Student Financial Aid Presentation

Loan Availability,
Repayment and
Forgiveness 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 programs

After 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 college
students through a program called Federal Direct
Student 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 Programs
In 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 Loans
Parent 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) Loans
National Science and Mathematics Access to Retain Talent Grant
(SMART)


• 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 bachelor's or professional degree.


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 student's financial need.
Both subsidized and unsubsidized federal student loans are
guaranteed 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 no
payments are due until 6 months after graduation or 3 months after the
borrower becomes a less-than-full-time student without graduating.


Parent PLUS Student Loans
The Parent PLUS Student Loan is available to parents of students
enrolled 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.


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 student's 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 forgiveness
programs.
Verify repayment or forgiveness options before using these programs.


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 the
government website: http://www.ed.gov/studentaid


Federal Perkins Loan
The 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.


Finding Scholarships & Building Credit
You don't need to be one of the students
who don't 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 federal
repayment & 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!


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.


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.


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
undergraduate
If you're attending school at least half-time, you have 9 months after
you graduate, leave school, or drop below half-time status before
you must begin student loan repayment (you might have longer than
9 months if you're 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.


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 by
institutions & 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 training
and/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)


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
repayment
10-30 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.


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 repayment
10-30 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.


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 FFEL
Loans, you can choose this plan for the FDLP Loans but not for the FFEL Loans. If
you have $32,000 in your FFEL Loans, then you could use this program for both
your FFEL Loans & your FDLP Loans.


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 FFEL
Loans, you can choose this plan for the FDLP Loans but not for the FFEL Loans. If
you have $32,000 in your FFEL Loans, then you could use this program for both
your FFEL Loans & your FDLP Loans.


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 LOANS
CONTAINING PARENT PLUS LOANS ARE NOT ELIGIBLE FOR THIS REPAYMENT
PLAN.


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 that
accrues 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.


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.


• “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.


To encourage students to pursue certain careers,
the federal government has created many programs
that can forgive some or all of a borrower's 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/


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


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 safety

Law enforcement Public education Public library services

Public interest law services School library or other school-based services

Early childhood education (including licensed or regulated health care, Head Start, and state-funded
prekindergarten)
Public service for individuals with disabilities and

Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time
professionals engaged in health care practitioner occupations
http://studentaid.ed.gov/students/attachments/siteresources/factsheet_PSLF.pdf

As a full-time teacher, you may qualify
for complete cancellation of your Perkins loans
and 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 serves
low-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.


If you provide child care in an eligible
facility that serves a low-income community,
some or all of your undergraduate FFEL Program
or 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.


• 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 Nurses

Early childhood educators Librarians Teachers

Child Welfare worker Police Officers Dentist

First Responders Legal Advocates Counselors

Emergency Management STEM Employees Firefighters

Physical & Occupational Therapists Emergency Medical Technician Elder Care

Other Law Enforcement/Public Safety Foreign Language Specialists Prosecution
Officers

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 can
complete 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 Education's 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.

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