Understanding Private Loans

Default Prevention

Agenda Essential loan language Variable rate language

♦ Types of indexes

Language for all types of loans Dissect an interest rate

♦ Variable rate history

Finding the best deal

What’s In It For You?

Improve discussion with borrowers Better understanding of loans and terms Less stress

Loan Language

APR Guarantee Fees

Origination

Capitalization Margin

LIBOR CapAdjustment

Period

T-BillPoints Prime

Negative Amortization Variable

Know Another Language?

Review the FAFSA, determine EFC, then send the AL through your FAM system.

Is your school Direct or FFEL? Do you process EFT through ELM? Do you award FWS, Pell and FSEOG?

Loan Language Essentials

Interest Rate

A charge for a loan♦ Shown as a percent of borrowed amount

One of many ways to charge for a loan♦ Up-front fees♦ Capitalization frequency

Interest Rate

Interest♦ Student loans — monthly♦ Credit cards — daily or monthly♦ Earlier payments = less interest

How payment is applied♦ Fees♦ Interest

• Lowest interest rate balance• Higher interest rate balance

♦ Principal

Interest Rates and Debt

Secured♦ Car♦ Home

Unsecured♦ Credit card♦ Personal loan♦ Education loan

What’s in an Interest Rate

Cost of funds

+ Operations

+ Inflation

+ Risk

+ Profit

Borrower rate

Index

Margin

Dissecting an Interest Rate

Credit CardCost of Funds1 2.38%Inflation Rate2 2.50%Operations3 0.50%Loan Losses4 4.85%Total Lender Cost 10.23%Profit 2.94%Loan Rate5 13.17%

1,4,5 Bank sample June 2006 2Federal Reserve 3Federal Reserve Bank Functional Cost and Profit Analysis.

APR

Annual Percentage Rate (APR)♦ Annual basis♦ Up-front charges

• Guarantee fees• Origination fees

♦ Compounding frequency Can make shopping easier

♦ Price tag

Index Types

Index and borrower rate T-Bill LIBOR Prime rate

Index

Index ♦ Wholesale price

• Rate = price lender pays for money• Name = where lender obtains money

Borrower rate ♦ Retail price

• Price borrower pays for money

T-Bill

Treasury bill Government borrowing

♦ U.S. deficit♦ Rate set by the government♦ Price it will pay to borrow money

Terms: 13 and 26 weeks

LIBOR

London Interbank Offered Rate♦ Rate international banks in London charge each other for loans

♦ Can take place anywhere

♦ Recorded in London

♦ Similar to NYSE

Index has been used for 18 years

Prime Rate

Retail♦ Credit-worthy customers

• Secured

Private loans♦ Wholesale price♦ Mark-up/margin added

• Borrowers lack credit history• Unsecured

Margin

Allowance to cover expenses♦ Rate the borrower pays 10%

♦ Index (cost of funds) -4%

♦ Margin (covers expenses) 6%

Index + Margin

Loan Type Index MarginBorrower

Rate

LIBOR Index 5.36% 7.89% 13.25%

Prime Index 8.25% 5.00% 13.25%

T-Bill Index 4.61% 8.64% 13.25%

What the Lender pays

Lender Revenue

What the customer pays+ =

Floor and Cap

Floor♦ Lowest rate♦ Rarely used

Cap♦ Highest rate♦ Limits consumer risk♦ Also called ceiling

Cap Example

Prime + 3% with a cap of 12%♦ If prime rate is 14% + 3% margin ♦ Rate is ____%

Adjustment Period

How often rate changes♦ Annually, quarterly, monthly

Purpose♦ Easier budgeting♦ Keeps lender’s margin/markup level

Adjustment Period Cap

Maximum rate change each period Purpose

♦ Limits borrower risk♦ Easier to budget♦ Benefit when rates are going up♦ Not a benefit when rates decline

Variable Rate Payment Risk

Loan Amount $20,000

Loan Rate 5.00%

Cap 25.00%

Payment Range $212 - $455

Possible Increase 115%

Based on a 10-year loan term.

