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How To Get A Law Degree In D.L.A.S.D.U.S

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(1)

Office of Student Financial Management

(2)

We advise prospective, current, and former Denver Law students

on:

 General financial aid questions

We do not process student loans, that’s the Office of Financial Aid in University Hall

 Denver Law scholarship opportunities

▪ We manage the Named and Endowed Scholarship Process

 Financial literacy and debt management including:

▪ Budgeting

▪ Loan repayment & consolidation

▪ Loan forgiveness

(3)

College Cost Reduction and Access Act (CCRAA)

Income-Based Repayment (IBR) program for federal

student loan borrowers

Public Service Loan Forgiveness program for those

who are employed in qualifying public service jobs

Signed into law in 2007

(4)

Monthly loan payments can be reduced

significantly for borrowers selecting the IBR

option

▪ Payments can be as low as $0

▪ Payments don’t have to cover accruing interest

Pay until balance is repaid OR until 300

payments have been made (25 years)

▪ Remaining balance is cancelled

▪ For those working in Public Service jobs, debt can be

(5)

Payments are determined by:

Adjusted Gross Income & family size, not loan balance

▪ Monthly Payment =

 For 2011, 150% of the federal poverty level for a family of 1 in the 48 contiguous states is: $16,335

To qualify for IBR, a borrower must have a partial

financial hardship, meaning:

 IBR Monthly Payment < Monthly Payment on Standard Repayment Plan

 Generally speaking, a borrower qualifies if their AGI is less than their loan debt upon entering repayment

(6)

Which loans are eligible?

 All federally guaranteed student loans, except Parent PLUS loans and Federal Perkins Loans (except those Perkins Loans that have been consolidated)

Are there employment requirements to

qualify for IBR?

(7)

Employment statistics for 2010 Denver Law graduates

Just over 40% were employed in public service

▪ $50,860: average salary*

 $42,020: estimated monthly take-home pay

▪ $41,600: 25th percentile*

 $35,075: estimated monthly take-home pay

(8)

AGI IBR Monthly Payment (family size = 1) 10 Year Monthly Payment $118,500 25 Year Monthly Payment $118,500 10 Year Monthly Payment $157,000 25 Year Monthly Payment $157,000 $40,000 $297 $1,394 $860 $1,864 $1,160 $50,000 $422 $1,394 $860 $1,864 $1,160 $60,000 $547 $1,394 $860 $1,864 $1,160 $70,000 $672 $1,394 $860 $1,864 $1,160 $80,000 $797 $1,394 $860 $1,864 $1,160 $90,000 $922 $1,394 $860 $1,864 $1,160 $100,000 $1,047 $1,394 $860 $1,864 $1,160

Day Division 3yr Cost of Attendance = $157,000 Average Denver Law

(9)

Borrowers paying under IBR may repay more, in the

long run, because of accumulated interest

 Interest that accumulates on the loans is not capitalized,

unless a borrower exits the IBR plan

If income increases significantly, IBR payment will too.

However, borrowers will never be required to pay more

than the amount calculated on a Standard 10 year

repayment plan, even if their IBR payment is calculated to be higher

This is not the best plan for everyone.

Borrowers with higher incomes or lower debt levels may

(10)

For married borrowers, the AGI used to calculate the

monthly payment is whatever is reported to the IRS

 This could be significantly higher than the borrower’s income alone

 A borrower can file “married filing separately” to use only his/her income

▪ However, this may have other tax implications (increased tax rate, limited deductions, etc.)

 Under current tax laws, any amount forgiven at the end of

300 IBR payments is considered taxable income

The first borrowers won’t be eligible for forgiveness until 2034, so this could change!

You have to submit documentation (typically your tax

(11)

Established by the CCRAA in 2007

Individuals working full-time in public service,

and repaying their eligible loans under

specific repayment plans can qualify to have

their remaining debt (interest and principal)

forgiven after 120 payments (10 years).

(12)

What does that mean…?

Working full-time

▪ The greater of:

▪ 30 or more hours per week, or

▪ whatever your employer considers full-time

▪ Can work in more than one job to meet 30 hr requirement

in public service

▪ Government (local, state, federal)

▪ Government contractors DO NOT QUALIFY

(13)

What does that mean…?

Repaying eligible loans

▪ Federal Direct Stafford loans (subsidized and unsubsidized)

▪ Federal Direct PLUS loans

▪ Federal Direct Consolidation loans

▪ Loans may be from undergrad or grad/ law school

Students who borrowed Perkins loans or loans through

the bank-based FFEL program (ended in 09-10), must

(14)

What does that mean…?

under specific repayment plans

▪ Standard 10-Year Plan

▪ Income Contingent Repayment Plan (ICR)

▪ Income Based Repayment Plan (IBR)

after 120 payments

▪ 120 payments do not need to be consecutive

Each payment must be made while meeting all the above requirements

(15)

You must be able to prove that you qualify for forgiveness

▪ The Dept of Ed has created a Certification Form that borrowers

can use to certify their employment

 Available at www.studentaid.ed.gov/publicservice

 Can be filed annually

 It is not mandatory – but we strongly recommend you use it!

