Student Loans 101 …….. how do you keep on top of all the changes?

Student Loans 101

…….. how do you keep on top of all the changes?

Objectives

Types of student loans Repayment plans Where to find federal loan

history and who to contact

Loans for graduate school or

professional programs

Creighton UniversityFinancial Aid Office

Federal Student Loansch, ch, change………

• Federally Insured Student Loan (FISL)• Guaranteed Student Loan (GSL)• Federal Family Education Loan (FFEL)

Stafford - subsidized - unsubsidizedPLUS - Parent - Grad Student

• Federal Direct Loan (FDL)• Health Care and Education Reconciliation

Act of 2007

Changes to loan programs

•Direct Loan Program (DL) Loans disbursed after 7/1/2010 U.S. Dept. of Ed. contracted servicers: Nelnet, Great Lakes, Sallie

Mae/Navient, PHEAA/FedLoan Servicing

•Family Education Loan Program (Stafford/FELP)

Loans disbursed prior to 7/1/2010(75% of schools were in FELP)

Serviced by banks or U.S. Dept. of Ed. contracted loan servicers Creighton

UniversityFinancial Aid Office

Common loan types

•Subsidized Stafford •Unsubsidized Stafford •Parent PLUS or Grad PLUS•Perkins•Federal Nursing •Health Profession Student Loan•Institutional •Private/alternative•Direct Consolidation Loan (federal)•Private Consolidation Loan Creighton


Notification of student loan eligibility

• Student submits Free Application for Federal Student Aid (FAFSA)

• Student submits verification documentation• Financial Aid Office awards student (cost of attendance

minus expected family contribution (EFC) equals Need)

• Active acceptance of aid• Student completes Master Promissory Note• Student completes Entrance Counseling• Student completes Exit Counseling


Subsidized Loan (Undergraduate)

•Fixed interest rate on July 1 - 4.66% for 7/1/14 – 6/30/15

•Interest paid by government while in school•6-month grace period•Annual limits

▫$3500 freshman▫$4500 sophomore▫$5500 junior/senior


Unsubsidized Loan (Undergraduate)

•Fixed interest rate on July 1 - 4.66% for 7/1/14 – 6/30/15

• Interest accrues while in school•6 month grace period•Annual limit for dependent student = $2000

If ineligible for part or all of subsidized loan, eligibility for annual unsubsidized loan increased by that amount

• Independent student or dependent student with parent PLUS loan denial

$6000 Freshman/Sophomore $7000 Junior/Senior Creighton


Aggregate Stafford or Direct Loan limits for undergraduate students

•Dependent student▫$31,000 ($23,000 subsidized)

•Independent student▫$57,500 ($23,000 subsidized)


Common repayment plans for subsidized/unsubsidized loan

•10 year fixed payment•25 year fixed payment if borrowed

over $30,000•Income driven repayment plans

Income contingent (ICL) Income based repayment (IBR) Pay as you earn (PAYE)

•Consolidation


Perkins, Nursing, or HPSL

•5% fixed interest rate•Interest deferred while in

school•9 month grace period•10 year repayment plan


Private or Alternative Loans

•Variable or fixed interest rate based on credit worthiness

•Co-signer requirement•Governed by consumer banking laws•Interest accrues while in school•Length of repayment period varies by

lender•Cannot be consolidated with federal

student loans Creighton UniversityFinancial Aid Office

• Unsubsidized Loan only• Fixed rate on July 1 - 6.21% for 7/1/14 – 6/30/15

▫Annual limit $20,500 for Grad/Law/OT/PT $33,000 - $44,000 for Pharmacy/Dental/Medical

▫Aggregate limit $138,500 for Grad/Law/OT/PT $224,000 for Pharmacy/Dental/Medical

• GradPlus Loan 7.21% for 7/1/14 – 6/30/15 Credit check – no adverse history Can borrow up to cost of attendance minus other financial

aid No aggregate limit


Graduate or professional program loan limits

Forgiveness/cancellation

• Public service loan forgiveness (PSLF) after 10 years Created in 2007 Full-time employment Public or tax exempt (designated 501(c)(3) status by IRS) Direct Loans only

• Income based repayment (IBR) after 25 years• Pay As You Earn (PAYE) after 20 years• Teacher

School must be designated by state as low income Perkins loan cancellation over 5 years

- Special Education Sub/Unsub cancellation of $5,000 after 5 years Sub/Unsub cancellation of $17,500 for highly qualified teachers in

math or scicence after 5 years • Certain health professions

Perkins Loan for Nursing, PT, OT over 5 years• Disability/death Creighton


Deferment or forbearance

•Deferment Entitlement

Accepted in a degree program at least ½ time Economic hardship deferment

Government pays interest on subsidized loan•Forbearance

Discretionary Postpones or reduces payment for a short

time Interest accrues on subsidized loan


Consequences of default

•270 days•Incur additional costs•Lose eligibility for future

financial aid•Lose federal and state tax

refund•Wages may be garnished•Credit report damaged for 10

years Creighton UniversityFinancial Aid Office

Track borrowing at the National Student Loan Data System www.nslds.ed.gov

Loan history

Click on loan number for loan servicer contact information

Student Loan Debt and Default Rates (undergraduate)

•National $29,400•Nebraska $26,473 (Project on

Student Loan Debt 2012)•Creighton University $25,129

•National 13.9%•Nebraska 7.0%•Creighton University 2.0%

Helpful websites

•www.studentaid.ed.gov Repay Your Loans

•www.studentloans.gov Consolidation information and

application Repayment Estimator Tool

•www.finaid.org/calculators Estimate monthly payments


http://www.studentaid.ed.gov/

http://www.loanconsolidation.ed.gov/

http://www.finaid.org/calculators

Contact information

Dean ObenauerAssistant Director of Financial AidCreighton University2500 California PlazaOmaha, NE [email protected] www.creighton.edu/financialaid

mailto:[email protected]

http://www.creighton.edu/financialaid

Student Loans 101 …….. how do you keep on top of all the changes?

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