2. Non-Profit organization Player in Student loan Origination and Servicing Outstanding customer service Default prevention

3. Federal Regulations Requirement Your school is unable to release your loan funds until you complete this session.

4. Agreement to pay back the loan(s) Multi-year feature vs. New promissory note per year Used for subsidized and unsubsidized Stafford loans –Subsidized : need based loan; gov’t pays interest while enrolled –Unsubsidized : non-need based loan; student pays for all interest Borrower rights and responsibilities detailed on MPN

6. Variable interest rates that change every July 1 st Capped at 8.25% Current rates as of July 1, 2005 –4.7% for In-school, grace & deferment –5.3% for Repayment & forbearance

7. Loan fees are automatically deducted from each disbursement –Originations fee : up to 3% –Guarantee fee : up to 1% Loans are disbursed in two installments –1 st installment @ the beginning of the enrollment period (e.g., beginning of the fall semester) –2 nd installment @ the midpoint of the enrollment period (e.g., beginning of the spring semester)

8. Student is responsible for updating the school/lender/servicer about the following changes:  Drop below half-time  Withdrawal from school  Transfer to another school  Change in graduation date  Address change  Phone number change  Name change (e.g., due to marriage)  SSN change Loan Cancellation:  You may cancel your loan anytime before lender sends money to school (before disbursement) Or  If loan reaches school, student has 14 days from the date on the disbursement notice the school sends to the student

9. Borrowing money is a serious matter and all loans must be paid back Not receiving payment coupons or payment schedule is not an excuse for not making payments Even if you don’t graduate or find a job, or you are dissatisfied with quality of education, you must pay back the loan(s).

10. First Payment is due after the 6 month grace period * Graduation * Enrollment of less than half time * Complete withdrawal from School

11. . Standard Plan Graduated Plan Extended Plan Income-sensitive Plan

12. Lender may sell or transfer loan Student will be notified of change of ownership Borrower rights do not change

13. Student Lender Servicer Secondary Market Guaranty Agency

14. Death of borrower Total and permanent disability of borrower

15. You have the right to defer your student loan payment if you submit proper documentation ! DEFERMENT: a period of time during which your lender temporarily suspends your regular payments

16. A period of time during which your lender temporarily suspends or reduces your loan payments. –Usually granted to borrowers without deferment eligibility –You are responsible for all interest that accrues during forbearance –Interest may be paid as it accrues during forbearance or may be added to your principal

17. Allows borrowers to combine one or more federal educations loans You can consolidate once you are in school, in-grace or in repayment. Original loans are paid in-full –New loan is created for the combined balance –Only one payment each month –New terms –New interest rate that is fixed for the life of the loan –You can receive a 10 year repayment option or more. Payment can increase up to 30 years. –You can receive deferment during consolidation of loans.

18. months past due or 270 days

19. You can be sued You will be reported to the National Credit Agencies Your wages may be garnished Your Federal Income Tax Refund may be withheld

20. You will be ineligible for future Federal Financial Aid You will be liable for all costs associated with the collection of your loan Lottery winnings may be withheld The renewal of any professional or occupational license may be denied

21. You are entitled to a repayment period of at least 5 years as long as you meet the monthly minimum payments. You have the right to repay all or any part of your loan at any time without penalty. You are entitled to ask your Lender/Holder/Servicer/School/Guarantor any questions about your student loan.

22. http://ombudsman.ed.gov 1-877-557-2575 1-512-219-4502, in Texas

23. Sources of Income for College Students  Grants & scholarships  College work-study or part-time job  Student loans College Expenses Tuition & fees Books & supplies Rent or dorm Utilities & gas for your car Groceries or meal plan

24. Occupation Yearly Income $ 30,000 Yearly Income divided by 12 $ 2,500 Less Taxes -25% $ 625 Monthly Take Home Pay $ 1,875 Monthly Fixed Expenses: Rent Payment $ 650 Car Payment $ 350 Insurance Payment $ 100 Utilities Payment $ 100 Student Loan Payment $ 125 Food Expense $ 200 Total Monthly Expenses: ( $ 1,525 ) Take Home Pay Less Total Montly Expenses $ 350

25. Keep in mind when you will receive your loan funds –1 st time borrowers have a 30 day delay Keep track of how much you borrow every year in college Consider making interest and/or principal payments Remember that credit cards are also loans Be realistic about earnings after college Keep all your loan records Do not spend beyond your means-Lifestyle should be that of a college student, not a professional

26. Know your school’s Refund Policy Know your school’s requirements for Satisfactory Academic Progress –Know your school’s Appeals process Know your school’s Withdrawal procedures Know your school’s Packaging philosophy Contact your Financial Aid Office for more Information