Loan Availability, Repayment andForgiveness programs Teresa Spurgin Action Research Project Masters Science of Education Keiser University EDR610 JUNE 29, 2012
Thank you for participating in this research project! This research is being conducted to collect information about how much you currently know about student financial aid loan availability, repayment, and forgiveness programsAfter this presentation, you will be asked to take the survey again to determine if this presentation was successful in aiding you in understanding more about student financial aid loan availability, repayment and forgiveness options available. Please do not participate in this research if you are not an undergraduate. Also, please remember that participation is strictly voluntary and you can stop participating at any time.
U.S. Department of Education provides loans to collegestudents through a program called Federal DirectStudent Loan Program (FDLP).These loans are intended to provide funds for: tuition & fees room & board books & school supplies transportation technology needs necessary dependent care http://www.studentloannetwork.com
Federal Student Aid ProgramsIn fact, the federal government provides 75 % of all available student aid. It makes sense to know as much as possible, about federal financial aid programs. The largest and most familiar federal student aid programs are: Pell Grant Stafford Loans Perkins LoansParent PLUS Direct Loan Graduate PLUS Loan Work-Study Program Direct Graduate PLUS Loan Academic Competitiveness Grants (ACG) Supplemental Educational Opportunity Grant (FSEOG) Parent Loan for Undergraduate Students (PLUS) LoansNational Science and Mathematics Access to Retain Talent Grant (SMART) http://www.studentloannetwork.com
• The Federal Pell Grant program is the largest • need-based student aid program. • According to the College Board, an estimated • 3.7 million undergraduates received Pell Grants. • For many students, these grants are the foundation • of their financial aid package.• Pell Grants are only awarded to undergraduate students who have not earned a bachelors or professional degree. http://www.studentloannetwork.com
Federal Stafford Student Loans Stafford Student Loans are federal loans made to college and university students to supplement personal & family resources, scholarships, grants, and work-study. They may be subsidized by the U.S. Government or may be unsubsidized depending on the students financial need. Both subsidized and unsubsidized federal student loans areguaranteed by the Department of Education either directly or through guarantee agencies. Nearly all students are eligible to receive a Stafford Student Loan regardless of credit score or other financial issues. Both types offer a grace period of 6 months, which means that nopayments are due until 6 months after graduation or 3 months after the borrower becomes a less-than-full-time student without graduating. http://www.studentloannetwork.com
Parent PLUS Student Loans The Parent PLUS Student Loan is available to parents of studentsenrolled at least part-time in a program included within a formal list of participating post-secondary institutions. PLUS loans differ from other federal student loans like the Stafford and Perkins loans in that it can cover a larger amount of the cost of education, has a higher interest rate and the commitment is undertaken by the parent, rather than the student. PLUS Loans are also available for graduate and professional students. Caution: These loans do not qualify for all loan repayment or forgiveness programs. Verify repayment or forgiveness options before using these programs. http://www.studentloannetwork.com
Graduate PLUS Loans The Graduate PLUS Loan is similar to the Parent PLUS Loan in the way it is an unsubsidized, federally guaranteed loan, up to the cost of education. This loan is taken out in the graduate students name, on their own signature and credit rating. Federal loan deferment and forbearance options are the same as the Stafford Loan so graduate and professional students can postpone repayment while enrolled at least half-time in a degree or certificate program.Caution:These loans do not qualify for all loan repayment or forgivenessprograms.Verify repayment or forgiveness options before using these programs. http://www.studentloannetwork.com
Federal Student Loan Consolidation After graduation, many students have a series of federal student loans (and payments),through the Stafford, PLUS or Perkins programs. When you consolidate federal student loans into one single loan you realize a reduced monthly payment (up to 53% less),a longer repayment term, and a fixed interest rate. To consolidate federal student loans, visit thegovernment website: http://www.ed.gov/studentaid http://www.studentloannetwork.com
Federal Perkins LoanThe Perkins Loan is a low-interest student loan for undergraduate and graduate students. In the case of Perkins Loans, the college acts as the lender, drawing funds from a small pool of money provided by the federal government.Perkins Loans are awarded based on exceptional financial need.A Federal Perkins Loan is a low-interest (5%) Federal student loan for both undergraduate and graduate students with exceptional financial need. You must repay this loan to your school and the loan will be disbursed in at least two separate payments during the academic year. http://www.studentloannetwork.com
