$mart Docs September 25, 2014

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$mart Docs

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 What are they?

 How do I qualify?

 How are my payments calculated?

 Why should I repay my loans under one of

these plans?

 When do I apply?

 Examples

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An income-driven plan is a student loan repayment plan that sets your monthly loan payment at an

amount that is intended to be affordable based on your income and family size.

There are three income-driven repayment plans:

1. Income-Based Repayment Plan (IBR)

2. Pay As You Earn Repayment Plan (PAYE)

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1. Did you borrow at least one

Federal Direct Loan?

2. Are you a “new borrower”?

3. Are you experiencing a partial

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Loan Type IBR Plan Pay As You Earn Plan ICR Plan

Direct Subsidized Loans Eligible Eligible Eligible Direct Unsubsidized Loans Eligible Eligible Eligible Direct PLUS Loans made to

graduate or professional students

Eligible Eligible Eligible

Direct Consolidation Loans that did not repay any PLUS loans

made to parents

Eligible Eligible Eligible

Subsidized Federal Stafford Loans (from the FFEL Program)

Eligible Eligible if consolidated into a Direct Consolidation Loan*

Eligible if consolidated into a Direct Consolidation Loan* Unsubsidized Federal Stafford

Loans (from the FFEL Program)

Eligible if consolidated into a Direct Consolidation Loan* FFEL PLUS Loans made to

graduate or professional students

Eligible if consolidated into a Direct Consolidation Loan* FFEL Consolidation Loans that

did not repay any PLUS loans made to parents

Eligible if consolidated into a Direct Consolidation Loan*

Federal Perkins Loans Eligible if consolidated into a Direct Consolidation Loan*

Eligible if consolidated into a Direct Consolidation Loan*

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 Interest rate is based on the weighted

average interest rate of the loans being

consolidated, rounded to the next nearest higher one-eighth of one percent.

 Fixed for the life of the Direct Consolidation

Loan.

 Note that consolidation is not always the

right choice for all borrowers or all loan types.

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 For IBR, you are a new borrower if you had no

outstanding balance on a Direct Loan or FFEL

loan when you received a Direct Loan on or after

July 1, 2014.

 For PAYE, you are a new borrower if you had no

outstanding balance on a Direct Loan or FFEL Program loan when you received a Direct Loan or FFEL Program loan on or after Oct. 1, 2007, AND you also received a disbursement of a

Direct Loan on or after Oct. 1, 2011.

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1. Determine the size of your household and

identify what 150% of the poverty line is for your family size.

2. Subtract the number (150% of the poverty line)

from your total household monthly adjusted

gross income (AGI).

3. Multiply that number by a percentage (see next

slide) to determine your monthly payment

amount.

4. This calculated amount must be less than what

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If your loan debt exceeds your

annual income, you will most

likely qualify for a

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Income-Driven Repayment Plan Payment Amount

IBR Plan for those who ARE NOT new borrowers on or after July 1, 2014.

Generally 15% of your discretionary

income, but never more than the 10-year Standard

IBR Plan for those who ARE new borrowers on or after July 1, 2014.

Generally 10% of your discretionary

Pay As You Earn Generally 10% of your discretionary

Income Contingent Plan The lesser of the following:

20% of your discretionary income ; or

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Repayment Plan Repayment Period

IBR Plan for those who are NOT new borrowers on or after July 1, 2014

25 years IBR Plan for new borrowers on or after July 1, 2014 20 years

Pay As You Earn Plan 20 years

ICR Plan 25 years

Under all three plans, any remaining loan balance is forgiven if your federal student loans are not repaid in full at the end of the period.

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 Most physicians repay their student loans in

15 years or less.

 You may change plans if you want during

repayment.

 If you are eligible for Public Service Loan

Forgiveness, you may qualify for forgiveness

of any remaining Direct Loan balance after you have made 10 years of qualifying

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Income driven plans are a good option for borrowers with lower salaries experiencing a

financial hardship, and/or for those seeking

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120 Payments in an eligible plan Public Service Employment Loan Forgiveness!

Under the PSLF program, the amount forgiven is not considered income for tax

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• _{Most charitable non-profit organizations,}

federal, state, or local government agencies

• _{501(c)(3), Public health, public education}

Public Colleges Children’s _Hospital

VA Hospital

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Submit a Employment Certification Form for Public Service Loan Forgiveness to qualify for

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 Partial interest subsidy.

 The amount of interest that accrues on the subsidized loans, but

exceeds the IBR or PAYE payment amount, will be paid for by the fed gov’t for the first 3 years of repayment.

 _{Limit to the amount capitalized and a potential}

postponement of capitalization.

 Capitalization will not occur until after the PFH ceases to exist, or you elect to leave IBR or PAYE.

 _{Capped maximum payment amount.}

 The maximum amount cannot exceed what the 10-year Standard

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 Submit an application called the

Income-Driven Repayment Plan Request.

 _{You can submit the application online at}

StudentLoans.gov or on a paper form, which you can obtain from your loan servicer.

 _{Along with the application, you will be asked to}

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 _{You can document your income using AGI if:}

 you have filed a federal income tax return in the past two years, and

 the income on your most recent federal income tax return is not significantly different from your current income.  You can provide your AGI in one of the following ways:

 _{Apply online and use the IRS Data Retrieval Tool}

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 If you do not meet the conditions for

documenting your income using AGI, you must provide alternative documentation of income.

 Submit a paper Income-Driven Repayment Plan Request with your most recent pay stub.

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 Medloans® Organizer and Calculator

 _{Organize and track your loan information}  _{Calculate custom repayment plans}

 _{Estimate amount forgiven under PSLF}  _{NSLDS upload feature}

 Dept of Ed Repayment Estimator

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 AAMC FIRST for Medical Education

https://www.aamc.org/services/first/

 Federal Student Aid http://studentaid.ed.gov/

 Your Loan Servicer

http://studentaid.ed.gov/repay-loans/understand/servicers

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 Thursday, November 20th at noon, S255

 Guest Speaker: Financial Advisor from

Renaissance Financial

 Website:

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