▪ When you fill out the Certification Form for the first time, your

eligible loans will be transferred to FedLoan Servicing (if they are currently with another servicer).

▪ FedLoan Servicing will inform you of how many qualifying

payments you have made during the last year

(16)

To qualify for forgiveness, you must also be working

full-time in public service when:

▪ You apply for forgiveness

▪ Your forgiveness is granted

Amounts forgiven under PSLF do not count as

taxable income

Forgiveness is only granted after 10 years of working

in Public Service

▪ No partial cancellations

▪ The 10 years of service doesn’t have to be consecutive, you can take breaks but any payments made while not employed full-time in

(17)

John graduates with $150,000 in loan debt with an interest

rate of 7.6% and gets a job that pays $50,000 to start

▪ Standard 10-Year Payment: $1,788 ▪ Extended 25-Year Payment: $1,118 ▪ Initial Payment under IBR: $422

 Assuming a 5% increase in income per year:

▪ IBR Payment after 10 years: $705 ▪ IBR Payment after 25 years: $1,603

Amount repaid:

▪ Standard 10-Year Repayment: $214,604 ▪ Extended 25-Year Repayment: $335,480 ▪ IBR (10 Year): $66,400

▪ IBR (25 Year): $273,615

Amount forgiven (unpaid interest and principal):

▪ IBR 10 Years: $197,600

(18)

Make sure you have the “right” loans

Go to

www.NSLDS.ed.gov

▪ Any loans labeled as “Direct…” qualify for PSLF

▪ Any loans labeled not labeled as Direct, need to be

consolidated before they will qualify

(19)

Consolidate if necessary

You can consolidate after you finish school

Go to

www.LoanConsolidation.ed.gov

to

consolidate

Consolidation takes at least 4-6 weeks to process

▪ Once you consolidate, your grace period ends and repayment begins

(20)

Sign up for Income Based Repayment

Keep documentation of your qualifying

employment

Submit the Employment Certification Form

annually

(21)

Purpose:

 To enable and encourage committed students to accept

lower paying public interest legal positions by providing forgivable loans to help repay those students’ law school debt.

Requirements:

▪ 501(c) (3); government

▪ Must be position that utilizes grad’s legal skills

▪ AGI of $75,000 or less

(22)

Awards are renewable for up to 5 years if still in qualifying employment Awards are competitive and an application must be submitted

Application is available each January online Deadline is the 4th Friday of January each year

 Applicants are encouraged (though not required) to be enrolled in IBR  Website:

(23)

In addition to those scholarships offered at admission,

continuing students have the opportunity to apply for

our Named Scholarships.

▪ 2 Application periods – February (most awards made) and September/October

▪ For the 2011-12 academic year, we had over $500,000 to award in supplemental scholarships

▪ About $150,000 of this goes to students who have a demonstrated interest in public service

Scholarship criteria vary based on donor requirements

(24)

Budget Control Act of 2011 (August 2011)

Congress eliminated subsidized loans for

graduate students beginning with loans borrowed

for the 12-13 academic year.

(25)

Early Implementation of a more beneficial

IBR plan

Plan was scheduled to go into affect for students

who first borrowed loans after 7/1/2014

This initiative moves up the implementation date

to 2012

Details of who exactly will qualify have not been

made available

▪ Should be available in the next couple of months

(26)

To qualify for the new IBR plan, a student:

Must not have borrowed a federal loan prior to

2008

▪ Most likely, this will mean no loans borrowed

prior to July 1st, 2008

Must have at least one loan borrowed in 2012

▪ Most likely, this will mean a loan borrowed

after July 1st, 2012

(27)

 The new plan differs in 2 ways from the current IBR plan:

 Reduces the % of AGI that is paid toward student loans each year to 10% (from 15%)

▪ Payments reduced by 1/3rd

 Cancellation of remaining debt is available after 240 payments/20 years (instead of 25 years)

AGI Current IBR

(28)

Loan Repayment and Consolidation

▪ Monday, April 16th, 12-1pm and 4:45-5:30pm

▪ Tuesday, April 17th, 12-1pm

(29)

Student Financial Management:

 www.law.du.edu/financial-aid

Income-Based Repayment & Public Interest Forgiveness:

 www.ibrinfo.org

 www.equaljusticeworks.org

 www.askheatherjarvis.com

 www.studentaid.ed.gov/publicservice

Loan Repayment Calculators:

 www.finaid.org/calculators

 www.edfund.org/loancalculator

 www.ibrinfo.org/calculator.php

Loan Consolidation:

 www.loanconsolidation.ed.gov

Federal Student Loan History:

 www.nslds.ed.gov

 www.pin.ed.gov

Other Websites:

 www.ombudsman.ed.gov/about/contactus.html

(30)

Contact us:

 Email: FinancialManagement@law.du.edu

Phone: 303.871.6557

Web: www.law.du.edu/financial-aid

Hours: Monday – Friday, 8:00am – 4:30pm

Current students, to set up an appointment with Lacey McFall:

 Login to your TWEN account

Under My Courses select “Financial Management Advising” Under Navigation select “Appointments With Lacey”

Select the week you would like to make an appointment (there are

usually 2 up at a time)

Select Sign-up for the time slot that works for you (these are

References

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