2011 Graduating Students
Exit Loan Counseling
What is an Exit Interview &
Why Do I Need to Do It?
The FEDERAL government requires
that Federal Loan recipients
complete Student Loan Exit
Counseling prior to graduating or
whenever they cease to enroll at
least half-time.
 The purpose of an exit session is to
help students understand their
rights and responsibilities as a
student borrower.

Rights & Responsibilities
RIGHTS
RESPONSIBILITES
Written information
Default information
Copy of your prom note
Repayment information
Subsidies, grace, deferment
Forbearance
Prepayment without penalty
Must repay loans
Notify loan servicer:
*change in contact info
*ability to pay
*change in status or
grad date
*failure to enroll
*Attend exit counseling
Loan Repayment Timeline
Federal
Direct Sub &
Unsub*
Plus Loans
FFEL or DL
6 month
grace
Economic Hardship Deferment
(Up to 3 years)
Must Apply Each Year
Up to 6
month
grace
Deferment
Repayment or
Forbearance
Repayment or
Forbearance
*If you have a FFEL/DL or a Federal Perkins Loan taken out prior to 7/1/93, please contact the Exit
Counselor for pertinent information.
Federal Direct
Repayment Options

Standard
Highest monthly payment - Saves the most in interest

Extended
Lower monthly payments – Longer term, more interest

Graduated
Starts off low monthly payment - Increases every 2 yrs

Income-Contingent Repayment
Based on income to debt ratio – Accrues most interest

Income-Based Repayment
Based on income to debt ratio – Accrues most interest
Available 7/1/09 website www.ibrinfo.org
What is New
Income-Based Repayment (IBR) is available now. IBR is a new
option that will help by keeping your loan payments manageable with
payment caps based on your income and family size. IBR will also forgive
remaining debt, if any, after 25 years of qualifying payments. The student
loans must be in the Direct & Guaranteed (FFEL) loan programs, excluding
loans made to parents. This includes Stafford, Grad Plus, and
consolidation loans that do not include Parent PLUS loans.
Public Service Loan Forgiveness provides assistance to those borrowers
who work in public service jobs, including jobs in government at all levels
and nonprofit 501 (c) (3) organizations. It will forgive remaining debt after
10 years of eligible employment and qualifying loan payments, including
payments under IBR.
Please go to the website, www.ibrinfo.org , for additional information
on both these programs and the IBR calculator to see if you qualify .
Income-Based Repayment
(IBR)

Effective date: July 1, 2009

Eligibility criteria:


Available for repayment of FFELP/Direct
Stafford, Grad PLUS and Federal
Consolidation Loans (FCL)

Cannot be used to repay Parent PLUS Loans

Cannot be used to repay FCL that included payoff of a Parent PLUS
Loan
You must have “Partial Financial Hardship”
IBR Basics

To enroll in IBR, you have to demonstrate financial need
according to a federal formula that will limit monthly
payments to no more than 15 % of discretionary income.

As long as you demonstrate Partial Financial Hardship –
on an annual basis – the monthly payment will be based
on a portion of your discretionary income.

You can report $0 income – that is be unemployed

$0 payments are allowed which count toward the IBR
payment limit and the PSLF payment limit

After 25 years the unpaid balance will be forgiven,
however, this amount may be considered taxable
income.
Extended Repayment vs. IBR
AGI = $40,000
Things To Consider

The first step is to determine what you are doing after
graduating.

If you do not have a job lined up or are under-employed,
you may want to explore available options, which include:



Economic hardship deferment
Unemployment deferment (actually unemployed)
IBR
Additional Information
You are STRONGLY encouraged to visit the following
websites for more information:
 www.ibrinfo.org
http://equaljusticeworks.org
AND use one of the on-line repayment calculators to plug
in your debt, income, household size information…
 http://www.finaid.org/calculators/ibr.phtml
 http://studentaid.ed.gov/PORTALSWebApp/students/englis
h/IBRPlan.jsp
 www.salliemae.com/ibr
Rights & Privileges
Deferment
 Forbearance
 Cancellations
 Consolidation


Office of Student Financial Assistance Programs
– Ombudsman
• (877) 557-2575
• http://ombudsman.ed.gov
Deferment
(principal & interest)
Economic Hardship*
 Unemployment
 Continuing Education
 Military Service (Active duty)

