Integrated Problems in Practice Management (IPPM) Exit Counseling - - PowerPoint PPT Presentation
Integrated Problems in Practice Management (IPPM) Exit Counseling and Debt Management Keneshia Estim Class of 2018 Agenda Navigat ing t he Financial Aid Repayment Process Repaying Federal Loans Repaying Privat e Loans
Exit Counseling and Debt Management Keneshia Estimé Class of 2018
Navigat ing t he Financial Aid Repayment Process Repaying Federal Loans Repaying Privat e Loans Repaying BU Loans Consolidat ion Budget s and Planning for t he Fut ure Cont ingency Planning and Budget ing Credit Report s and S
cores
Helpful Resources Exit Mat erial Requirement s and S
ign-out Process
How much can I afford to pay per
month?
What are my other financial
What are my short-term and long-
term financial goals?
Where do I see myself in 5, 10, 15
years?
All examples are for illustrative purposes
Assumptions: $99,000 in the first year
Tax filing status: single Tax Rate: $18,713.75 plus 28%
Taxes for year: $20,702
After Federal Taxes: $78,298
Source: https://www.forbes.com/sites/kellyphillipserb/2016/10/25/irs-announces-2017-tax-rates-standard-deductions- exemption-amounts-and-more/#5cd5f1b25701
$78,298 after federal taxes
Don’ t forget about state taxes, social security payments, retirement contributions and health insurance
Estimated net pay $5,558 per month (see: www.paycheckcity.com)
What can you afford as a monthly student loan payment?
Maximum Federal Loans Only for 4
years of Dental S chool
Unsubsidized Loans: $180,000 5.31-
6.8%
Grad PLUS
Loans: $220,000 6.31- 7.9%
Total: $400,000
We know these figures do not apply to many of you- this is just one example.
Maximum Federal Loans Only
for 2 years of Dental S chool
Unsubsidized Loans: $95,000
5.31-6.8%
Grad PLUS
Loans: $126,000 6.31-7.9%
Total: $221,000
Based on assumptions on DMD IV slide:
*This and the following slides based on the calculator available on www.studentloans.gov
www.studentloans.gov
This is the default plan Typically the fastest way to repay
your loan (10 Y ears)
Monthly payments are a fixed
amount
Access Group, Inc.; Standard 10 Year; 2015; accessgroup.org; 2016
Payments start low and increase every 2 years Monthly payments are made for up to 10 years Over the lifetime of the loan you pay more
money
Remember: with Federal Loans there is no
prepayment penalty.
Access Group, Inc.; Extended (Fixed) 25 Year; 2015; accessgroup.org; 201
least $50
and Graduated Plan
Standard Graduated Extended
A plan that sets your monthly
payment at an affordable amount based on income and family size
Four different income-driven
plans
Must reapply annually
Advantages
Disadvantages
between debt and income is high
you must have a partial financial hardship
after 20 years
Always check www.studentloans.gov for the most up to date information.
Must display financial hardship
PAYE Calculation:
(Income – 150% of poverty line) X 10% (discretionary)
12 Months = Your Monthly Payment
Source:https://aspe.hhs.gov/poverty-guidelines
https://studentaid.ed.gov/sa/about/announcements/repaye
discretionary income and can be more than standard plan
LF
Step 1: Apply for the IDR
Step 2: Find your Loan
Servicer Contact info on NSLDS.ed.gov
Step 3: Set up a user
name and password on your servicer’s website
Step 4: Upload Income
documentation to certify your income annually
If you do not certify your income and
reapply on an annual basis:
May no longer be in the plan Interest capitalization (P
AYE/ REP AYE)
Payment may revert to standard 10
year amount (P AYE)
Federal Consolidation Loan
Allows you to combine your Federal Loans into one loan
that can be paid off over 30 years
No fee to consolidate Be aware of losing borrower benefits associated with
Interest rate is a weighted average of underlying loans Y
student loans
For more info visit: https:/ / studentaid.ed.gov/ repay-
loans/ consolidation
Repayment Timeline for Federal Loans
Repayment begins 6 months after you
graduate, drop below half time or take a leave of absence
Loans that were in repayment before
entering Dental S chool go into repayment immediately
Make sure you are prepared to make your
first payment and that you are set up with your servicer(s) before that payment is due
Contact your loan servicer at least a month before you
might miss a payment
Y
ervicer wants to help you keep your loan in good standing
Check to see if a different repayment plan would help Ask if you qualify for either a Deferment or a
Forbearance
Public Service Loan Forgiveness
Loans forgiven after 120 non-consecutive, qualifying payments.
Eligible Loans: Direct Loans, Direct Graduate PLUS loans
Eligible repayment plans: Income Driven Plans
Eligible Job: Any state, federal or local government or non-profit organization (501c3)
For more info visit: www.studentloans.gov National Health Service Corps
Eligible loans:
All federal, state, or commercial educational loans.
Full time and part time forgiveness programs
Must be general or pediatric Dentist
To apply, find a j ob at an approved site: http:/ / nhscj obs.hrsa.gov/ S earch_HPOL.aspx
Apply by stated deadlines: http:/ / nhsc.hrsa.gov/ loanrepayment/
After Graduation Delinquency and Default
Delinquency
Definition: late student loan payments
Default
Definition: 270 days past due No longer eligible for federal student aid Wages may be garnished; tax refunds withheld May not be able to get/ renew professional licensing Denied malpractice insurance
Loan cancellation (discharge) available due to:
Death Total and permanent disability Loan is not transferred to spouse or children
Documentation must be provided to loan holder/ servicer
Y
After Graduation Tax Benefits
S tudent Loan Interest Deduction*
paid on student loans
$80k if single OR $160k if married and filing j ointly
Please contact the IRS
* Amounts based on 2014 Tax Publication 970: www.irs.gov
Always check www.irs.gov for the most up to date information.
