Financial Aid Informational Seminar What You Need to Know

Financial Aid Informational Seminar

What You Need to Know

• Federal Loan Basics

• Changes to Federal Loans

• Amount of Eligibility and your Refund

• IAP - Financial Impact

• FA Email Notifications

• Loan Repayment Basics

Who do I contact if I have financial questions?

If your question is pertaining to your financial aid application, your budget, or the amount you should borrow, please contact:

1(800) 899-6337

Financial Aid

Diane Beltrani Director of Financial Aid Ext. 1224

Tami Vecchio Associate Director Ext. 1230

Laura Raygada Financial Aid Counselor (A - D) Ext. 1227 Laura Faylo Financial Aid Counselor (E - KO) Ext. 1228 Kara Johnston Financial Aid Counselor (KR – PE) Ext. 1349 Michele Wulfken Financial Aid Counselor (PH – U) Ext. 1391 Cynthia Lessing Assistant Director (V - Z) Ext. 1364 Christine Cathcart Clinical Financial Aid Counselor (A-C & P-Z) Ext. 1417 Lynda Hanley Clinical Financial Aid Counselor (D – O) Ext. 1393 Angela Kuhlmeier Student Health Insurance Ext. 1232 Beth Cohen Loan Specialist for Canadian students Ext. 1237 Registrar Enrollment Verification / Deferments

enrolmentchanges@sgu.edu

The e-mail address for the Financial Aid Department is faid@sgu.edu

Student Finances

If your question is pertaining to your refund check, the balance of your account, or your student account bill, please contact:

1(800) 899-6337

Valerie Cascio vcascio@sgu.edu Ext. 1268

Changes to Federal Loan Benefits

•President Obama signed the Bipartisan Student Loan Certainty Act of 2013 which changed the interest rate structure of federal student loans

•Loans became annual fixed rate loans

•Interest rate established each year based on 10 year Treasury note plus an index, then fixed for the life of the loan

•Rate change for loans disbursed after July 1, 2013

Unsubsidized Loan - 5.41% Grad PLUS loan - 6.41%

•Loan origination fees

Unsubsidized Loan – 1.072%% Grad PLUS loan – 4.288%

Direct Unsubsidized Loan

• Payments not required while enrolled at least half-time (5 credits)

• Interest will accrue while in school

– No prepayment penalty for payments made while in school – You can pay the interest monthly/quarterly

– Interest will be capitalized at repayment if you defer interest

– Capitalized interest means the unpaid accumulated interest will be added to the total amount owed

• 2013 – 2014 Interest rate: fixed 5.41% • One-time Grace period: 6 months

Direct Grad PLUS Loan

– No prepayment penalty for payments made while in school – You can pay the interest monthly/quarterly

– Interest will be capitalized at repayment if you defer interest

– Capitalized interest means the unpaid accumulated interest will be added to the total amount owed

• 2013 – 2014 Interest rate: fixed 6.41%

• Credit-based: Borrower must not have “Adverse Credit”

– You are considered to have an adverse credit history if: • You are 90 or more days delinquent on any debt

• Within 5 years of the date of the credit report, you have been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Federal Student Aid debt (for example, a Direct Loan or Federal Stafford Loan)

Private Educational Loans

• Interest rate and repayment terms vary • Eligibility requirements vary

– Credit check

– Low debt-to-income ratio

– Co-signer, if borrower does not have a credit record • Cannot be consolidated with federal loans

• Not eligible for any federal repayment or forgiveness programs • Consider for “Selectives”, or MPH/MSc coursework

Grace Period

• The grace period is the period of time between

your last day of attendance and the date your first

payment is due.

– Subsidized/Unsubsidized loans: one full 6 month period – Perkins loans: 9 months

• Before the end of the grace period, your lender or

servicer will contact you to inform your first

payment is due

– Make sure contact information is current with your loan servicer!

What is a Loan Servicer?

A loan servicer is a company that collects payments on a loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a loan on behalf of a lender. We encourage you to enroll in an online account with your servicer:

• Make online payments

• View loan balance details

• Change repayment plans

• Request loan deferment / forbearance

• Update contact information

• Other tasks related to your federal student loan Current Federal Loan servicers include:

• Great Lakes Education Loan Services, Inc.

