Congratulations Class of 2014! From: The Financial Aid Office Team

1. Congratulations Class of 2014!From: The Financial Aid Office Team (Atheia, Jacqui, Kristin, Melissa, Sean, Sue, Tom, Usha)

2. Exit Interview Goals • BASICS • Rights/responsibilities • servicer requirements • Verifying the accuracy of your debt • STRATEGIES • Repayment Hierarchy & overall strategies • What to do/when to do it • Forbearance or Income Based Repayment or something else?? • Consolidation • Tax Benefits • Don’t Default!!

3. Loans to cover 1) Institutional loans • TJU loan • Alumni loan • Perkins loan • PCL • Donor named 2) Stafford 3) Grad PLUS 4) Private alternative loans

4. Submit before you leave presentation • Statement of Attendance • Repayment Schedule (only for those with Jefferson loans) • Survey – we will email you a Survey Monkey link prior to March 15 • Remember to complete federally required online EXIT counseling at http://studentloans.gov

5. TJU Debt Record • Includes all aid you received each academic year • Loans reflect Principal amount only – payments & interest are not reflected • Bottom of sheet tallies your total loan principal debt by Banner code –

6. Institutional & Institutionally administered Loans • Federal Perkins Loan • Alumni Loan, Simpson Loan, Levi Loan, TJU Loan etc. • Federal PCL and LDS • Serviced by Xerox/ACS, Inc. (800) 826-4470 http://acs-education.com • Mailing of payments to: With coupon: Without coupon: Xerox Educational Services Xerox Educational Services, Inc– PO Box 3295 CPS Monetary Processing Milwaukee, WI 53201-3295 PO Box 7061 Utica, NY 13504-7061 • All institutional loans get repaid to the University via Xerox (ACS) Your TJU contact person: Rebecca Reynolds 1020 Walnut Street, Room 521 Philadelphia, PA 19107 (215) 503-7226 studentloans@jefferson.edu • Serviced by Xerox/ACS, Inc. (800) 826-4470 • http://acs-education.com

8. Jefferson is the lender for…. • Institutional loans (e.g., TJU Loans, Alumni Loans, Morgan Loan etc.) • Certain Federal Loans • Federal Perkins • Federal Loans for Disadvantaged Students • Federal Primary Care Loans

9. TJU Loan Repayment Schedule • The Repayment Schedule Lists: • payment start date • monthly payment amount • repayment period • interest rate • Amount of interest that will accrue over life of loan • total loan cost (interest and principal)

10. Jefferson Loan Parameters • Jefferson Loans – aka TJU Loan, Alumni Loan, or loan named after Donor (Morgan, Simpson, Mills etc.) • 12 month grace only (exceptions: Wayland, Robt. Wood Johnson, SleddCunnison loan have post graduate training deferment options beyond Grace period) • 10 year repayment • Fixed 5% interest rate (exceptions: Wayland, Kellogg, Snyder, Bacharach, and Robt Wood Johnson have reduced interest rates) • Cancelled upon Death/permanent disability Jefferson is the lender/Xerox-ACS is the Servicer

11. Federal Perkins Loan Parameters • Federal Perkins – • 9 month grace • Forbearance is permitted • 6 month grace before repayment begins • 10 year repayment • Fixed 5% interest rate • Cancelled upon Death/permanent disability • CAN BE CONSOLIDATED WITH FEDERAL STAFFORD/GRAD PLUS! Jefferson is the lender/Xerox-ACS is the Servicer

12. Federal LDS Loan Parameters • Loan for Disadvantaged Students • 12 month grace • Deferment is permitted for 3 year Residency • 10 year repayment • Fixed 5% interest rate • Cancelled upon Death/permanent disability CAN BE CONSOLIDATED WITH FEDERAL STAFFORD/GRAD PLUS Jefferson is the lender/Xerox-ACS is the Servicer

13. Federal PCL Loan Parameters • Primary Care Loan • 12 month grace • Deferment is permitted for 3 yr Residency • 10 year repayment (20 years max if requested depending on loan amount) • Fixed 5% interest rate • Cancelled upon Death/permanent disability Has requirement to work in Primary Care (as defined in promissory note) while loan is in repayment Cannot be consolidated! Jefferson is the lender/Xerox-ACS is the Servicer

14. Who is Who? • Lender – who lends the money • Guarantor – who guarantees the funds to the lender if you do not repay • Servicer – MOSTIMPORTANT – they have processed your loan, disbursed the funds and will be collecting your payments and working with you on deferment/forbearance • Many to most borrowers only have a “servicer” due to Direct Lending