Loan Origination Fees

Paid up-front Usually a percentage of the loan amount Origination

♦ Fee to start a loan♦ Adds to the total cost of the loan♦ Included in APR

Points

Point = % of loan amount One point = 1%

♦ Origination fee of 2% ♦ Two points

♦ $25,000 x 2 points = $500

Mortgage, home equity♦ student loans

Amortization

Amortize = Pay off Reduction of debt

♦ Regular payments of • Interest (cost of the loan)• Principal (actual amount borrowed)

Result = Loan balance decreases

Negative Amortization

Increasing debt Payments do not cover principal and interest Result = Loan balance grows Read the fine print Monthly payments remain fixed throughout the life of the loan. Any fluctuation in the interest rate will be reflected in the length of repayment, not in the monthly amount.

Capitalization

Adding interest to loan balance Capital = Money borrowed Interest is paid on capital “Capitalized” = when interest becomes part of the capital

What’s a Better Deal?

Low fee or a low rate $10,000 loan with 10-year term

♦ 1% fee = $100♦ 1% rate discount = $626

A lower rate saves more than a low fee Similar to car loan

$626 savings based on an interest rate comparison of 7% and 8% on a 10-year loan term.

The Right Choice

LIBOR Prime rate T-Bill

?

Indexes Mirror Each Other

0%

5%

10%

15%

20%

25%

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Years

Inte

rest

Rat

e

Prime

90 Day Tbill

3 MO LIBOR

Source: St. Louis Federal Reserve Bank and Federal National Mortgage Association

Rates Mirror Each Other

Margin compensates for index variety

Any index

+ Margin

= Similar loan rates

Private Loan ChoicesLender Index Margin Cap

CurrentRate Fees Term

# 1 LIBOR 5.00% None 10.36% 4.00% 15

# 1 LIBOR 5.00% None 10.36% 6.25% 15

# 2 PRIME 0.50% None 8.75% 0% 15

# 2 PRIME 4.75% None 13.00% 0% 15

# 3 PRIME 1.00% None 9.25% 0% 15

# 3 PRIME 1.00% None 9.25% 3% 15

# 4 LIBOR 4.50% None 9.86% 2% 15

# 4 LIBOR 4.50% None 9.86% 9.90% 15

# 4 LIBOR 5.50% None 10.86% 2% 15

# 4 LIBOR 5.50% None 10.86% 9.90% 15

# 5 LIBOR 1.60% 12.00% 6.96% 3.75% 15

# 5 LIBOR 1.60% 12.00% 6.96% 7.00% 15

# 5 LIBOR 2.80% 12.00% 8.16% 3.75% 15

# 5 LIBOR 2.80% 12.00% 8.16% 7.00% 15

# 5 PRIME 0.00% 12.00% 8.25% 3.75% 15

# 5 PRIME 0.00% 12.00% 8.25% 7.00% 15

# 6 PRIME 0.00% None 8.25% 0% 15

# 6 PRIME 0.00% None 8.25% 9% 15

# 6 PRIME 5.00% None 13.25% 0% 15

# 6 PRIME 5.00% None 13.25% 9% 15

# 7 LIBOR 2.25% None 7.61% 0% 15

# 7 LIBOR 2.25% None 7.61% 8% 15

# 7 LIBOR 8.00% None 13.36% 0% 15

# 7 LIBOR 8.00% None 13.36% 8% 15

# 8 LIBOR 4.00% 18.00% 9.36% 0% 15

# 9 PRIME 6.50% None 14.75% 0% 15

# 9 PRIME 6.50% None 14.75% 3% 15

# 10 PRIME 4.50% None 12.75% 0% 15

# 10 PRIME 7.75% None 16.00% 0% 15

Lender Index Margin CapCurrent

Rate Fees Term A LIBOR 1.00% None 6.36% 0% 20

A LIBOR 1.00% None 6.36% 8% 20

A LIBOR 2.75% None 8.11% 0% 20

A LIBOR 2.75% None 8.11% 8% 20

B PRIME -0.50% None 7.75% 0% 20

B PRIME -0.50% None 7.75% 9% 20

C LIBOR 3.75% None 9.11% 0% 20

C LIBOR 3.75% None 9.11% 7% 20

D PRIME 0.00% None 8.25% 0% 20

D PRIME 4.50% None 12.75% 0% 20

E LIBOR 0.00% None 5.36% 6.50% 20

E LIBOR 0.00% None 5.36% 10.50% 20

