Michael T. Goodman Associate Vice President Tulane University Financial Aid 8/9/2012

1. Money Management for Entering Students Entrance Interview Michael T. Goodman Associate Vice President Tulane University Financial Aid 8/9/2012 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 2013-2014 Aid for 2013 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: 1.0% example: borrow $10,000 with 1.0% fees: $10,000 x 1.0% = $100 $9,900 disbursed, yet repayment = $10,000 • Federal Graduate PLUS: 4.0% • 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 59% of class report debt $150,000 or higher Class of 2011 Indebtedness • National Data • Source: AAMC 2011 Graduate Questionnaire (GQ)

32. MEDIAN $263,227 82% of class had educational debt 78% of class had debt $150,000 or higher Class of 2011 Indebtedness • Tulane Class of 2011 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. • 2012-2013 School of Medicine’s tuition & fees: $25,300.00 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 $27,127.50 = Total tuition & fees per semester • Other charges: Books, Parking, Deming Pavilion, Health Insurance

41. Tulane Budgeting & Billing Financial Aid Budget for the 2012-2013 Academic Year: assumption: not residing with parents Tuition & fees: $54,255 Room & board: $14,100* Books & supplies $ 1,500 Transportation: $ 3,100* Miscellaneous: $ 4,000* TOTAL: $76,955 *$21,200 living expenses equates to $2,120/month

42. Tulane Budgeting & Billing Financial Aid Award for the 2012-2013 Academic Year: Federal Direct Unsubsidized Stafford Loan: $40,500 Federal Direct Graduate PLUS Loan: $36,455 TOTAL: $76,955 Thus, total financial aid award = total cost of attendance.

43. Disbursements of Aid Example of 2012 Fall Semester disbursements: Tuition & fees $27,127.50 = $27,127.50 • Unsub. Staff. ($20,048.00) • Grad. PLUS ($17,499.00) = $37,547.00 = A/R balance ($10,419.50) + Refund $10,419.50 = 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