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Michael T. Goodman Associate Vice President Tulane University Financial Aid 8/8/2013

Money Management for Entering Students Entrance Interview. Michael T. Goodman Associate Vice President Tulane University Financial Aid 8/8/2013.

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Michael T. Goodman Associate Vice President Tulane University Financial Aid 8/8/2013

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  1. Money Management for Entering Students Entrance Interview Michael T. Goodman Associate Vice President Tulane University Financial Aid 8/8/2013 Disclaimer: All information and estimates are based on AAMC interpretation of federal regulations as of June 2011 and are subject to change. These are estimates only. Students should always contact their servicer(s) to discuss the terms and conditions of the loans.
  2. Agenda Disbursements of aid Refunds for living expenses Reconsiderations Applying for 2014-2015 Aid for 2014 summer Additional information Questions??? Introduction Operations Know the Details of Your Loans The Timeline Borrowing Strategically Have a Spending Plan Understand and Protect Your Credit
  3. Introduction Tulane University Health Sciences Center Office of Financial Aid Suite 1213, Tidewater Building 1440 Canal Street Serving… School of Medicine School of Public Health & Tropical Medicine
  4. Operations Counselor by alphabet (last name): A-HO: Carl Hudson, Counselor HP-MB: James Bourgeois, Associate Director MC-Z: Shirley Davis, Counselor Monday-Thursday from 12-4PM @ the 15th floor of the Murphy Building Jonathan Jouet, Counselor Program Coordinator: Donna Fasullo
  5. Operations Tidewater Office Hours: 9AM – 5PM, Monday – Friday Counselors available: M-W 1PM – 4PM Th & F 9AM – 1PM Recommend appointments Communications: (504) 988-6135 (504) 988-6136 fax Website: http://tulane.edu/financialaid/hsc/
  6. Where Are We? Accepted aid award via Gibson on-line Completed Direct Loan entrance counseling on-line (for both Stafford and Graduate PLUS Loans) Completed Direct Loan master promissory notes (MPNs) on-line (for both Stafford and Graduate PLUS Loans) If awarded and accepted Federal Perkins Loan, completed Perkins MPN on-line (via ACS) Completed direct deposit information on-line with the Tulane Accounts Receivable Office
  7. Know the Details of Your Loans
  8. The FIRST Stop… Medloans® Organizer and Calculator www.aamc.org/FIRST
  9. Finding Your Federal Loans To access, provide: - SS# - Date of Birth - First 2 letters (last name) - PIN # (www.pin.ed.gov) www.nslds.ed.gov
  10. Finding Other Loans To access, provide: Name Address - Date of Birth - Social Security # www.annualcreditreport.com
  11. Rights include the ability to: Rights and Responsibilities Prepay any federal loan without penalty Request a shorter repayment schedule Change repayment plans Request a deferment or forbearance Review your promissory note for all rights
  12. Rights and Responsibilities Responsibilities include: Make on time loan payments Make payments despite receipt of bill Notify the lender of changes in contact info Attend an Exit Counseling session Review your promissory note for all responsibilities
  13. A Serious Obligation Student loans must be repaid Manage your debt -don’t let it manage you
  14. Consequences of… Delinquency Default
  15. Interest Rates
  16. Loan Fees Federal Perkins: none Federal Stafford: 1.051% example: borrow $10,000 with 1.051% fees: $10,000 x 1.051% = $105 $9,895 disbursed, yet repayment = $10,000 Federal Graduate PLUS: 4.204% Alternative Loans: usually 0% front fees, varies on back-end fees, check with private loan lender
  17. Subsidized vs. Unsubsidized Sub • si• dy[suhb-si-dee] noun - Financial assistance granted by the government to cover accruing interest while in-school, in grace, or in a qualifying deferment. Source: www.dictionary.com
  18. Subsidized vs. Unsubsidized Perkins* Primary Care Loans LDS Loans* Instiututional Loans (some) Consolidations Loans(underlyng subsidized loans) Unsubsidized Stafford Direct PLUS Private Loans Institutional Loans (some) Consolidation Loans (underlying unsubsidized loans) Subsidized Unsubsidized *subsidy and deferment rights lost during consolidation
  19. Capitalization Addition of unpaid interest to the principal $185,029 $162,000 $23,029 Larger Principal + Interest Principal =
  20. Debt Management Tip Pay the interest on unsubsidized loans PRIOR to capitalization
  21. If dropping below half-time or withdrawing: Contact the Financial Aid Office immediately Exit Counseling is required Payments are required or grace periods begin For questions contact your Financial Aid Office NOTICE: Repayment Begins
  22. Direct PLUS loans Enters repayment upon full disbursement In-school deferment will post-pone payments Interest begins accruing upon disbursement Interest accrues continuously Maximum interest rate is 7.9% NOTICE: Repayment Begins
  23. The Timeline
  24. Grace Periods Grace A period when payments are not required : Occurs automatically Subsidized loans are interest free during grace Unsubsidized loans continue to accrue interest Availability and duration is based on loan type
  25. Options During Residency During residency, there are two choices: Make Payments Select a Repayment Plan Postpone Payments Deferment Forbearance