E LIBOR 3.50% None 8.86% 6.50% 20

E LIBOR 3.50% None 8.86% 10.50% 20

F LIBOR 3.85% None 9.21% 2% 20

G 3 Mo T-Bill 3.40% None 8.01% 6.50% 20

G 3 Mo T-Bill 3.40% None 8.01% 8.00% 20

H PRIME 1.25% None 9.50% 0% 20

H PRIME 1.25% None 9.50% 8% 20

H PRIME 2.25% None 10.50% 0% 20

H PRIME 2.25% None 10.50% 8% 20

I LIBOR 1.80% None 7.16% 0% 20

I LIBOR 1.80% None 7.16% 9% 20

J LIBOR 7.50% None 12.86% 0% 20

J LIBOR 7.50% None 12.86% 9% 20

K LIBOR 4.25% None 9.61% 2% 20

K LIBOR 4.25% None 9.61% 9% 20

K LIBOR 9.95% None 15.31% 2% 20

K LIBOR 9.95% None 15.31% 9% 20

L LIBOR 3.25% None 8.61% 6.50% 20

L LIBOR 3.25% None 8.61% 10.50% 20

M PRIME 1.00% None 9.25% None 20

M PRIME 5.00% None 13.25% 0% 20

Comparison Shopping

Determine amount to borrow Identify loan choices Interest rate index Up front costs

♦ Points, fees, etc. Term Total cost of loan

♦ Principal, interest, fees

Comparison Chart

Index Name 91 Day Tbill Prime 3 mo LI BOR

Index Rate 1.76% 4.75% 1.88%

Margin 3.25% 1.00% 3.20%

Current Rate 5.01% 5.75% 5.08%

Floor 3.00% None 1.00%

Cap None 25.00% 18.00%

Adjustment Period Quarterly Annually 6 months

Origination Fee % 4.00% None 8.00%

Loan Amount $15,000 $15,000 $15,000

Origination Fee $600 $0.00 $1,200

Guarantee Fee % 1.00% 5.50% -

Guarantee Fee $150 $75 -

Other Fees $75 $0.00 -

Total Fees $825 $75 $1,200

Term 20 years 20 years 20 years

Payment Range $99 to ??? $105 to $315 $100 to $232

Rate Information

Fees

Considerations

Variable Rate♦ Index (base)♦ Starting rate♦ Margin♦ Floor♦ Cap♦ Adjustment frequency♦ Payment range

Private Loan ChoicesLender Cosigner Index Margin Adjustment Cap Current Rate Term FeesLoan # 1 Yes LIBOR + 3.85% Quarterly None 5.75% 20 4.0%Loan # 2 Yes LIBOR + 3.85% Quarterly None 5.75% 20 2.0%Loan # 3 Yes 3 mo LIBOR + 3.2% Quarterly None 5.10% 20 12.9%Loan # 4 Yes 3 mo LIBOR + 3.2% Quarterly None 5.10% 20 7.5%Loan # 5 Optional 91 Day T-Bill + 3.15% Annually None 4.88% 20 4.0%Loan # 6 Optional Prime + 0.0% 6 Months 18% 4.75% 20 7.5%Loan # 7 Yes LIBOR + 2.90% Quarterly None 4.65% 20 9.0%Loan # 8 Yes LIBOR + 2.90% Quarterly None 4.65% 20 4.0%Loan # 9 Yes 52 Week T-Bill + 3.10% Annually None 4.60% 20 5.0%Loan A Yes LIBOR + 5.25% Quarterly None 7.15% 15 5.0%Loan B Yes Prime + 2.00% Monthly None 6.75% 15 NoneLoan C Yes Prime + 1.00% Monthly None 5.75% 15 9.0%Loan D Yes Prime + 1.00% Monthly None 5.75% 15 NoneLoan E Yes Prime + 0.5% Quarterly 25% 5.25% 15 NoneLoan F Yes 91 Day T-Bill + 3.25% Quarterly None 4.98% 15 4.0%Loan G Optional Prime + 0.50% Monthly None 4.83% 15 3.0%Loan H Yes 91 Day T-Bill + 3.50% 6 Months None 4.23% 15 8.0%Loan I Yes 91 Day T-Bill + 3.50% 6 Months None 4.23% 15 4.0%

Lender #1 #2 #3

Index Name 91 Day Tbill Prime 3 mo LI BOR

Index Rate 1.76% 4.75% 1.88%

Margin 3.25% 1.00% 3.20%

Current Rate 5.01% 5.75% 5.08%

Floor 3.00% None 1.00%

Cap None 25.00% 18.00%

Adjustment Period Quarterly Annually 6 months

Origination Fee 4.00% None 8.00%

Loan Amount $15,000 $15,000 $15,000

$ Origination Fee $600 $0.00 $1,200

Guarantee Fee 1.00% 5.50% -

$ Guarantee Fee $150 $75 -

Other Fees $75 $0.00 -

Total Fees $825 $75 $1,200

Rate Information

Fees

Alternative Loan Cost Comparison

?