If you can, pay some (or all) of the
interest that has accrued on your loans before the end of your 6 month grace period when the interest capitalizes
If you are able to, making additional
payments can reduce the total interest paid, and the time it takes to repay your loan
Always follow up with your loan servicer
when making additional payments
Go to www.studentloans.gov Click on “ My Financial Aid History” S
elect Financial Aid Review
Log In Using your FS
A ID (the same process as F AFS A)
Click on each loan for more detail,
including the loan servicer for that loan
Check all loans, you may have more than
The terms and conditions vary- check
with your lender
Always follow up when making payments Ask about incentives for on-time
payments and co-signer release
Private loans do not show up on
www.studentloans.gov
S pencer N. Frankl Loan
(5% fixed int erest rat e)
Henry M. Goldman Loan
(5% fixed int erest rat e)
Altshuler Loan
(5% fixed int erest rat e)
Loans for Disadvantaged S tudents, LDS
(5% fixed int erest rat e)
Health Professions S tudent Loan, HPS L
(5% fixed int erest rat e)
12 month grace period No interest accrues while you are in
school
10 year repayment timeline No prepayment penalty
RETURN TO STUDENT FINANCIAL SERVICES
S
et up account on www.mycampusloan.com
Contact S
tudent Loan Accounting for any questions as you go through repaying your loan
www.bu.edu/ studentloanaccount ing
/ contact-us
Considerations: Flexibility Deferment Options Prepayment Penalties Interest Rate Capitalization Debt forgiveness
http://www.adea.org/current-students/Education-Debt-Management.aspx
Basics General Living Expenses (Housing, Food, Child Care, etc.) Taxes (Federal, S tate, etc.) Insurance (Life, Health, Liability, etc.)
Long- and S hort-Term Goals Emergency Fund S avings Retirement
Future Planning Down Payment on a Mortgage Maj or Life Events
Purpose of a Budget :
To identify and plan short and long term goals for how you will:
S pend your available resources
Meet your needs and wants
Avoid spending more than you have
Planning Y
Monthly
Annual Compensation/Salary
$________
Monthly Net Income
$________
Rent/Mortgage
$________
Food and Utilities
$________
Consumer Debt Payment
$________
Malpractice Ins./Licensure Fees
$________
Monthly Disposable Income
$________
Estimated Monthly Loan Payment
$________
All US
residents may receive one free credit report from each bureau annually
Review all information carefully Every detail is important – from the S
S # to the individual account numbers
Review your reports every year Y
points in the year
PLEAS E REMEMBER: www.annualcreditreport.com is FREE www.freecreditreport.com is NOT FREE It is a subscription site from one of the credit bureaus that will try to sell you reports from the other two
Helpful Hints
www.myfico.com/CreditEducation/ImproveYourScore.aspx
Sample Credit Report
Review of Experian Credit Report available at: www.experian.com/ assistance/ sample-credit-report.html
To Dispute Items
Follow instructions from credit bureau S
end written dispute letters
Creditors have 30 days to provide proof Keep copies of everything!
FICO Score and VantageScore
FICO S core is the traditional credit rating
S
cores range from 300-850
VantageS core is a new credit rating
S
cores range from 300-850
What’s in your score:
What ’s NOT in your score:
Race/ Et hnicit y/ Religion Age/ S
ex/ Marit al S t at us
S
alary, Occupat ion or Employment Hist ory
Child S
upport or Alimony Responsibilit ies
Locat ion
www.myfico.com/CreditEducation/WhatsInYourScore.aspx
Late payments Frequency of
Frequency of inquiries
Joint Credit
All credit cards, mortgages, auto loans, etc. that are
j ointly held will show on all credit reports
If your spouse doesn’ t pay the bill, you are still
responsible
Divorce does not automatically release one party
from the j oint debt; that must be negotiated during proceedings
http:/ / creditscorequiz.org
Helpful Hints
Debt Management S t rat egies
Reduce debt with the highest Annual Percentage Rate (APR)
Once that debt is eliminated, roll that budgeted monthly payment amount into the second highest APR
This strategy is a good rule-of-thumb - not an absolute
Helpful Hints
A Lit t le S elf Prot ect ion
S
ign up for Aut o Debit wit h your loans
Invest in overdraft prot ect ion t hrough your
S
ign up for savings plans at your bank
Be aware of all aut o-pay account s linked t o
your bank account , especially if you close it
Helpful Hints
Why Aut o Debit and Overdraf t ?
Many lenders offer incent ives for elect ronic repayment of
your educat ion loans
Many offer addit ional incent ives for on-t ime payment s
(aft er a cert ain number of mont hs)
Why?
Elect ronic payment s = lower cost s AND fewer delinquencies
BUT…
if you bounce a payment , you may lose t he on-t ime incent ive
Be aware of what t he mont hly payment is- it changes year
t o year under IBR/ P AYE
What S hould Y
Organize your financial aid documents:
What do you have for undergrad borrowing? Have you borrowed residency loans? Organize all contact information Identify and organize all loans by highest interest rate and
amount
Plan a budget S
ign up for a repayment plan for all of your loans
Know when your first payment is due
Attend IPPM IV Presentation
If you have BU Loans: complete and submit the BU Exit Counseling Form
If you have Federal Loans:
Complete Federal Exit Counseling on:
www.studentloans.gov
Email online confirmation to OS
FS-S DM@ BU.EDU
Questions and Answers