Finding Scholarships & Building Credit You dont need to be one of the students who dont get all the financial aid they need. http://www.ed.gov/fund/grants-apply.html http://www.studentscholarshipsearch.com/ Building a good credit rating can help secure lower interest rates for private student loans, if your federal student loans do not cover all of your expenses. Opening a student credit card with small credit limit is a great way to start building credit history. CAUTION: Private Student Loans are not covered by the federalrepayment & forgiveness programs. Private lenders can be hard to deal with and hard to repay. Use them with extreme caution and research them completely. Make sure all federal funds are used first! http://www.studentloannetwork.com
Direct Stafford Loans for Undergraduates There are two different types of Direct Stafford Loans for Undergraduate students, subsidized and unsubsidized.Federal Direct Subsidized Loans are awarded based on financial need. No interest will be charged before you begin repayment or during periods of deferment.The federal government "subsidizes" the interest during these times.Federal Unsubsidized Direct Loans are not awarded based on financial needs.Any eligible student can take out unsubsidized Direct Stafford Loans. http://www.studentloannetwork.com
Direct Stafford Loans for Undergraduates Interest will be charged from the time the loan is disbursed, to the time the loan is repaid in full. The amount that can be borrow is based on your grade level and status as a student.Independent students may be eligible to borrow more because they are paying for college without assistance from family. It is important to note that even if a student is financing their education on their own,dependency status is still determined by the school. http://www.studentloannetwork.com
Perkins Loan Borrowing Limits & Repayment $4,000 for each year of undergraduate study the total amount you can borrow as an undergraduate is $27,500 $8,000 for each year of graduate or professional study the total amount you can borrow as a graduate/professional student is $60,000, including any Federal Perkins Loans you borrowed as an undergraduateIf youre attending school at least half-time, you have 9 months after you graduate, leave school, or drop below half-time status beforeyou must begin student loan repayment (you might have longer than 9 months if youre on active duty with the military). This period of time is called a grace period.At the end of your grace period, you must begin repaying your loan. You may be allowed up to 10 years to repay. http://www.studentloannetwork.com
Best source of information is the website for federal student loans. http://www.ed.gov/studentaid http://www.myfedloan.org http://studentloannetwork.com Another good source of information is the institution you wish to attend. Check out several institutions since you may qualify for additional scholarships & grants connected to different institutions. High school counselors usually have information sent to them byinstitutions & they usually have additional information specific to your community or area of study.Also, check out professional associations related to your field of study Beware of private or for-profit schools which may mislead you.
Going to college or technical schools to get trainingand/or degrees is one of the most important decisions of your life! Treat this decision with respect and research information on the institution & the costs connected with your educational pursuit! Federal Law requires all educational facilities, both private & public to provide a total cost estimate of your training or education. Know the repayment & forgiveness options available Be prepared to take care of your responsibility upon graduation and employment.
There are 7 Federal Repayment Programs: 1) Standard Repayment 2) Graduated Repayment 3) Extended Fixed Repayment 4) Extended Graduated Repayment 5) Income-Based Repayment (IBR) 6) Income-Contingent Repayment (ICR) 7) Income-Sensitive Repayment (ISR) http://www.myfedloan.org
Standard Repayment is the fastest and most cost-effective repayment plan. The minimum monthly payment under this plan is $50. Payments of principal and interest remain the same throughout repayment10-30 years maximum based on the balance for Consolidation Loans 10 years maximum for all other loan types If you can’t afford your payments, choose another plan that fits your budget. No need to apply for this program since you automatically start repayment on this plan. http://www.myfedloan.org
The Graduated Repayment Program allows for lower payments to start, which gradually increase over time. Use this plan if a smaller monthly payment would be helpful in the beginning. Payments start lower and then increase later in repayment10-30 years maximum based on the balance for Consolidation Loans 10 years maximum for all other loan types Monthly Payment amounts varies throughout repayment program. This program assumes that your income will grow enough to afford increasing payments. Initial payments mainly cover interest, not the principal balance. http://www.myfedloan.org
