Office of Student Financial Management
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
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
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
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
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?
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
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
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
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
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).
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
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
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
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
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
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
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
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
Sign up for Income Based Repayment
Keep documentation of your qualifying
employment
Submit the Employment Certification Form
annually
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
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:
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
Budget Control Act of 2011 (August 2011)
Congress eliminated subsidized loans for
graduate students beginning with loans borrowed
for the 12-13 academic year.
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
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
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
Loan Repayment and Consolidation
▪ Monday, April 16th, 12-1pm and 4:45-5:30pm
▪ Tuesday, April 17th, 12-1pm
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
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