15. Forbearance • What is it? Postponement of your federal loans for a set period of time - usually for 12 months at a time. • Available for duration of residency for Stafford, Grad PLUS and Federal Consolidation Loans • Application required at least annually – most servicers require a formfor sign-off from Housestaff Office • Mandatory that servicer grant forbearance for duration of residency… but borrower MUST ask for it and complete form • Interest accrues and may capitalize on all loans, subsidized and unsubsidized – confirm with your servicer • Use only after you have exhausted your grace period

16. Federal Stafford Loan (FFELP/Direct Loan) • 6 month grace period • Eligible to apply for Forbearance • Can be consolidated with Grad PLUS, Perkins, LDS • Interest rate - If borrowed: • 7/1/13 to 6/30/14 – fixed 5.41% • 7/1/06 to 6/30/13 –fixed 6.8%; • Prior to 6/30/2006 - Rate is variable on all loans that are not consolidated. • 10 year repayment is standard – can ask for longer repayment period (see loan repayment slide) • Cancelled upon Death/permanent disability

17. Federal Graduate PLUS • No grace period (check with servicer- many grant auto-forbearance for 6 months to align with Stafford) • Eligible to apply for Forbearance just like Stafford • Can be consolidated with Stafford, Perkins, and LDS • Interest rate - If borrowed: • 7/1/13 to 6/30/14 – fixed 6.41% • 7/1/10 to 6/30/13 –fixed 7.9%; • 7/1/06 to 6/30/10 – fixed 8.5% • Prior to 6/30/2006 – loan was available to parents only • 10 year repayment is standard – can ask for longer repayment period- (see loan repayment slide) • Cancelled upon Death/permanent disability

18. Private Alternative Loans(includes Residency/Relocation loans) • Usually 6 to 9 month grace (interim) period • Most deferred for at least 3 years during residency – read promissory note or call lender to check parameters on length of forbearance and necessary documentation of internship/residency • Interest rate will change as frequent as the index used (indexes include 30 day LIBOR; 91 day LIBOR; PRIME RATE) • there is usually no ceiling on the interest rate. • Notcancelled upon death or permanent disability

19. Finding Your Federal Loans on NSLDS.ed.gov • To access, provide: • - SS# • - Date of Birth • - First 2 letters (last name) • - PIN # (www.pin.ed.gov) www.nslds.ed.gov

20. Contact all of your loan Servicers REQUIRED! • 45 days before or after your last date of enrollment • Confirm • That you are no longer enrolled • repayment amount/amount owed • Grace period: • Start date • End date • when first payment is due!!! • when Forbearance form should be submitted(for Stafford and Grad PLUS) • Call first - then follow up in writing if you think this is necessary – keep copy of written letter for your file • Update your address

21. Dates To Remember- What to do and when to do it! (See chart in handout-page 2) • Grace periods relate to each individual loan borrowed. • If you have consolidated any loans, you have used the grace period and repayment will start immediately at graduation (check with servicer for exact date). Federal Grad PLUS loans have no grace period as well (check with servicer to confirm options such as immediate forbearance). • If you used the full6 month Grace period on a loan or group of loans (e.g., between college and TJU, leave of absence) you do not get another grace period on these loans • FILE FOR FORBEARANCE 2 - 4 WEEKS BEFORE REPAYMENT DUE DATE – Standard form is usually necessary • If no consolidation or if loan was never in repayment, 6 month grace period still exists.

22. FFELP vs. DIRECT Loans • FFELP – Federal loans borrowed from a bank/lender (e.g., Wells Fargo, Citibank). Most have been turned over to federal servicer • DIRECT - Federal loans borrowed directly from government; only lender beginning 7/1/10 – sometimes referred to as a “DL” loan

23. Current Repayment Options • Standard (Level) Repayment • Extended Repayment • Graduated Repayment • Income Sensitive Repayment – FFELP only • Income Contingent – Direct Loans only • Income Based Repayment – FFELP and Direct Loans – NEW 7/1/09 • Pay As You Earn (PAYE) – New 12/2012

24. Loan Repayment Plans • Standard (Level) • Level monthly payments over 10 year period • Higher monthly payments - Lowest overall cost • Extended (Level)* • Level monthly payments over 25 year period • *Must have an outstanding balance of more than $30,000 in Stafford Loans on or after October 7,1998

25. Loan Repayment Plans • Graduated • Payments start low, increase usually every two years • FFELP – must have more than $30,000 outstanding • DL – monthly payment calculated based on DL debt and interest rates of loans; never less than monthly interest accrual • Higher overall cost - Good for early cash flow, but remember cost! • Income Sensitive - FFELP Program Only • Payments tied to income • Finish in 10 years (may be extended to 15 years) • Income Contingent - Direct Loan Program Only • Monthly payment amount calculated based on borrower’s household income, family size, and total Direct Loan debt.

