NYSFAAA 43 Annual Conference “Helping Students Catch Their Dreams” October 20, 2011 Christopher Alonzo- MCC Jan Scheutzow- Nazareth College Dorcia Ulysses-Diallo- SUNY Geneseo
Direct Loan Entrance Counseling ◦ Delivery Options ◦ Counseling Requirements ◦ Best Practices Direct Loan Exit Counseling ◦ Delivery Options ◦ Counseling Requirements ◦ Best Practices
Perkins Entrance Counseling ◦ Delivery Options ◦ Counseling Requirements ◦ Best Practices Perkins Exit Counseling ◦ Delivery Options ◦ Counseling Requirements ◦ Best Practices TEACH Grant Entrance/Exit Counseling
D irect Loan Entrance Counseling D irect Loan Entrance Counseling
◦ Must be completed prior to first disbursement of Stafford loans to first-time loan borrowers ◦ May be conducted in person, by audio visual presentation, or by interactive electronic means. Direct Loan Entrance Counseling brochure ( ◦ School must document completion of counseling
Comprehensive loan information ◦ Terms and conditions Current interest rate, grace period, first payment due date ◦ Rights and Responsibilities Explain the use of the Master Promissory Note ◦ Multi--year feature Explain interest and capitalization ◦ How interest accrues and is capitalized ◦ Option to pay unsubsidized interest while in school
Review repayment options ◦ Standard, Extended, Graduated, Income-Based Repayment, Consolidation Provide sample monthly repayment amounts ◦ Based on a range of student indebtedness or based upon average Stafford indebtedness of students at the same school or in the same program of study Stress importance of repayment Stress repayment is required regardless of educational outcome or employability Review deferments and forbearance
Describe consequences of default ◦ Adverse credit, collection costs, ineligible for deferments, seizure of state or federal tax refund, ineligibility of FSA funds Provide NSLDS information (purpose and how to access) Provide school contact for questions Stress importance of keeping the school/servicer informed of name, address, enrollment changes
Stress importance of good record keeping Discuss budgeting Remind borrower of Exit Counseling
Panel discussion of SUNY, Private and Community Colleges
Direct Loan Exit Counseling Direct Loan Exit Counseling
◦ Must be completed before Stafford and Grad PLUS borrowers graduate or within 30 days of notification of withdrawal or drop below ½-time status ◦ May be conducted in person, by audio visual presentation, or by interactive electronic means Direct Loan Exit Counseling brochure ( ) ◦ School must document completion of counseling
Review information from entrance counseling ◦ Consequences of default Adverse credit, collection expenses, litigation ◦ Importance of repayment obligation Regardless of dropping out, ability to find a job, or satisfaction with program ◦ Use of Master Promissory Note Review repayment options ◦ Standard, Extended, Graduated, Income-Based, etc Review plan features, sample payments, interest charges, total payments Review option to prepay without penalty and change repayment plans
Provide an average anticipated repayment amount on: ◦ His/her indebtedness ◦ Based upon a range of average student indebtedness
Provide loan consolidation information ◦ Effects of consolidation on total interest to be paid, option or prepay the loan or change repayment plans. ◦ Can be accessed at Discuss debt management strategies and tax benefits Review forbearance and discharge/cancellation options Inform student of NSLDS loan information Inform student of FSA Ombudsman Office
Ensure borrower understands their rights and responsibilities Collect and update personal and contact information ◦ Must send to DL Servicing within 60 days of exit School must document compliance of exit counseling
Panel discussion of SUNY, Private and Community Colleges
Perkins Entrance Counseling Perkins Entrance Counseling
◦ Must be completed prior to first disbursement of Perkins loans for the award year ◦ May be conducted in person, by audio visual presentation, by interactive electronic means, or by a third party provider Third-party providers such as Campus Partners SUNY schools – Student Loan Service Center ◦ School must document completion of counseling
Rights & Responsibilities under Perkins Loan Program Loan is for educational purposes only Loan must be repaid and the school holds the MPN ◦ Must notify student the amount of each Perkins disbursement made under the MPN, option to cancel disbursement or the loan Name & address of school to which debt is owed Name & address of servicing agent
Maximum annual and aggregate loan amounts Effect of accepting Perkins loan on other types of student aid Total Perkins indebtedness and estimated monthly payment Perkins consolidation and refinance options
Notice of Dept. of Defense program for repayment based on certain military service Complete list of Perkins charges – deducted or paid separately School will report balance of loan to national credit bureau annually Collect updated borrower information ◦ Name, address, phone, spouse, employer, references
Panel discussion of SUNY, Private and Community Colleges
Perkins Exit Counseling Perkins Exit Counseling
Upon withdrawal or drop below ½ time status - exit material must be mailed within 30 days of notice of withdrawal Completed prior to student graduating May be done in person, in groups, by audiovisual presentation, by interactive electronic means, or by third parties
Disclose pertinent repayment information Contact information to request a copy of MPN Contact information for school Contact information for servicer (which may be the same as the school)
Name and address to whom payments should be sent Estimated amount owed and repayment begin date Total interest charges paid per repayment schedule School must document Perkins exit completion
Panel discussion of SUNY, Private and Community Colleges
Entrance Exit via
Questions/Comments
Federal Handbook ◦ Volume 2; 2-80 to 2-84 ◦ Volume 6; 6-62 to 6-63; to 6-113