Managing Your Student Loan Payments
May 2015 Graduates
1
1.
2.
3.
4.
5.
6.
Bar Exam Expenses
Locating Your Loans / Account Numbers
Student Loan Repayment Plans
Loan Consolidation – Should You? When?
Examples
SALT MONEY.ORG Office of Enrollment Services
March 2015
Bar Exam Expenses – Timely Filing
2
New Jersey
Bar Exam Fee
$ 575
Laptop Fee
$
0*
Bar Prep Course @ $3,150
Living Expenses
?
($2,000 a month?)
* Laptop Fee only if late filing.
New York
Bar Exam Fee
$ 250
Laptop Fee (?)
$ 100
Bar Prep Course @ $3,150
Living Expenses
?
($2,000 a month?)
Total if taking NJ/NY: $4,075 + Living Expenses
NJ Bar Exam Fees
3
BAR EXAM APPLICATIONS
Filing
Deadline
Timely
First Late
Final
Deadline
February Exam
July Exam
Fees
Oct 1 – Oct 31 March 1 – March 31
$575
Nov 1 – Nov 15
April 1 – April 15
$850
Nov 16 – Nov 30 April 16 – April 30 $1,100
NJ Bar Exam Fees - LAPTOP
4
LAPTOP REGISTRATION (NJ)
LAPTOP Filing February Exam
Deadline
@ opening of
Dec 4
Laptop Reg.
Timely
Dec 4 – Jan 3
July Exam
Fees
May 1
May 1 – May 31 $ 0
First Late
Jan 3 – Jan 10
June 1 – June 8
$ 75
Final Deadline
Jan 10 – Jan 17
June 9 – June 16 $150
Bar Study Loan – Borrow Conservatively
5

May be borrowed for the cost of bar exam, prep‐course and living expenses



Your 2014‐15 Financial Aid Budget can be increased for Bar Exam Fee ‐
‐ if paid while enrolled (increase to Grad Plus Loan)
Complete Loan Adjustment Form with copy of paid Bar Exam fees
Bar Study Loan
6

Private Loan with Variable Interest Rate 
Credit Check 
Excluded from Federal Loan Consolidation

Max loan is $15,000 (depending upon lender)

School certifies the loan 
Funds are disbursed directly to the student
7
Start here to locate Federal Loans
www.nslds.ed.gov
**Contact Loan Servicer for Acct. No.**
Federal Loan Servicer
Aspire Resources Inc.
CornerStone
ESA/Edfinancial
FedLoan Servicing (PHEAA)
Granite State – GSMR
Great Lakes Educational Loan Services, Inc.
MOHELA
Nelnet
OSLA Servicing
Sallie Mae - Navient as of 2/2014
VSAC Federal Loans
Contact
1-855-475-3335
1-800-663-1662
1-855-337-6884
1-800-699-2908
1-888-556-0022
1-800-236-4300
1-888-866-4352
1-888-486-4722
1-866-264-9762
1-800-722-1300
1-888-932-5626
Deferment
8



Deferment: Temporary suspension of student loan payments for a defined period of time for borrowers meeting criterion.

Application Required

Recertification required for subsequent periods of deferment
Types of Deferment

Unemployment

Military Service

Post Active Duty Student Deferment
Interest Accrual
Subsidized Loans: Interest free during AUTHORIZED period of deferment
 Unsubsidized Loans: Interest continues to accrue

 Deferment does NOT impact Credit rating
Forbearance
9

Forbearance: Temporary postponement OR reduction of student loan payments due to financial difficulty

Application required

Interest Accrual


Interest accrues on all federal loans in forbearance

Borrower responsibility

Unpaid interest capitalized at the end of forbearance
Forbearance does NOT impact credit rating
Federal Loan Repayment Plans
10
Standard
Graduated
IBR/PAYE
Extended
Income
Contingent
Repayment Estimator:
https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action
Federal Loan Repayment Options
11
Standard
• 10 Year Repayment Term
• Fixed monthly payment
• Automatic UNLESS changed by borrower Graduated
• Up to 10 years
• Monthly payment increase every 2 years Extended
• Minimum of $30,000 federal student loan debt
• Up to 25 year repayment term
• Two types • FIXED: fixed monthly payment amount
• GRADUATED: Payments increase gradually every two years
12
IBR / PAYE
Payment Plans Based on your Income
Repayment plans that make your payments more affordable based on: • amount of debt, • family size, • state of residence, • AGI (w /spouse if married filing jointly)
 Borrower must experience partial financial hardship  Accrued Interest on Subsidized Stafford not covered by payment – paid by gov’t for first 3 years
 Stafford, Graduate Plus and Federal Consolidation loans
 Both are eligible plans for PS Loan Forgiveness after 10 years in Public Service Payment Plans based on Your Income
13
Income Based (IBR)