• Nelnet

• PHEAA/FedLoan Servicing

• Sallie Mae

If you are not sure who your loan servicer is, you will be able to view the name and contact information of the servicer associated with each of your federal student loans on the National Student Loan Data System

National Student Loan Database

(NSLDS)

• NSLDS is a repository of all of your federal loans

principal balance (OPB) of the loan.

– ED PIN, DOB, and SSN are needed to access your account

– NSLDS does not provide information on private loans

Interest Capitalization

•Capitalization

•The practice of adding unpaid interest charges to

the principal balance of an educational loan, thereby increasing the size of the loan

•Interest is then charged on the new balance, which includes both the unpaid principal and the accrued interest

•Capitalization may occur when: -The loan enters repayment

-The loan exits deferment -The loan exits forbearance

• Interest on most loans accrues from the date funds are disbursed until the loan is paid in full • Capitalization is the addition of unpaid accrued interest to the principal balance of a loan.

The less frequent the better

• Capitalization may occur more frequently for certain loans during forbearance

Tip: Students should consider asking family to help with interest if possible.

Interest Capitalization and Its Impact

Treatment of Interest During Forbearance Status Principle at Repayment Capitalized Interest During Forbearance Principle at end of Forbearance Payment Amount Total Amount Repaid Total Interest Cost Interest is paid as it accrues $50,000 $0 $50,000 $604.00 $72,479.87 $22,479.87 Interest is capitalized at end of status $66,129 $5,224 $71,353 $861.95 $103,433.57 $53,433.57

The chart provides estimates, for $50,000 in Grad PLUS loans from a 4 year program with a 7.9% interest rate, of the monthly payments due at the end of a 12 month forbearance

Individual Advancement Program (IAP)

Financial Considerations

• Tuition and Fees

– No change to tuition/fee charges in the term you are approved to enter IAP

– Will not be charged tuition when repeat courses in subsequent term – Administrative Fees are charged

• Changes to Financial Aid

– Since no tuition charge when repeating course(s):

• Loan amount to be reduced when repeating course (still eligible to borrow for living expenses)

• No scholarship for repeated term

– Since extending length of academic program, loan indebtedness will be increased

Budgeting

• Living without a budget is similar to traveling

across the country without a roadmap

– While both can be accomplished, the result is usually expensive and wasteful

• A good budget can help keep your spending on

track and even uncover some hidden cash flow

problems

Benefits of Budgeting

• Acts as a roadmap

– will outline where every dollar is spent

• Reveals waste

– When money is spent on non-budgeted items, budget shortfalls are created and can be corrected

• Aligns priorities

– Family discussions over the budget can reveal

differences in priorities that may often cause conflict – Conversations to address the underlying priorities will

correct the problems and reduce disagreements over money

Benefits of Budgeting

• Builds New Habits

– Working within the budget will shift actual expense from unnecessary categories into the most essential categories

• Reduces Stress

– Sufficient funds will exist to pay expenses when needed; no guessing or hoping!

• Controls Spending

– Provides a reality check so you can avoid situations where you tend to overspend. And ask yourself if you really need each purchase before you make it. Delay and postpone!

• Accelerates Financial Goals

Budgeting Tools

To Name a Few...

• Mint.com

– Free apps for smart phones /computers

• Studentloans.gov

• TG – Texas Guaranteed Loan Servicer Corp.

– TG offers resources to help students and families plan and prepare for college, learn the basics of money

management, and repay their federal student loans – http://www.tgslc.org/

• Mapping Your Future

Borrow Wisely

Borrow Wisely

• The average single student debtor is likely ineligible for the typical home mortgage due to their debt-to-income ratio

• Including a typical mortgage and other consumer debt, the average single student debtor has a debt-to-income ratio of .49

– This means they would pay about half of their monthly income toward student loans and mortgage payments

– would not qualify for an FHA loan or many private mortgages

• A similar typical single debtor in 2002 would have a debt-to-income ratio of .43; a 14% increase over the last decade

• For couples looking to buy a house, it is more difficult to qualify for a home mortgage when even one of the buyers has student debt, and even harder if both buyers have student debt

School of Medicine Budget

The information above outlines the Estimated Cost of Attendance for a student enrolled in January. Each academic year, you will have to complete a new FAFSA, and your maximum eligibility would be $20,500 in Federal Direct Unsubsidized loans. Your individual

budget may vary according to the term and may be adjusted for budget increases. Term 1 MD

Processing of your Loan Refund

• Funds disbursed 10 days prior to start of the term

• Refund issued approximately 3 business days after funds are credited to student account