If there is more than $30,000 in outstanding FDLP (Federal Direct Loan Program) or FFEL (Federal Family Education Loan Program)Loans, this plan allows extension of the repayment term up to 25 years for those programs for which your balance exceeds $30,000. Use this program when there is a lot of debt, but none of the other repayment plans work for the student. Payments of principal & interest remain the same throughout the repayment program. Small changes may occur if interest is capitalized any time during the repayment period. Payments are lower because the maximum repayment period is extended. Longer repayment period means higher interest costs.EXAMPLE: If you have $35,000 in outstanding FDLP loans & $10,000 in FFELLoans, you can choose this plan for the FDLP Loans but not for the FFEL Loans. Ifyou have $32,000 in your FFEL Loans, then you could use this program for bothyour FFEL Loans & your FDLP Loans. http://www.myfedloan.org
If there is more than $30,000 in outstanding FDLP (Federal Direct Loan Program) or FFEL (Federal Family Education Loan) Loans, this plan allows for extension of the repayment term up to 25 years for those programs for which the balance exceeds $30,000. Use this plan if there is a lot of debt, but none of the other plans work for the student. Payment amounts varies during repayment program because initially payments are lower & then increase to larger payments. Monthly payments are lower because the maximum repayment period is extended. Longer repayment period means higher interest costs.EXAMPLE: If you have $35,000 in outstanding FDLP loans & $10,000 in FFELLoans, you can choose this plan for the FDLP Loans but not for the FFEL Loans. Ifyou have $32,000 in your FFEL Loans, then you could use this program for bothyour FFEL Loans & your FDLP Loans. http://www.myfedloan.org
Use this program when there is little or no income & mounds of student loan debt, Based on individual adjusted gross income (or with spouse’s, as applicable), including family size, and state of residence. Monthly payment maybe less than the interest that accrues each month. Monthly payment maybe as low as $0, and monthly payments are recalculated annually. This program may extend the repayment period past the standard 10 years to the maximum 25 years. Offers loan forgiveness after 25 years once you make the equivalent of 25 years qualifying monthly payments. DEFAULTED LOANS, PARRENT PLUS LOANS, OR CONSOLIDATED LOANSCONTAINING PARENT PLUS LOANS ARE NOT ELIGIBLE FOR THIS REPAYMENT PLAN. http://www.myfedloan.org
ICR calculates monthly payments based on individual adjusted gross income (and spouse’s income, if married), family size, and the total amount of eligible loan debt. Use this program if worried about monthly payments and need some flexibility. Monthly payments will initially be at least the interest thataccrues each month until your official payment amount is calculated. Then it maybe less than the interest that accrues each month. Monthly payment maybe as low as $0. This plan requires you to provide documentation annually. Maximum repayment plan is 25 years. This plan offers loan forgiveness after 25 years once you make the equivalent of 25 years of qualifying monthly payments. FFEL LOANS ARE NOT ELIGIBLE FOR THIS REPAYMENT PLAN. http://www.myfedloan.org
Under this plan, monthly payments are based on total monthly gross income, and student must re-apply annually. Use this program when worried about monthly payments and need some flexibility. Monthly payments must at least cover the interest that accrues each month. This plan is more expensive in the long run because the principal is repaid at a slower rate. DIRECT LOANS ARE NOT ELIGIBLE FOR THIS PROGRAM. http://www.myfedloan.org
• “A deferment or forbearance lets you temporarily postpone loan payments.” (http://www.myfedloan.org/) • When having trouble making student loan payments, • The student might qualify for payment relief through a deferment. • A deferment is a temporary suspension of federal student• loan payments for specific situations, for a specific period of time. • Forbearance is a way to temporarily postpone or • reduce your student loan repayment for a set period time. • This typically takes place because the borrower is experiencing financial difficulty, but can be requested for any of the following reasons:• Unemployment, Partial Disability, or Other documented hardship.• Even if the borrower is ineligible for a deferment, he/she can still receive a forbearance. http://www.studentloannetwork.com
To encourage students to pursue certain careers, the federal government has created many programs that can forgive some or all of a borrowers student loan debt.Some of these programs overlap, and plan specifics change frequently. For the latest, most complete information about loan forgiveness, Visit: http://studentaid.ed.gov/ You can qualify for loan forgiveness by: •Volunteering with AmeriCorps, Peace Corps or VISTA •Joining the military•Working for the federal government or any state, local or tribal government •Working for a nonprofit organization •Teaching in underserved communities •Providing child care services in underserved communities •Serving in an Area of National Need http://www.ecmc.org
• Volunteering with a qualifying entity can make • a direct impact on your student loan debt. • Here are the specific programs & contact information • for participating volunteer organizations. • AmeriCorps | 1-800-942-2677 • Serve 12 months and you are eligible to receive $4,725 for your loans. • Peace Corps | 1-800-424-8580• Receive deferments for Stafford, Perkins and Consolidation loans, • plus partial forgiveness of Perkins loans; • 15% per year of service up to 70% of your loan total. • Volunteers in Service to America (VISTA) | 1-800-942-2677• Provide 1700 hours of service and you are eligible to receive $4,725 for your loans or a modest stipend. This program is administered through AmeriCorps. http://www.ecmc.org/details/loanForgiveness.html