Caps your payment to 15%
of your discretionary income.
Balance forgiven after 25 years (taxable)
Pay As You Earn (PAYE)
 Caps your payment at
10% of discretionary
income
 Balance forgiven after 20
years (taxable)
Discretionary Income: the difference between your AGI
and 150 percent of the poverty guideline for your family
size and state of residence.
Partial Financial Hardship –
14
If the payment calculation for the standard 10-year plan exceeds
the amount listed here (D),
- then you have a partial financial hardship and are eligible for
these plans.
Example of Partial Financial Hardship, Household size 1, AGI = $60,000
A
B
C
D
E
2014
Poverty
Levels
150% of
Poverty
Level
Discretionary
Income
(AGI – B)
Annual Loan
Payments
Equated to
Monthly
Payment
IBR
$11,670
$17,505
$42,495
$6,374 (15% of C)
$531
PAYE
$11,670
$17,505
$42,495
$4,250 (10% of C)
$354
Minimum Loans for
Partial Financial Hardship
15
Income
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
IBR Min Loans
$13,866
$24,728
$35,590
$46,452
$57,314
$68,176
$79,038
$89,900
$100,762
PAYE Min loans
$9,245
$16,486
$23,727
$30,968
$38,210
$45,451
$52,692
$59,934
$67,175
PAYE Eligibility
16

New borrower as of Oct. 1, 2007,
 Had
no outstanding balance on a Direct Loan or FFEL
Program loan as of Oct. 1, 2007, or
 Had no outstanding balance on a Direct Loan or FFEL
Program loan when you received a new loan on or
after Oct. 1, 2007.

Must have received a disbursement of a Direct Loan
on or after Oct. 1, 2011.
Income Contingent
Another Payment Plan Based on your Income
17


An option if you don’t qualify for IBR or PAYE
Based on
 adjusted
gross income,
 family size, and
 the total amount of your Direct Loans

Monthly payment = the lesser of
 the
amount you would pay if you repaid your loan in 12
years multiplied by an income percentage factor that
changes with your annual income or
 20 percent of your monthly discretionary income.
And if I become Rich and Famous?
18


May no longer be experiencing Partial Financial
Hardship
May choose to leave IBR or PAYE
 Loans
become due by end of prior repayment plan –
but may switch

May choose to stay in IBR or PAYE
 Pay
original 10 year amortized payment
 But
may take longer than initial 10 years to repay
Public Service Loan Forgiveness 19
1.
2.
Right Type of Loans: FEDERAL DIRECT LOANS ONLY
Right Type of Payment: 120 of them
•
•
3.
Full‐time Paid Work: •
•
4.
at least 30 hours per week
Full‐time requirement can be met between two positions
Qualifying Position: •
•
•

IBR (can also do ICR or Standard Repayment), On‐time monthly payments, do not need to be consecutive
Government (except for government contractors), and 501(c)(3) Nonprofit, and
Some others (AmeriCorps/PeaceCorp, etc.)
Note: Amount Forgiven is not taxable.
Receiving Public Service Loan Forgiveness
20
1.
2.
3.
4.
5.
6.
Document, document, keep track of eligibility
Annually, complete the Employment Certification for Public Service Loan Forgiveness Form.
www.studentaid.ed.gov/publicservice Submit form to FedLoan Servicing, the PSLF servicer.
After 120th payment, submit the PSLF application.
Remain employed in Public Service until loan is forgiven
Public Service Loan Forgiveness is non‐taxable
Federal Loan Consolidation 21
Federal Loans only: 10-30 year repayment
www.studentloans.gov
Considerations:
 Fixed Interest Rate – Weighted average, rounded up to nearest 1/8 of 1% (no cap)
 Amount of Interest Paid over Life of Loan
 Grace Period
 Perkins
 PS Loan Forgiveness??
 May Choose Servicer (PHEAA, Great Lakes, Nelnet, Sallie Mae)
Education Tax Benefits
22

The Lifetime Learning Tax Credit
 Up to $2,000 per tax return (not per student)

Tuition and Fees Tax Deduction


Can reduce taxable income by as much as $4,000
Student Loan Interest Deduction
 Can reduce taxable income by as much as $2,500
IRS Publication 970 Tax Benefits for Education http://www.irs.gov/pub/irs‐pdf/p970.pdf Checklist
23
1. Know what loans you have borrowed
(www.nslds.ed.gov)
2. Determine if you need funding for Bar Expenses
3. Complete Student Loan Exit Counseling
(www.studentloans.gov )
4. Determine if Consolidation is Right for You
(www.studentloans.gov)
5. Private Loan Borrowers – Contact your Lender
Recap/ Resources
24








nslds.ed.gov
www.ibrinfo.org finaid.org/ibrcalculator
www.studentloans.gov
www.studentaid.gov
www.studentaid.gov/publicservice
www.askheatherjarvis.com
www.annualcreditreport.com
SALT – WHAT IS SALT? {saltmoney.org} – an online tool that
helps you track your loans and build money knowledge
25
SALT CREATED BY AMERICAN STUDENT ASSISTANCE
Know What You Owe
Loan Repayment Navigator
Learn Stuff {on your own time}
28
SALT CREATED BY AMERICAN STUDENT ASSISTANCE
SALT Registration –
**Register by May 21 for a chance to win a diploma frame!
**Winner of the Raffle to be announced the morning of graduation.
Questions?
30



Stop by to make an appointment to discuss your personal situation
Karen Sokol
Cassandra Hunter
973‐642‐8850
[email protected]