• Direct Deposit available for expedient posting of funds to your bank account

• Refunds are sent to your mailing address unless you have set up direct deposit

• Questions regarding refunds, account balance or direct deposit should be addressed to Student Finances

• Email: billing@sgu.edu

• To change your refund mailing address, sign into to SGU Student Self-Service and go to “Personal Information” tab

In-School Deferment

• Postpones your loan payment

– Subsidized loans remain interest free

– Unsubsidized loans will continue to accrue interest

• May need to submit “In-school Deferment Form”

to our Registrar’s Office

– Available on your servicer’s website

– Private loan servicers may ask for an Enrollment Verification form

– SGU hopes to be a participant in National Student Clearinghouse by end of year

Tips for Managing Prior Loans

• Sign up for electronic notifications from your

servicers

• If you had a Perkins Loan from a prior school - a

separate deferment form is needed every 6 months

• Organize your loan information

SOM Satisfactory Academic Progress

(SAP)

• Federal regulations require that students who are

not in good academic standing are ineligible for

federal loans

• Not making academic progress means:

― Cumulative Weighted Mean Percentage Grade less than 70% ― Not removed from academic probation within one academic year

― Cumulative Weighted Mean Percentage Grade less than 73% by the end of Term 5

― have not earned at least 50% of attempted curriculum after first 2 terms of enrollment or have not earned at least 60% of their attempted curriculum thereafter

If You Are Not Meeting SAP

• Placed on “Financial Aid Warning”

• If not meeting SAP after FA Warning term:

– Not eligible for aid unless submit appeal to Financial Aid and appeal

• specifies the exceptional circumstances that lead to the poor academic performance and

• states what has changed that will allow the student to

If You Are Not Meeting SAP

If SAP appeal is accepted:

• Will be provided with an academic plan

• Must meet academic plan in order to receive

federal aid in future term

Leave of Absence

If a student must take a leave of absence during basic

science terms:

– Federal Loans will be prorated based on the number of days enrolled

– Tuition will be prorated

– Be mindful of timeline for SAP

– Reported to federal enrollment database as not enrolled

• Loans go into grace period

• If LOA is more than 6 months, no further grace period available

Those annoying email notifications

Take the action needed to resolve them!

• May need to sign Promissory Notes

• May need to provide Student Health Insurance Information

• May need to accept loan awards

• Office of Financial Aid may need to update our systems

Applying for 2014-15 Aid

• File 2014-15 FAFSA (www.fafsa.ed.gov) – SOM code: G22333

– SVM code: G39743

• Email notification of federal loan awards to be sent late April (Term 3/4 students), and May (Term 2 & 5 students) • Complete a new Master Promissory Note for both

Unsubsidized and Grad PLUS loans • Must be in good academic standing

• Must be “credit-worthy” for Grad PLUS approval

• Will need a new Health Insurance confirmation for new year (August 1st₎

SOM

Preparing for Clinicals and Residency

• No federal loans for period between end of Term 5

and start of clinical rotations

• Private Bridge Loan available as last resort • Plan ahead for Clinical living expenses

• Plan for expenses due to securing a Residency

• Loan Process is different in Clinical terms

Bridge Loan – Bank of Lake Mills

• Borrower must have completed their first two (2) years of medical school at St. George’s University*

• Borrower may apply with or without a co-signer

• Borrower must be the minimum age of majority based on the state of permanent residence at the time of application

• Minimum loan amount = $2,001.00

• Maximum loan amount = $8,000.00 (inclusive of fees netted from loan) • Borrowers and Cosigners must meet minimum FICO score and other credit

requirements

• Income requirements may apply • Interest Rate/Fees

• Variable Interest Rate, adjusted quarterly • An Origination Fee will apply

For additional information or questions, please call: (877) 716-5406

To Apply Go to: www.brazos.us.com/private/stgeorges

*The Bank of Lake Mills Medical Bridge Loan Program is not being offered, made or endorsed by St. George’s University. Bank of Lake Mills is not affiliated with St. George’s University. 1

Residency & Relocation Loans

Non-federal loans available to provide funds for graduating medical students who have expenses not covered by federal aid packages, including residency

expenses and relocation costs

• The loans can be applied for up to one year before or six months after graduation from medical school

• Your school is generally required to verify attendance – this is verified through the SGU Registrar’s office

• Loan funds are sent directly to the student

• Cannot be consolidated under a Federal Consolidation loan

• The loans are private loans from banks or other financial institutions • Eligibility is based upon a credit evaluation

• Deferment during residency – must request from the lender • Link to loans (Fast Choice):

Median SGU Student Loan Debt

• Based on 2012 Graduates

• Includes private, federal and institutional loans

• Borrowers can always prepay federal and private student loans without penalty

• Be aware of the relative cost and make payments towards unsubsidized loans that have the highest rates and/or most frequent capitalization

– This should save more money over time.

