1. Welcome to UMF!!! Fall 2007 Vital Information About You and Your Federal Student Loans

2. Items In Your Folder  Copy of Today’s Presentation  Student Loan Entrance/Exit Interview Checklist (check “Entrance”)  Helpful Information to Manage Your Student Loans  Repayment Estimator/Deferment Chart  Credit Cards: Use Wisely!  Understanding Your Credit Score  Funding Education Beyond High School

3. Our Staff is Ready To Assist You  Barbi Castonguay  Chris Deon  Ernestine Hutchinson  Jennifer Hutchinson  Judy Jewell  Ron Milliken  Debbie Moody  Kimberly Trider-Grant  Shirley Yankura Merrill Center, 224 Main Street Monday - Friday 9:00AM - 4:30 PM (207) 778-7100 umfaid@maine.edu http://financialaid.umf.maine.edu http://financialaid.umf.maine.edu

4. How You Got To This Point  Filed a Free Application for Federal Student Aid (FAFSA) for 2007-2008  Received UMF Financial Aid Award Letter  Requested a Federal Stafford Loan or a Federal Perkins Loan  Completed a Master Promissory Note for a Federal Stafford Loan or a Perkins Master Promissory Note

5. Purpose Of Loan Entrance Counseling  Federal regulatory requirement for Stafford borrowers who have not previously received a Stafford Loan at UMF  Learn and/or review vital loan information  Prerequisite to receiving Stafford Loan funds on your student account

6. Methods To Complete The Stafford Entrance Loan Counseling Requirement  Participate in this session and submit the white copy of the Stafford Loan Entrance/Exit Interview Checklist before leaving the meeting  Go on-line to: http://financialaid.umf.maine.edu/loancounsel.php http://financialaid.umf.maine.edu/loancounsel.p

7. Basics For New Borrowers  Federal Perkins Loan  Federal Subsidized Stafford Loan  Federal Unsubsidized Stafford Loan  Federal PLUS Loan  Alternative Loan (The Maine Loan, Signature Loan, etc.)  Educators For Maine Loan  Federal Direct Loans What are some examples of educational loans?

8. Basics For New Borrowers  Fixed Federal Interest Rate: 6.8% for loans disbursed on or after July 1, 2007  Made by banks, credit unions, savings and loan associations, etc.  Insured by government agencies (FAME) and reinsured by the Federal Government  There is no credit check required for a Stafford Loan, nor any credit scoring, for eligibility for this type of loan What Is A Stafford Loan?

9. Basics For Borrowers  Subsidized (based on need; some interest is subsidized by the Government)  Unsubsidized (you are responsible for the interest that accrues) What Types Of Federal Stafford Loans Are There?

10. Basics For Borrowers Example Of How Stafford Loan Eligibility Is Calculated Cost$ 15,000 - Family Contribution$ 8,000 - Other Aid $ 3,000 = Eligibility for subsidized$ 4,000 Note: Loan cannot exceed grade level amount. e.g., $ 3,500 for first year students.

11. Basics For Borrowers Constraints to understand - Federal Stafford (or Federal Direct) Loan Limits (for subsidized and unsubsidized) Annual loan limits until July 1, 2008 First year:$ 3,500 Second year:$ 4,500 Third year:$ 5,500 Fourth year:$ 5,500

12. Basics For Borrowers Constraints To Understand Loan Fees (up to 3%) $3,500.00 x 3% = $105.00 Net loan amt = $ 3,395.00 Some lenders deduct no loan fees. If lenders deduct fees from the gross loan amount allotted to each semester before the net loan funds are sent to UMF, then: Fall net loan: $1750 (gross) - 52.50 (fees) = $1697.50 Spring net loan: $1750 – 52.50 = $1697.50 Annual net loan: $3500 – 105.00 = $3395.00

13. Basics For Borrowers  Deferment  Forbearance  Cancellation Terms And Conditions

14. Basics For Borrowers Rights  Copy of Promissory Note, repayment schedule, and disclosure form  Grace period  Deferment and cancellation provisions  A repayment period of up to ten years  Prepayment without penalty  Be informed if your loans are sold or managed by a servicing organization

15. Basics For Borrowers Responsibilities  Keep your lender informed  Use your funds for educational expenses for your loan period  Meet satisfactory progress standards  Know UMF’s refund policy  Pay your loan on time including any accrued interest

16. Stafford Loan Cancellation Provisions Borrowers total and permanent disability or death – 100% Forgiveness Full-time teacher for five consecutive years in a designated elementary or secondary school serving students from low-income families – Up to $5000 Bankruptcy (in rare cases) – 100% if a court rules that repayment would cause undue hardship Highly Qualified Teachers – math or science in secondary schools and special education in elementary schools – Up to $17,500

17. Stafford Loan Cancellation Provisions Closed School – 100% if the school closed before the student could complete their program of study or if the school issued a false loan certification School does not make the required return of loan funds to the lender – Up to the amount that the school was required to return

18. Perkins Loan Basics  The Perkins Loan program is need-based  Has a fixed 5% interest rate  UMF is your lender

19. Maximum Perkins Loan Amounts At UMF (Federal limits are higher) Residency 1 st Year Students Returning Students In-State$2,000$1,500 Out-of-State$2,500$2,000 New England Regional $2,500$1,750

20. Perkins Process  To accept a Perkins Loan offer, indicate your acceptance of the loan on your award letter.  A Perkins Master Promissory Note will be mailed to you for you to sign and return.  You must complete your Perkins Disclosure and Loan Information Sheet on WebDSIS.  www.maine.edu/dsis www.maine.edu/d