26. Loan Repayment Plans Income Based Repayment (IBR) • caps loan payments at 15% of your household income that exceeds 150% of the federal poverty guideline for your family size • payment amount will change with increase in income • 25 years repayment period • Calculation includes ONLY Federal education loans - cannot include Perkins or LDS unless you have had these loans included in a Federal Direct Loan consolidation • Must provide income verification (W2s, tax returns, paycheck stub, employment contract). *DEPENDING ON SERVICER* Any balance remaining after 25 years is forgiven but amount is considered taxable!!!

27. Loan Repayment Plans Pay As You Earn Plan – 2012 • Direct Loan Program only • For new borrowers only: You are a “new Borrower” if you • Have no Direct or FFEL loans as of 10/1/2007 and • Received a Subsidized, Unsubsidized, or Grad PLUS loan disbursement on or after 10/1/2011, or a Direct Consolidation * loan based on an application received on or after 10/1/2011. • * Exception: You are not a new borrower for the PAYE plan if you consolidated loans that otherwise made you ineligible, i.e., loans made prior to 10/1/2007

28. Loan Repayment Plans Pay As You Earn Plan – 2012 (continued) • Modeled on IBR, incorporating statutory IBR changes scheduled to take effect for new borrowers in 2014 • 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) • Must demonstrate Partial Financial Hardship (PFH) • 20 year repayment period then cancelation/forgiveness of remaining balance. Forgiven portion is taxable. More information available at StudentAid.gov/PayAsYouEarn

29. Income-Based Repayment $410 / mo $2,130 / mo* • As originally determined when calculating Partial Financial Hardship based on $185,000 entering repayment • ($162,000 total education debt plus $23,000 of capitalized interest from 4-years of school and 6-months of grace). • **Preliminary data from AAMC Survey of R/F Stipends and Benefits and AAMC Analysis • Formula for a Partial Financial Hardship (PFH): Standard payment* > IBR payment • More likely when income is low and debt is high • Max payment in IBR is the Standard amount* • 1st post-M.D. year median stipend is $48,700**

30. Income-Based Repayment • Benefits • Partial interest subsidy during the first 3 years • Unpaid interest does not capitalize when: • Annual paperwork* is filed timely • Borrower demonstrates a PFH • Possible loan forgiveness • *As reported to the IRS. Annual verification required of both AGI and family size

31. Income-Based Repayment • To enter IBR, borrower must • Contact each servicer individually to request • Give access to household AGI* (tax records) • Inform servicer(s), annually, of family size • Demonstrate a Partial Financial Hardship (PFH) *As reported to the IRS. Annual verification is required of both AGI and family size.

32. Income-Based Repayment Chart

33. Income-Based Repayment Online IBR Calculators www.finaid.org www.IBRinfo.org www.aamc.org/FIRST Studentloans.gov • Determined by Calculating • 15% of income that exceeds 150% of the poverty line for a borrower’s family size • SEE FAQ in PACKET or also located at www.ibrinfo.org

34. The most feasible options during residency: Postpone payments and pay Later (using Forbearance) Pay Now (using Income-Based Repayment) Do both –forbear loan payments but make voluntary payments (you are in the driver’s seat to determine the amount and frequency of payments)

35. Repayment Plan Comparison Determines the payment amount & interest cost

36. 10 Year Public Service Loan Forgiveness • Must work for a non-profit organization under section 501(c)(3) of IRS code that is exempt from taxation under section 501(a) of the IRS code – includes most not-for-profit private schools, colleges, and universities. Each of the 120 payments must have been made during a period of qualifying employment • Must make 120 monthly payments under qualifying plan • Only available to those who have loans under the Direct Loan Program (consolidation may be necessary) • After 120 qualifying payments, your remaining balance can be forgiven; Payments do not need to be consecutive • Amount forgiven is NOT taxable under PSLF • MyFedLoan is only federal servicer managing PSLF

37. 10 Year Public Service Loan Forgiveness • On January 31, 2012, the Department released a voluntary Employment Certification Form that borrowers can submit to the Department for a determination of whether their employment and payments qualify for PSLF • Borrower has employer complete employment verification section • Borrower submits form to FedLoan Servicing (regardless of who current servicer is) • FedLoan Servicing determines whether employment qualifies • If employment qualifies, borrower’s loans are transferred to FedLoan Servicing, for a determination of how many qualifying payments were made during the period of employment • Borrowers loans remain at FedLoan servicing permanently • Borrower can submit the form as often as annually For more, including Q&As, see StudentAid.gov/PublicService

38. Pros and Cons of Public Service Loan Forgiveness Program • Will federal funding be available in 10 years?? • Will you be required to make career decisions regarding where you work based on program?? • Will your plans change? • Do you have the financial ability to make loan payments as a resident when payments and income are lowest for you?? • How much federal debt will remain for forgiveness after 10 years?? • Will you have more income potential over a lifetime in the private sector than what would be forgiven in this program???