What is a Good Deal?

Affordable payment♦ Fits in your budget

Competitive rate Reasonable fees Feeling like you got a fair deal

Finding the Best Deal

General loan criteria♦ Homes, cars, credit cards, etc.

♦ Most creditworthy = lower loan rate

♦ Least creditworthy = higher loan rate

♦ Private student loans

Private Loan ChoicesLender Index Margin Cap

CurrentRate Fees Term

# 1 LIBOR 5.00% None 10.36% 4.00% 15

# 1 LIBOR 5.00% None 10.36% 6.25% 15

# 2 PRIME 0.50% None 8.75% 0% 15

# 2 PRIME 4.75% None 13.00% 0% 15

# 3 PRIME 1.00% None 9.25% 0% 15

# 3 PRIME 1.00% None 9.25% 3% 15

# 4 LIBOR 4.50% None 9.86% 2% 15

# 4 LIBOR 4.50% None 9.86% 9.90% 15

# 4 LIBOR 5.50% None 10.86% 2% 15

# 4 LIBOR 5.50% None 10.86% 9.90% 15

# 5 LIBOR 1.60% 12.00% 6.96% 3.75% 15

# 5 LIBOR 1.60% 12.00% 6.96% 7.00% 15

# 5 LIBOR 2.80% 12.00% 8.16% 3.75% 15

# 5 LIBOR 2.80% 12.00% 8.16% 7.00% 15

# 5 PRIME 0.00% 12.00% 8.25% 3.75% 15

# 5 PRIME 0.00% 12.00% 8.25% 7.00% 15

# 6 PRIME 0.00% None 8.25% 0% 15

# 6 PRIME 0.00% None 8.25% 9% 15

# 6 PRIME 5.00% None 13.25% 0% 15

# 6 PRIME 5.00% None 13.25% 9% 15

# 7 LIBOR 2.25% None 7.61% 0% 15

# 7 LIBOR 2.25% None 7.61% 8% 15

# 7 LIBOR 8.00% None 13.36% 0% 15

# 7 LIBOR 8.00% None 13.36% 8% 15

# 8 LIBOR 4.00% 18.00% 9.36% 0% 15

# 9 PRIME 6.50% None 14.75% 0% 15

# 9 PRIME 6.50% None 14.75% 3% 15

# 10 PRIME 4.50% None 12.75% 0% 15

# 10 PRIME 7.75% None 16.00% 0% 15

Lender Index Margin CapCurrent

Rate Fees Term A LIBOR 1.00% None 6.36% 0% 20

A LIBOR 1.00% None 6.36% 8% 20

A LIBOR 2.75% None 8.11% 0% 20

A LIBOR 2.75% None 8.11% 8% 20

B PRIME -0.50% None 7.75% 0% 20

B PRIME -0.50% None 7.75% 9% 20

C LIBOR 3.75% None 9.11% 0% 20

C LIBOR 3.75% None 9.11% 7% 20

D PRIME 0.00% None 8.25% 0% 20

D PRIME 4.50% None 12.75% 0% 20

E LIBOR 0.00% None 5.36% 6.50% 20

E LIBOR 0.00% None 5.36% 10.50% 20

E LIBOR 3.50% None 8.86% 6.50% 20

E LIBOR 3.50% None 8.86% 10.50% 20

F LIBOR 3.85% None 9.21% 2% 20

G 3 Mo T-Bill 3.40% None 8.01% 6.50% 20

G 3 Mo T-Bill 3.40% None 8.01% 8.00% 20

H PRIME 1.25% None 9.50% 0% 20

H PRIME 1.25% None 9.50% 8% 20

H PRIME 2.25% None 10.50% 0% 20

H PRIME 2.25% None 10.50% 8% 20

I LIBOR 1.80% None 7.16% 0% 20

I LIBOR 1.80% None 7.16% 9% 20

J LIBOR 7.50% None 12.86% 0% 20

J LIBOR 7.50% None 12.86% 9% 20

K LIBOR 4.25% None 9.61% 2% 20

K LIBOR 4.25% None 9.61% 9% 20

K LIBOR 9.95% None 15.31% 2% 20

K LIBOR 9.95% None 15.31% 9% 20

L LIBOR 3.25% None 8.61% 6.50% 20