• Each branch of the service has its own loan forgiveness program. • Critical positions often qualify for a higher amount of loan forgiveness. • For details, contact an armed forces recruiter or visit them online. • •U.S. Army has numerous funding options• http://www.goarmy.com/benefits/education-benefits/money-for-college.html • •U.S. Army National Guard has many resources http://www.nationalguard.com/benefits/money-for-college • •U.S. Navy has a very interactive website with lots of information http://www.navy.com/joining/education-opportunities.html • •U.S. Marine Corps offers a variety of options• http://www.marines.com/being-a-marine/benefits/-/benefits/detail/BENEFITS_EDUCATION • •U.S. Air Force has a variety of programs http://www.airforce.com/benefits/enlisted-education/ http://www.ecmc.org/details/loanForgiveness.html
If you are a public servant, you may qualify for Public Service Loan Forgiveness. • Make payments through either the Income-Based Repayment (IBR) • or Income-Contingent Repayment (ICR) plan for 10 years. • After that time, any remaining student loan debt is forgiven. • Use this program when there is high student loan debt and low income. • Key features of Public Service Loan Forgiveness:• •The repayment term is 10 years, with payments through IBR or ICR • •Must be a full-time public servant • •After 10 years, any remaining student loan debts are forgiven• •Deferment and forbearance periods do not count toward the 10 years http://www.ecmc.org/details/loanForgiveness.html
A government organization: including a federal, state, local, or tribal organization,agency, or entity; a public child or family service agency; or a tribal college or university A non-profit, tax-exempt organization under section 501(c)(3) of the Internal Revenue Code includes most not-for-profit private schools, colleges, and universities A private, non-profit organization (that is not a labor union or a partisan political organization) that provides one or more of the following public services:Emergency management Military service Public safetyLaw enforcement Public education Public library servicesPublic interest law services School library or other school-based servicesEarly childhood education (including licensed or regulated health care, Head Start, and state-fundedprekindergarten)Public service for individuals with disabilities andPublic health (including nurses, nurse practitioners, nurses in a clinical setting, and full-timeprofessionals engaged in health care practitioner occupationshttp://studentaid.ed.gov/students/attachments/siteresources/factsheet_PSLF.pdf
As a full-time teacher, you may qualify for complete cancellation of your Perkins loansand up to $17,550 in forgiveness for qualifying Stafford loans (both FFEL Program and Direct Loan Program borrowers).The key requirement is that you teach at a school that serveslow-income students. You can search for qualifying schools online. For details on loan forgiveness for teachers, visit the Federal Student Aid web pages The American Federation of Teachers maintains a state-by-state list of additional forgiveness programs for teachers.Visit the American Federation of Teachers website for details. http://www.ecmc.org/details/loanForgiveness.html
If you provide child care in an eligible facility that serves a low-income community, some or all of your undergraduate FFEL Programor Direct Loan Program Stafford loans may be forgiven. For more information, contact the Child Care Provider Loan Forgiveness Program support desk of the Federal Student Aid offices toll-free at 1-888-562-7002. http://www.ecmc.org/details/loanForgiveness.html
• The U.S. Congress designates certain occupations as Areas of National Need. If you work in one of these areas, you may qualify for $2,000 of loan forgiveness for each year you work in the field. • You may claim up to 5 years of service for a total of $10,000.Speech-Language Pathologists Audiologists NursesEarly childhood educators Librarians TeachersChild Welfare worker Police Officers DentistFirst Responders Legal Advocates CounselorsEmergency Management STEM Employees FirefightersPhysical & Occupational Therapists Emergency Medical Technician Elder CareOther Law Enforcement/Public Safety Foreign Language Specialists ProsecutionOfficers And the list goes on… http://mappingyourfuture.org/paying/loanForgiveDetails.htm
• There are other circumstances under which debt can be forgiven.• Here are a few of those reasons:• Closed School – school closed before your program completion• Death – the student for whom the money was borrowed died• Disability – total and permanent disability• False Certification – if the school falsely certified your eligibility• False Certification – identity theft• Spouses & Parents of September 11, 2001 Victims• http://mappingyourfuture.org/paying/loanForgiveDetails.htm
If you treat your student financial aid like the other subject areas you study, you can learn about the many opportunities available. As you can see there are many opportunities for funding, repayment, and forgiveness programs. Be Responsible & Be Smart Investigate your total estimated educational costs & seek funds to not only pay the basics but to cover living expenses so that you cancomplete your education so that you can get a job and repay your loans. Help is out there! Information is out there! Don’t let the lack of information stop you from succeeding. Be a smart consumer!