  26. Options During Residency Deferment A period when payments are not required Must apply and qualify Interest does not accrue on subsidized loans Unsubsidized loans continue to accrue interest NOTE: For more details on deferment or to request a deferment, contact your servicer
  27. Options During Residency Forbearance A period when payments are not required Must request from the servicer Interest accrues on sub and unsub loans Many types (administrative, discretionary, mandatory) NOTE: For more details on forbearance or to request a forbearance, contact your servicer
  28. Options During Residency $2,130/mo Determines the payment amount & interest cost $1,280/mo $1,050/mo $ 630/mo $ 400/mo
  29. Strategic Borrowing
  30. Alternatives to Debt IIi II I Forgiveness/ Repayment Options Support Scholarships www.aamc.org/stloan Financial Aid Office Family Outside Service based Institutional
  31. 86% of class report having educational debt 62% of class report debt $150,000 or higher Class of 2012 Indebtedness National Data Source: AAMC 2012 Graduate Questionnaire (GQ)
  32. MEDIAN $264,768 81% of class had educational debt 63% of class had debt $150,000 or higher Class of 2012 Indebtedness Tulane Class of 2012 Data Source: AAMC 2011 Graduate Questionnaire (GQ)
  33. How Will You Borrow? Do NOT borrow just because you are eligible Borrow what you need, not what you want Decline loans that exceed your need Accepting loans may affect eligibility for other aid Avoid forfeiting low rate loans for higher rate debt
  34. Financial Aid Fact If a shortfall occurs, previously declined monies may be obtained – see financial aid for assistance
  35. Borrow Wisely CHALLENGE Borrowing $5,000 less each year will REDUCE: Monthly Payment By: $400 (+) The Total Loan Cost By: $39,000 (+) Repayment Term By: 2 (+) years TIP: Have a budget and borrow less Note: Assumes amount borrowed in Stafford Loans with 6.8% interest with forbearance during a 3-year residency Source: AAMC FIRST Analysis
  36. Have a Spending Plan
  37. Have a Spending Plan A Spending Plan in 1-2-3 Put it in writing Review periodically to identify leaks Make necessary adjustments “Live like a student while you are a student…”
  38. Have a Spending Plan www.aamc.org/FIRST
  39. The Basics of Budgeting Your Total Income Your Total Expenses Your Discretionary Income
  40. Tulane Budgeting & Billing You will receive by e-mail a monthly billing statement detailing charges and credits that occurred during the prior month. 2013-2014 School of Medicine’s tuition & fees: $26,125.00 tuition per semester $ 1,300.00 academic support fee per semester $ 120.00 student activity fee per semester $ 320.00 health services fee per semester $ 87.50 rec. center fee per semester $27,952.50 = Total tuition & fees per semester Other charges: Books, Parking, Deming Pavilion, Health Insurance
  41. Tulane Budgeting & Billing Financial Aid Budget for the 2013-2014 Academic Year: assumption: not residing with parents Tuition & fees: $55,905 Room & board: $14,368* Books & supplies $ 1,500 Transportation: $ 3,160* Miscellaneous: $ 4,306* TOTAL: $79,239 *$21,834 living expenses equates to $2,183/month
  42. Tulane Budgeting & Billing Financial Aid Award for the 2013-2014 Academic Year: Federal Direct Unsubsidized Stafford Loan: $40,500 Federal Direct Graduate PLUS Loan: $38,739 TOTAL: $79,239 Thus, total financial aid award = total cost of attendance.
  43. Disbursements of Aid Example of 2013 Fall Semester disbursements: Tuition & fees $27,592.50 = $27,592.50 Unsub. Staff. ($20,038.00) Grad. PLUS ($18,556.00) = $38,594.00 = A/R balance ($11,001.50) + Refund $11,001.50 = A/R balance $ 0.00
  44. Are Credit Cards Bad?
  45. The Minimum Payment Trap $5,000 Balance with an 18% Interest Rate (Making minimum monthly payments) 22.75 years to repay in full $6,923 in total interest costs alone What could possibly be worth paying more than twice its original value? Source: BankRate.com
  46. Credit: Understand & Protect
  47. A FICO Score is Based On… Type of credit used Payment history New credit 10% 10% 35% 15% 30% Length of credit history Utilization rate (amount owed)
  48. How to Improve Your Score During medical school, be sure to: Pay bills on time Pay down debt on lines of credit Apply for credit sparingly
  49. Check your Credit Report www.annualcreditreport.com
  50. Support Along the Way www.aamc.org/FIRST Careers in Medicine ® FACEBOOK: FIRST for Medical Education Medloans ® Organizer and Calculator Your loan servicers’ and their websites Your medical school financial aid office www.ombudsman.ed.gov
  51. Reconsiderations Computer purchase (max. = $2,500) only allowed once during medical school career Combined MD/MPH degree program Special financial circumstances Receive any other financial assistance: outside scholarship and/or grant
  52. Applying for 2014-2015 2014-2015 FAFSA 2014-2015 School of Medicine Financial Aid Addendum No need for new federal loan MPN Apply for Grad PLUS or private loan (since credit-based) 2014 Summer aid for MD/MPH
  53. Additional Information Outside Scholarships: www.finaid.org check bulletin board and e-mail Communication: Tulane e-mail address Emergency loans: not an ATM $1,000 maximum per academic year FIRST@AAMC.org
  54. Questions?
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