You must apply and meet certain criteria…
Subsidized loans remain interest free. Unsubsidized
loans continue to accrue interest.
*
Effective July 1, 2009, the formula for qualifying for EHD changed. Most
graduates will no longer qualify so you will have to pursue other options.
Postponement Options
Economic Hardship Deferment has changed.
As of July 1, 2009, the formula is now based
on 150% of the poverty level.
 www.finaid.org - EHD Calculator
 Alternatives:

Forbearance
 IBR

Forbearance
(principal only)
Must apply annually-use AFTER grace
and deferment options have been used
 Will not extend repayment term
 No renewed grace period


Forms for Direct Loans at:
www.dlssonline.com
Interest accrues and capitalizes on all loans
Cancellations

Volunteers
Vista & Peace Corps
12 months consecutive service

Military Service
Active duty
12 months consecutive service

Teachers
K-12, Title I school, Full Time
12 months consecutive service

RN’s and
Medical Technicians
12 months consecutive service
Law Enforcement
includes District Attorneys &
Federal/Community Public Defenders
12 months consecutive service

Consolidation

Direct Loan website

www.loanconsolidation.ed.gov

Lower monthly payments

Additional interest rate reduction incentives

Possible loss of rights from old loans

Alternative Loan Programs and Outside Agency
Loans WILL NOT QUALIFY
Is Consolidation Right For
You?





Direct Loans disbursed before 7/1/06 are variable rate
loans
Direct Loans disbursed after 7/1/06 are a fixed rate at
6.8%
The variable interest rate effective 7/1/10: in school,
grace or deferment is 1.87%; in repayment or
forbearance will be 2.47%
Does it make any sense to re-consolidate or consolidate
your loans into a separate consolidation?
Use the loan calculator to see:
www.loanconsolidation.ed.gov
Consequences of Defaulting

Derogatory reporting on credit report (will stay on credit report for
seven years)








Unable to obtain more federal aid
Hold on student records and diploma
Late fees will be assessed
FTB and/or IRS can withhold income tax refund
Wages can be garnisheed
Lender can declare entire balance due
You can be liable for litigation & collection costs (can be
up to 65% of principal)
Eligibility for deferments & cancellations can be lost,
including IBR
How Can I Save Money?
Pay during the grace or deferment
period – no penalties to prepay loans
 Pay more than the minimum amount
 Claim interest on taxes (1098-E)
 Use shortest repayment period for
Direct Loans
 Pay interest up front on unsubsidized
loans
 Make payments via electronic debit
 Perhaps consolidate your loans

Taxes-Student Loan
Interest Deduction
You may be able to deduct the interest you
pay on a qualified student loan. And, if
your student loan is canceled, you may
not have to include any amount as
income. More information is available at:
www.irs.gov/publications/p970/ and
www.ire.gov/taxtopics/tc456.html
Budgeting with your net
income
Net income should be more than when you
were a student
 Consider paying down higher interest rate
debt first – such as private loans and credit
cards before paying down federal
educational loans
 Consider working with a financial
professional (financial planner or CPA)

Where Do I Go To Complete
The Exit Interview?
www.studentloans.gov
Information You Will Need For
the Online Exit Interview





Your Social Security Number
Your Driver’s License number
Name, address and telephone number of
your next of kin and/or parent
Names, addresses, telephone numbers,
and employers of two references residing
at different U.S. addresses
Name, address and telephone number of
your expected employer (if known)
Loan Totals Listed on NSLDS
NSLDS
(National
Student
Loan Data
System)
Loan Amounts of
all Federally
Backed Student
Loans
This is now the
best option to find
out the loan
servicing company
for your Direct
Loans.
www.nslds.ed.gov
(800) 433-3243
(800) 4-FED-AID
E-mail:
Studentaid@ed.gov
DON’T FORGET…………

It is a Federal Requirement (not Becker’s) to
complete the Exit Interview. You can do this
electronically by…..
www.studentloans.gov
Before you leave Becker…

Have you paid all of your Becker charges?

Make sure your transcripts and diploma are not held.

Check your Insite account or you may contact your
representative at Student Accounting.
Conclusion




Federal Requirement
Address updates
Important information
If you should have questions, please feel
free to contact the Financial Aid Office.
(508) 373-9440
financialaid@becker.edu
CONGRATULATIONS!