Keep all documents from FASFA in a notebook or file.Keep all statements and loan agreements in the same file. Go to the federal website: https://www.nslds.ed.gov/nslds_SA/SaFinShowSummary/ (National Student Loan Database for Students) To get a list of all your federal loans Research all you options for federal funding and use them! Do not take out alternative or private loans unless it is unavoidable!
• http://www.hrsa.gov/loanscholarships/repayment/nursing/• (Health Resources and Services Administration)• http://www2.ed.gov• (Official U.S. Department of Education)• http://www.ed.gov/fund/grants-apply.html• (Department of Education Grants)• http://www.studentscholarshipsearch.com/• (Free Scholarship Search funded by Student Loan Network)• http://www.fafsa.ed.gov/• (Free Application for Federal Student Aid)• http://www.knowhow2go.org/• (American Council on Education, Lumina Foundation for Education & Ad Council)
In Conclusion…. Please take the Exit Survey now that you have watched this informational presentation. Please answer all questions. Thank You for Participating in this Action Research Project on Student Financial Aid Information
• http://www.studentloannetwork.com• https://www.nslds.ed.gov/nslds_SA/SaFinShowSummary• http://mappingyourfuture.org/paying/loanForgiveDetails.htm• http://www.ecmc.org/details/loanForgiveness.html• http://studentaid.ed.gov/students/attachments/siteresources/factsheet_PSLF .pdf• http://www.ecmc.org• http://www.ed.gov/studentaid• http://www.myfedloan.org Additional information on Student Loan Network & the ECMC Foundation is expanded on the following slides.
• ECMC Foundation:• As a nonprofit corporation providing services in support of higher education finance, we assist students and families in their efforts to plan and pay for college.• For many low-income students, college seems out of reach.• We challenge that attitude with innovative education programs and scholarships that help low-income, first-generation college-bound students plan for college, succeed academically and achieve their dreams.• Although legislation was passed in 2010 requiring all new federal loans to be issued under the Federal Direct Loan Program, we continue in our guarantor role by sponsoring programs to help students and families plan and pay for college.• We work with schools and loan servicers to lower student loan default rates, promote financial literacy and provide resources to support student loan borrowers to successfully repay their loans.• We are the U.S. Department of Educations designated bankruptcy servicer and have been since 1994.• We built a unique, uniform and comprehensive bankruptcy operation that protects the federal fiscal interest and supports borrowers as they work through the bankruptcy process.
• “Student Loan Network educates students and parents on the best federal and alternative student loans and loan consolidation. Our goal is to provide you with the necessary knowledge and products to finance your education.” • This researcher chose to use this website as the main information reference due to the user-friendly approach and readability. The government website is more technical & hard to understand. •• The same information is available on the government website called Federal Student Aid: http://studentaid.ed.gov/• Be aware that the Student Loan Network is a private website • not associated with the federal government. • It offers information about Federal Student Loans and Private/Alternative loans. • Use caution when using any website not connected • with the federal government, be a smart consumer.