39. Consolidation Fast Facts • Combining many federal loans into one loan, one set of new terms, with one servicer – NEWyou can choose the servicer (note: MyFedLoan is the only servicer for PSLF) • Interest rate is determined by calculating the weighted average (+1/8 point) of all loans being consolidated – interest rate is fixed. • Have option of consolidating all federal loans or only some– or none at all • Federal Government is the only entity offering federal Consolidation http://studentloans.gov(see option “Direct Consolidation Loan Applications” under the button)

40. Consolidation Why to consider consolidation: • Multiple servicers to repay (convenience) • To obtain Public Service Loan Forgiveness (DL) (if consolidated, Perkins, LDS, and FFELP loans will become Direct Loans) • To make Perkins or LDS loans eligible for IBR

41. When to Consolidate • If you consolidate before your grace period is exhausted, you may lose the remaining grace period. (Don’t consolidate in June) • Start consolidation 40-60 days prior to first payment • Can be done online (debt from NSLDS is integrated) • If consolidation is not complete before first payment is due, apply for forbearance on all loans included in the consolidation so no payment is necessary (don’t make any payments after you have started the application). • A repayment plan will be chosen at this time but entering repayment is not required; forbearance can be utilized • More than likely, a new forbearance on the consolidated loan would need to be filed.

42. Paying Loans Off Early • You can prepayyour federal student loans with no penalties. • make payments towards the highest cost unsubsidized loans that may have the most frequent capitalization. Unless otherwise noted, loan payments typically are applied first toward collection costs (attorney’s fees, etc.), then interest, and finally principal

43. Repayment Hierarchy – do you have the ability to make voluntary or extra payments? • Review all of your debt – include credit cards, car loans etc. • Calculate which is the most expensive using interest rate, repayment terms etc. • Start making voluntary/extra payments to the most expensive first • Perkins/institutional loans – cheapest during 1st year while interest is subsidized

44. Loan repayment programs • Military • NHSC • Pennsylvania • Delaware • NIH • Other – see AAMC resource at http://services.aamc.org/fed_loan_pub

45. Tax Benefits • Lifetime Learning Credit • Deduction for student loan interest payments • Tuition and Fee

46. The Taxpayer Relief Act of 1997Student Loan Interest (income restrictions subject to change each tax year) Student loan interest deduction max $2,500 per year Voluntary payments may be eligible Capitalized interest may be included www.irs.gov/publications/p970

47. Mortgages • The Financial Aid Office is not the “lender” of any of your loans. Therefore I/we cannot state anything in writing that indicates your eligibility to postpone your loans. • Feel free to take anything already in print from the packet or the book • contact your servicer directly. • Upon request – handout from the federal Common Manual with policy on Mandatory Forbearance can be emailed to you

48. IMPORTANT TO REMEMBER!!!! • Don’t default – don’t ignore your debt • After 270 days late, servicer assumes you will not pay • Servicer can garnish your wages and tax refunds • Servicer can sue - you are responsible for costs • Collection agencies take over • Default is recorded on Credit Report • School can withhold records • Professional Licenses are pulled in a growing number of states • Student loans rarely discharged in bankruptcy • Keep all your servicers updated as to phone numbers, address, change in residency status • Call your servicer if you need help • Call Financial Aid Office – we are here to help for as long as you need it

49. Student Loan Ombudsman • The student can contact the Ombudsman’s office if unable to resolve any loan difficulties with the school, lender, servicer or guarantor. The contact information for the Student Loan Ombudsman’s Office is: Office of the Ombudsman Student Financial Assistance U.S. Department of Education FSA Ombudsman 830 First Street, NE 4th Floor Washington, DC 20202 • Customer Service Line (877) 557-2575 • Website: http://ombudsman.ed.gov

50. Summary • Reconcile your records Financial Aid Office records servicers records • Contact your servicers to update address/phone number etc. • Find out when the grace period starts and ends and when first payment is due and then ask when to file your forbearance request. DON’T SUBMIT TOO EARLY! • Make schedule and submit all paperwork when necessary orbe prepared to make a payment by due date if not forbearing. • Don’t wait until last minute to get your finances in order. Know what you have! • Ask questions.