L LIBOR 3.25% None 8.61% 10.50% 20

M PRIME 1.00% None 9.25% None 20

M PRIME 5.00% None 13.25% 0% 20

How to Find the Best Deal

Separate private loans by term Sort by rate Divide into three sections

♦ Best credit♦ Average credit♦ Poor credit

Private Loan Choices

Lender Index Margin CapCurrent

Rate Fees Term Payment Total Cost

# 5 LIBOR 1.60% 12.00% 6.96% 3.75% 15 $10,390 $93 $16,768

# 5 LIBOR 1.60% 12.00% 6.96% 7.00% 15 $10,753 $96 $17,354

# 7 LIBOR 2.25% None 7.61% 0% 15 $10,000 $93 $16,799

# 7 LIBOR 2.25% None 7.61% 8% 15 $10,870 $101 $18,260

# 5 LIBOR 2.80% 12.00% 8.16% 3.75% 15 $10,390 $100 $18,046

# 5 LIBOR 2.80% 12.00% 8.16% 7.00% 15 $10,753 $104 $18,676

# 6 PRIME 0.00% None 8.25% 0% 15 $10,000 $97 $17,462

# 5 PRIME 0.00% 12.00% 8.25% 3.75% 15 $10,390 $101 $18,147

# 5 PRIME 0.00% 12.00% 8.25% 7.00% 15 $10,753 $104 $18,777

# 6 PRIME 0.00% None 8.25% 9% 15 $10,989 $107 $19,190

# 2

# 3

# 3

# 8

# 4

# 4

# 1

# 1

# 4

# 4

# 10

# 2

# 6

# 6

# 7

# 7

# 9

# 9

# 10

Lender

# 5

# 5

# 7

# 7

# 5

# 5

# 6

# 5

# 5

# 6

# 2

# 3

# 3

# 8

# 4

# 4

# 1

# 1

# 4 LIBOR 5.50% None 10.86% 2% 15 $10,204 $115 $20,715

# 4 LIBOR 5.50% None 10.86% 9.90% 15 $11,099 $125 $22,532

# 10 PRIME 4.50% None 12.75% 0% 15 $10,000 $125 $22,479

# 2 PRIME 4.75% None 13.00% 0% 15 $10,000 $127 $22,774

# 6 PRIME 5.00% None 13.25% 0% 15 $10,000 $128 $23,071

# 6 PRIME 5.00% None 13.25% 9% 15 $10,989 $141 $25,353

# 7 LIBOR 8.00% None 13.36% 0% 15 $10,000 $129 $23,202

# 7 LIBOR 8.00% None 13.36% 8% 15 $10,870 $140 $25,221

# 9 PRIME 6.50% None 14.75% 0% 15 $10,000 $138 $24,885

# 9 PRIME 6.50% None 14.75% 3% 15 $10,309 $143 $25,654

# 10 PRIME 7.75% None 16.00% 0% 15 $10,000 $147 $26,437

Lender

# 5

# 5

# 7

# 7

# 5

# 5

# 6

# 5

# 5

# 6

# 2 PRIME 0.50% None 8.75% 0% 15 $10,000 $100 $17,990

# 3 PRIME 1.00% None 9.25% 0% 15 $10,000 $103 $18,525

# 3 PRIME 1.00% None 9.25% 3% 15 $10,309 $106 $19,098

# 8 LIBOR 4.00% 18.00% 9.36% 0% 15 $10,000 $104 $18,644

# 4 LIBOR 4.50% None 9.86% 2% 15 $10,204 $109 $19,580

# 4 LIBOR 4.50% None 9.86% 9.90% 15 $11,099 $118 $21,298

# 1 LIBOR 5.00% None 10.36% 4.00% 15 $10,417 $114 $20,564

# 1 LIBOR 5.00% None 10.36% 6.25% 15 $10,667 $117 $21,058

# 4 LIBOR 5.50% None 10.86% 2% 15 $10,204 $115 $20,715

# 4

# 10

# 2

# 6

# 6

# 7

# 7

# 9

# 9

# 10

Lender Index Margin CapCurrent

Rate Fees TermAmount

Borrowed Payment Total Cost