21. Perkins Disclosure and Loan Information Sheet Completion  Sign on to WebDSIS www.maine.edu/dsis www.maine.edu/d  Choose term: e.g. Fall 2007  Select Financial Aid from the links  Once in the Financial Aid section, select Perkins Loan from the bar of links  You will be directed to complete the online form which will require the home and work addresses and phone numbers for your parents  You will also enter the addresses and phone numbers for four references (not parents) who must all have different addresses

22. Perkins Repayment  You have a nine (9) month grace period after either graduating, dropping below half-time (six credits), or leaving school  You may be eligible for a deferment or forbearance  Cancellation options are available

23. Some Examples Of Perkins Loan Cancellation Options  Borrower’s death or permanent disability  Teaching in designated school systems or in certain fields in areas with a teacher shortage  Working as a law enforcement officer

24. Who To Talk To About Your Perkins Loan  While you are enrolled at UMF, direct your questions to the Financial Aid Office (207)778-7100.  When you are in repayment, direct all Perkins Loan questions to the Loan Processing and Receivables Management Office at Orono. You may call (207) 561-3444 or 1-800-308- 6148.

25. Receiving Your Stafford or Perkins Loan Funds  Loans are generally divided in half and issued once per semester  Net amount after origination fees  Electronic Funds Transfer (EFT) to your UMF account or you sign your check that is co-payable to you and UMF - you will be contacted by our Student Accounts staff. Credits in excess of charges are refunded by check – usually on Mondays and Wednesdays on the week following the credit balance by Student Accounts staff in the Merrill Center

26. UMF’s Refund Policy On Tuition Withdrawn From All Classes Prior to End of Second Week 100% Tuition and Fees From Above to End of 5th Week 50% Tuition and Fees From Above to End of 8th Week 25% Tuition and Fees After the 8th Week 0%

27. Avoid Delinquency And Default  Delinquency means non-payment of your loan when due  Default means non-payment for 270 days  97% of Maine students have repaid their loans

28. Consequences Of Default  FFEL loans cannot be eliminated through bankruptcy  Results in poor credit rating that may impact ability to get other credit for cars, homes, etc.  Ineligible for future student aid  Federal and state taxes withheld  Enormous hassle

29. Personal Financial Plan Set Up A Personal Budget  Know your weekly, monthly, semester, and annual expenses  Establish a personal budget  Stick to your budget!

30. Personal Financial Planning  Be wary of credit card debt  Pay off credit card balance every month  “Freshmen who rack up a $1000 credit card bill and pay only the minimum amount each month will finish their bachelor’s degree, complete a masters program, begin earning a living, and still have 3 1/2 years to go to finish paying off that freshman year spending spree. And that assumes no purchases beyond the initial $1,000.” Source: William Stafford

31. Know Your Loan Who Is Your Lender? Name Address How To Contact How Much Do You Currently Owe? How Much Do You Plan To Borrow In The Future For Education?

32. Borrowing Can Be Good!  Helps pay immediate bills and expenses  Enables focus on academics and graduation  Increases earnings potential by facilitating more education  Reduces financial worries  Good repayment = good credit rating

33. Too Much Debt Can Be Bad  Reduces your spending possibilities  Limits ability to save for the future  Additional stress

34. Four Years Of Pizza On A Stafford Loan = Financial Indigestion  Initial Cost Per Pizza: $15 Total Pizzas: 208 Total Pizzas: 208  Total Cost: $3,120  Interest Rate: 8.25% (maximum rate) Number of Payments: 120 Number of Payments: 120  Total Cost: $5,729  Total Interest Paid: $2,609  Final Cost Per Pizza: $28

35. Maintain Your Loan Folder  Keep borrower copy of Promissory Note  Keep loan disclosures from your lender  Keep directions  Keep all correspondence from your lender  Keep a log with good notes of all phone calls and relevant events

36. Check It Out…Now And Annually  With NSLDS (National Student Loan Data System), federal student loans can be checked online  http://www.nslds.ed.gov http://www.nslds.ed.gov  Contact NSLDS for your PIN at http://www.pin.ed.gov http://www.pin.ed.gov  Check out the Student Guide at  http://studentaid.ed.gov/guide/ http://studentaid.ed.gov/guide/

37. Basics For Borrowers Loan Application Process In Review  Submit a FAFSA  Financial Aid Award Letter  Select a Lender and Loan Amount (if Stafford)  Read and Sign Promissory Note with rights and responsibilities

38. Loan Consolidation  Allows you to combine several types of federal student loans with various repayment schedules into one loan with one monthly payment  Currently has a fixed interest rate  Payments may be lower if you opt for an extended payment period (though this will increase your overall interest paid)

39. Loan Consolidation  Contact your lender for information regarding consolidation  If you receive unsolicited consolidation information, we suggest contacting your Stafford lender if you’re considering consolidating your loans  All students can consolidate their loans during the grace and repayment periods.

40. Drawbacks to Consolidation  Significantly increases the total cost of repaying the loan  Loss of borrower benefits or cancellation privileges of the individual loans involved  You cannot undo consolidation

41. Use E-mail and Web DSIS  Activate your maine.edu email address and, if necessary, use the forwarding feature  Check WebDSIS regularly for information about financial aid, registration, and billing  http://www.maine.edu/dsis/  Get help from the Help Desk at the UMF Computing Center at extension 7300