• Payments can be made online directly to your loan servicer • Unless otherwise noted, loan payments typically are

applied first toward late fees, then interest, and finally principle

Loan Repayment Options

•

• Income Driven Repayment Plans

o Income-Contingent Repayment (ICR) o Income-Based Repayment (IBR)

o Pay As You Earn (PAYE)

2 2

Repayment Plan Initial Monthly Payment

Long-term Monthly Payment

Total Interest Paid Years in Repayment

Standard $2,974.83 $2,974.83 $98,479.20 10.00

Graduated $1,464.83 $3,498.64 $112,525.70 10.00

Extended $1,794.18 $1,794.18 $279,752.90 25.00

Income Based-4 Yrs. $284.56 $2,974.83 $222,404.97 17.08

Income Sensitive $1,464.83 $2,974.83 $116,057.60 11.00

Pay as You Earn-4 Yrs. $189.71 $2,974.83 $137,727.07 14.83

Consolidation $1,698.16 $1,698.16 $352,838.81 30.00

Federal Loan Repayment Comparison

Assumes $138,500 in graduate Stafford Loans and $120,000 in Grad PLUS over a 4 year period. Stafford interest rates were at 6.8% and Grad PLUS interest rates were at 7.9%.

Loan Consolidation

• Combines federal loans into a single loan

• Pays existing loans in full and replaces

them with a new loan

• Acquires a new interest rate

• Increases repayment term up to 30 years,

depending on your loan balance

Loan Forbearance

• Temporarily postpones or reduces your monthly

payments

• Interest continues to accrue on all of your loans

• Servicers are required to grant mandatory

forbearance to residents through the duration of

their residency (approved in annual increments)

• Credit is not affected adversely

Income-Driven Plans

Overview

3 main income-driven repayment plans:

• Income-Contingent Repayment Plan (ICR) – 1994 • Direct Loan Program only

• More information available at StudentAid.gov/ICR

• Income-Based Repayment Plan (IBR) – 2009

• Available in both the Direct Loan and FFEL Program • More information available at StudentAid.gov/IBR

• Pay As You Earn Plan – 2012 • Direct Loan Program only

• New borrowers in FY 2008 who receive new loans in FY 2012

• Modeled on IBR, incorporating statutory IBR changes scheduled to take effect for new borrowers in 2014

Income-Driven Plans

Payment Amounts

• Under ICR, borrowers pay the lesser of:

• 12-year standard repayment schedule multiplied by income percentage factor (payment based on loan debt and income) or • 20% of discretionary income (payment based only on income)

• Under IBR, borrowers pay the lesser of:

• 15% of discretionary income (income-based payments) or

• What they would have paid under the 10-year standard repayment plan (non-income-based payments)

• Under Pay As You Earn, borrowers pay the lesser of:

• 10% of discretionary income (income-based payments) or

• What they would have paid under the 10-year standard repayment plan (non-income-based payments)

For more on income percentage factors in ICR, see 77 FR 30266, available at: https://federalregister.gov/a/2012-12420

Borrower 1 Borrower 2 Borrower 3 Borrower 4 Family Size 1 1 2 2 Monthly AGI* $0 $4,038 $4,038 $15,000 150% of Poverty Level $0 $1,396 $1,891 $1,891 X** $0 $2,642 $2,147 $13,109 15% of X $0 $396 $322 $1,966

Loan Amount Standard Monthly Payment Borrowers who quality for IBR

$150,000 $1,726.20 1, 2 & 3 $200,000 $2,301.61 All four borrowers

*The average first-year resident stipend for 2009 was $48,460. This amount will vary by region and specialty. **Difference between AGI and 150% of poverty level

Loan Forgiveness or Discharge

• Federal Loan forgiveness programs

– Federal government repays a portion of your loans

• Loan discharge (cancellation)

– Identity theft

– Death of borrower

– Total and permanent disability of borrower – School closure

• Contact servicer for more information about these

situations

Loan Payment Relief Options

• Federal Public Service Loan Forgiveness (PSLF)

•National Institute of Health (NIH)

How does Public Service Loan

Forgiveness (PSLF) work?