# 5 LIBOR 1.60% 12.00% 6.96% 3.75% 15 $10,390 $93 $16,768

# 5 LIBOR 1.60% 12.00% 6.96% 7.00% 15 $10,753 $96 $17,354

# 7 LIBOR 2.25% None 7.61% 0% 15 $10,000 $93 $16,799

# 7 LIBOR 2.25% None 7.61% 8% 15 $10,870 $101 $18,260

# 5 LIBOR 2.80% 12.00% 8.16% 3.75% 15 $10,390 $100 $18,046

# 5 LIBOR 2.80% 12.00% 8.16% 7.00% 15 $10,753 $104 $18,676

# 6 PRIME 0.00% None 8.25% 0% 15 $10,000 $97 $17,462

# 5 PRIME 0.00% 12.00% 8.25% 3.75% 15 $10,390 $101 $18,147

# 5 PRIME 0.00% 12.00% 8.25% 7.00% 15 $10,753 $104 $18,777

# 6 PRIME 0.00% None 8.25% 9% 15 $10,989 $107 $19,190

# 2

# 3

# 3

# 8

# 4

# 4

# 1

# 1

# 4

# 4

# 10

# 2

# 6

# 6

# 7

# 7

# 9

# 9

# 10

Best

Lender

# 5

# 5

# 7

# 7

# 5

# 5

# 6

# 5

# 5

# 6

# 2 PRIME 0.50% None 8.75% 0% 15 $10,000 $100 $17,990

# 3 PRIME 1.00% None 9.25% 0% 15 $10,000 $103 $18,525

# 3 PRIME 1.00% None 9.25% 3% 15 $10,309 $106 $19,098

# 8 LIBOR 4.00% 18.00% 9.36% 0% 15 $10,000 $104 $18,644

# 4 LIBOR 4.50% None 9.86% 2% 15 $10,204 $109 $19,580

# 4 LIBOR 4.50% None 9.86% 9.90% 15 $11,099 $118 $21,298

# 1 LIBOR 5.00% None 10.36% 4.00% 15 $10,417 $114 $20,564

# 1 LIBOR 5.00% None 10.36% 6.25% 15 $10,667 $117 $21,058

# 4 LIBOR 5.50% None 10.86% 2% 15 $10,204 $115 $20,715

# 4

# 10

# 2

# 6

# 6

# 7

# 7

# 9

# 9

# 10

Lender

# 5

# 5

# 7

# 7

# 5

# 5

# 6

# 5

# 5

# 6

# 2

# 3

# 3

# 8

# 4

# 4

# 1

# 1

# 4 LIBOR 5.50% None 10.86% 2% 15 $10,204 $115 $20,715

# 4 LIBOR 5.50% None 10.86% 9.90% 15 $11,099 $125 $22,532

# 10 PRIME 4.50% None 12.75% 0% 15 $10,000 $125 $22,479

# 2 PRIME 4.75% None 13.00% 0% 15 $10,000 $127 $22,774

# 6 PRIME 5.00% None 13.25% 0% 15 $10,000 $128 $23,071

# 6 PRIME 5.00% None 13.25% 9% 15 $10,989 $141 $25,353

# 7 LIBOR 8.00% None 13.36% 0% 15 $10,000 $129 $23,202

# 7 LIBOR 8.00% None 13.36% 8% 15 $10,870 $140 $25,221

# 9 PRIME 6.50% None 14.75% 0% 15 $10,000 $138 $24,885

# 9 PRIME 6.50% None 14.75% 3% 15 $10,309 $143 $25,654

# 10 PRIME 7.75% None 16.00% 0% 15 $10,000 $147 $26,437

Guiding Students

Before Term Credit rating Index Fees Apply Confusion

Now Term Credit rating Apply

Guiding Students

1% rate discount vs. 1% fee discount Rates typically mirror each other Prepare for payment to change Pay off higher interest rate debt

♦ Credit cards♦ Private loans (if rate goes up) ♦ Deferment/forbearance options

Conclusion

1. Variable rate language

2. Types of indexes

3. Language for all types of loans

4. What is a good deal?

5. Guiding students

Thank you for attending

Mike Stein

301-231-7557

mstein@edfund.org