benefits that can save you hundreds, even thousands of dollars over the life of your loan Once you consolidate your loans, you can choose the repayment plan that suits your budget: standard, graduated, extended, or income-sensitive.

Sample Timeline Newer Stafford loans EOG FPDD 1.Make payments (Full or Interest-only) 2.Deferment (Economic Hardship?) 3.Forbearance (Internship/Residency?) Need to manage debt from this time period forward OSD Grad PLUS and Existing Consolidation loans Perkins loans EOG FPDD OSD – Out of School Date EOG – End of Grace Period FPDD – First Payment Due Date OSD (6 month grace period) (9 month grace period)

Remember Stay organized - open your mail! Log your contacts Call your Servicer or Financial Aid Office, address: if you: Have trouble with repayment Change your address or name

Questions and Quiz Prizes Thank You! Best Wishes for a Happy, Healthy and Prosperous Future!