To be eligible for Public Service Loan Forgiveness

(PSLF) you must make 120 of the right kind of

payments, with the right kind of loan, while working

in the right kind of job.

Public Service Loan Forgiveness (PSLF)

• If you hold a public service job, you may be eligible to have a portion of your federal student loan debt forgiven

• This includes work in all 501(c)(3) non-profit organizations, including medical schools and teaching hospitals

• To qualify, you must meet eligibility requirements, which include: • 120 qualifying monthly payments on an eligible Federal Direct

Loan on or after 10/1/2007

• Employment in a public service job during the time the qualifying payments are made and at the time the loan is forgiven

Does your potential residency placement qualify ?

Loan Repayment/Forgiveness Programs

https://services.aamc.org/fed_loan_pub/index.cfm?fuseaction=public.welcome&CFID=7563505

AAMC has created a searchable data base that provides detailed information about many of the state and federal programs available to medical and other

NY Loan Repayment Program

Doctors Across New York (DANY) is a series of state-funded programs to help train and place physicians in a variety of

settings and specialties to care for New York's diverse population

DANY programs include:

– Physician Loan Repayment – including Residency Loan Repayment Tracks

– Ambulatory Care Training – and other initiatives

Physician Loan Repayment provides up to $150,000 in funding over a year period for physicians who commit to a

National Institute of Health (NIH)

• Part of the U.S. Department of Health and Human Services

• The primary federal agency for conducting and supporting medical research

• Offers five loan repayment programs to attract health professionals to careers in clinical, pediatric, health disparities, or contraception and infertility research

• In exchange for a two or three-year commitment to a research career, NIH will repay up to $35,000 per year of your qualified educational debt

• Basic eligibility requirements:

• Government research funding (federal, state, or local) or domestic nonprofit research funding

• Student loan debt equal to at least 20% of annual salary • U.S. citizen

Useful links

The Economics of Becoming a Doctor

Includes information on Income-Based Repayment and Public Service Loan Forgiveness, and a discussion of the economics of earning an M.D. degree

www.aamc.org/services/first - tools to manage student loan debt wisely

Medical Residents' Finances: A Strategic Approach to Managing Medical School Debt

This video highlights how federal student debt relief programs can help medical residents lower the cost of their student loan debt. An overview of the benefits of Income-Based Repayment and Public

Service Loan Forgiveness is also provided.

Useful links

A Strategic Approach to Managing Veterinary

School Debt

This video highlights the federal student debt relief

programs and repayment strategies available to

help veterinarians lower the cost of their student

debt and manage their liquidity.

ollow Us on Facebook!

www.facebook.com/SGUFinAid

• SGU Financial Aid deadline reminders and important information • Useful tips and tools for personal money management

• Relevant news articles regarding student loans and overall financial well-being • Financial Aid Counselor Contact information and useful website links

www.facebook.com/SGUFinAid

SGU Office of Financial Aid on Facebook

Who do I contact if I have financial questions?

If your question is pertaining to your financial aid application, your budget, or the amount you should borrow, please contact:

1(800) 899-6337

Financial Aid

Diane Beltrani Director of Financial Aid Ext. 1224

Tami Vecchio Associate Director Ext. 1230

Laura Raygada Financial Aid Counselor (A - D) Ext. 1227 Laura Faylo Financial Aid Counselor (E - KO) Ext. 1228 Kara Johnston Financial Aid Counselor (KR – PE) Ext. 1349 Michele Wulfken Financial Aid Counselor (PH – U) Ext. 1391 Cynthia Lessing Assistant Director (V - Z) Ext. 1364 Christine Cathcart Clinical Financial Aid Counselor (A-C & P-Z) Ext. 1417 Lynda Hanley Clinical Financial Aid Counselor (D – O) Ext. 1393 Angela Kuhlmeier Student Health Insurance Ext. 1232 Beth Cohen Loan Specialist for Canadian students Ext. 1237 Registrar Enrollment Verification / Deferments

enrolmentchanges@sgu.edu

The e-mail address for the Financial Aid Department is faid@sgu.edu

Student Finances

If your question is pertaining to your refund check, the balance of your account, or your student account bill, please contact:

1(800) 899-6337

Valerie Cascio vcascio@sgu.edu Ext. 1268