1. Objectives for Today Review Federal Direct Student Loans
How many loans do I have and where are they?
Repayment Plans
What if I don’t pay? Consequences of default
When and how to get help from your servicers/lenders
Be successful and repay your loans.

2. Review Federal Student Loan Programs

3. Federal Student Loan Programs
William D. Ford Direct Loan (Direct Loan) Program Loans:
Direct Subsidized Loans
Direct Unsubsidized Loans
Direct Graduate PLUS Loans (for graduate/professional students)
Federal Family Education Loan Program (FFEL) Loans:
Subsidized Federal Stafford Loans
Unsubsidized Federal Stafford Loans
Federal Graduate PLUS Loans (for graduate/professional students)

4. Loan Definitions Loan: Grace Period: Lender:
The money borrowed from a lending institution or the Department that must be paid back.
Grace Period:
The six-month grace period after you graduate, leave school, or drop below half-time enrollment in which you are not required to make payments towards your loans. Have you used your grace period?
Lender:
The organization that made the loan initially for you which could be a bank, credit union, or the Department of Education.

5. Loan Definitions, Continued
Loan Holder:
This is the institution that holds your loan and promissory note and has the right to collect money from you.
Loan Servicer:
The company that maintains the loan for the lender. This organization will send bills, interest statements, disclosure statements, and any other necessary paperwork.
National Student Loan Data System (NSLDS):
The Department of Education’s central location that contains information about your federal student loans.

6. Loan Definitions, Continued
Deferment:
A deferment is a period of time during which your lender will temporarily suspend your regular payments.
Forbearance:
If you are unable to make your scheduled payments, but do not meet the criteria to qualify for a deferment, the lender/loan holder may allow you to reduce the amount of your payment.
Collection Agency:
Company that will make all attempts and/or litigation to recover defaulted student loans.

7. Loan Definitions, Continued
Master Promissory Note (MPN):
MPN is the legal contract between you and the lender (Department of Education)
Your promise to repay the loans even if you do not complete your education or are otherwise unhappy with the education you have received.
Effective for loans from multiple years

8. Subsidized Vs. Unsubsidized
Non Need-Based
Interest begins accruing the day the loan is disbursed. The interest can be paid while you are going to school or capitalized
Subsidized
Need-Based
No interest is accruing while you are in school
NOTE: Payment of principle for Subsidized and Unsubsidized begins six months after you have either graduated, dropped below half time, or withdrew.

9. Different Loan = Different Terms
*Standard Repayment Plan. Other repayment plans are available.

10. My Loans
Check out the National Student Loan Data System for students (NSLDS)
Check your loan records
Check with your lender
Check with the financial aid office
Watch letters/ s from Loan Servicer, etc.
Check your credit report

11. National Student Loan Data System (NSLDS)
Need your Federal PIN number
If you do not have your Federal PIN, it can be obtained at

12. Repayment Plans

14. Paying on Your Loan
You have the option to prepay all or part of your federal student loans before your repayment begins (without penalty).
Make payments before they are due or pay a little more each month.
Contact loan servicer to make sure extra payment is applied to principal balance.
Paying extra each month can reduce total cost of loan over time.

15. Standard Repayment Equal monthly payments Payment term of 10 years
Minimum payment of at least $50 per month
1An unsubsidized Stafford loan at 6.8% interest, with a 10-year amortized repayment plan

16. Other Repayment Options
Graduated Repayment Plan
Extended Repayment Plan
Income-Based Repayment Plan
Income-Sensitive Repayment Plan
Income Contingent Repayment Plan

17. Graduated Repayment Plan
Payments start out low and then will increase every two years
Payment term of 10 years
Loan Amount
Beginning Monthly Payment
Ending Monthly Payment
Total Interest Paid
Total Paid (Loan + Interest)
$10,000
$56.67
$159.63
$4,726.70
$14,726.70
$30,000
$170.00
$478.88
$14,179.62
$44,179.62

18. Extended Repayment Plan
Eligible if you received loans after 10/7/1998 and have over $30,000 in federal student loan debt.
Repayment term may be as long as 25 years
Minimum payment is at least $50 per month
Monthly payments may be fixed or graduated
1 An unsubsidized Stafford loan at 6.8% interest, with a 25-year amortized repayment plan.

19. Income- Based Repayment Plan
Monthly payment is capped at an amount that is affordable based on your income and family size
Must reapply each year
Payment term is years
May qualify for cancellation for any outstanding balance on loans after 25 years

20. Income-Sensitive Repayment Plan
Repayment option available only to borrowers who have FFELP loans
Monthly payments are based on income and total loan amount
Repayment term is 10 years
Must reapply each year

21. Income-Contingent Repayment Plan
Repayment option available only to borrowers who have Federal Direct Loans
Monthly payments are based on income and family size
Repayment term is 25 years
Must reapply each year for this repayment plan
Unpaid portion may be discharged with possible tax liability

22. Loan Consolidation One lender and one monthly payment
Flexible repayment options
Reduced monthly payments
Fixed interest rate
Subsidized, Unsubsidized, Graduate PLUS, and Perkins Loans are eligible for consolidation
Check with Lender for Private student loans

23. Loan Forgiveness Opportunities
Public Service Loan Forgiveness
Borrowers who hold a public service job may be eligible to have a portion of their Direct Loan debt forgiven after making 120 payments.
Visit the following website for more information
Teacher Loan Forgiveness
Borrowers who teach in an elementary or secondary school that is classified as low income might be eligible to have a portion of their student loan debt forgiven

24. Loan Servicers Federal Loan Servicing (PHEAA)
Great Lakes Educational Loan Services Inc.
Nelnet
Sallie Mae
Department of Ed Student Loan Servicing (ACS)
Note: For a complete list of loan servicers, refer to the list that was sent to you in the mail by Student Financial Services.

25. What will my payments be?
Payments on Federal Direct Loans will be based on your actual Direct Loan debt level
The minimum payment on your Federal Direct Loan will depend on payment plan

26. Loan Repayment Examples

27. Money-Saving Tips
Sign up to make your monthly payment via automatic debit (ACH) instead of by check
Pay on time

28. Tax Benefits for Education
A tax credit reduced the amount of income tax you may have to pay.
American Opportunity Credit
Hope Tax Credit
Lifetime learning Tax Credit
A deduction reduces the amount of your income that is subject to tax which then reduces the amount of tax you would have to pay.
College Tuition & Fees Deduction
Student Loan Interest Deduction

29. What If I don’t Pay? The Consequences of Default

30. Consequences of Default
Ineligible for future financial aid
Difficulty in obtaining credit
Seizure of tax refunds, wages and/or property
Collection agency or other legal action
Loss of deferment or monthly payment options
Your entire loan balance will be due in full immediately
You may not be able to obtain a professional licensure or get hired by an employer who performs credit checks

31. Debt Management
Total Monthly Income
Rent
Student Loans
$2100
$700
$220
Electric
$60
Heat
$100
Cable/Phone/Internet
$120
Food
$500
Entertainment
$150
Credit Card Payment
Transportation (car payment, gas, insurance)
$400
Savings
$50
Total:
-$300
Your Educational Loan Payments should be considered fixed expense like rent and food!

32. When and How to Get Help!

33. Contact your Lender/Servicer
Experience repayment difficulty
Need a deferment or forbearance
Change employer or employer address

34. Your Lender/Servicer Will Want to Help
If you are experiencing repayment difficulties there are things your Lender or Servicer can do to help you out.
Deferment
Forbearance
Change your repayment plan
Loan cancellation