FEDERAL FAMILY EDUCATION LOAN

1

FEDERAL FAMILYEDUCATION LOAN PROGRAM EXIT
COUNSELING Presented By Tim Hewitt Financial
Aid Office Cedarville University
Repaying Your Student Loans
2

• RIGHTS AND RESPONSIBILITIES
• RIGHTS
• You have the right to pre-pay all or part of your
  loan at any time without penalty.
• You are entitled to receive a repayment schedule
  before payment is due.
• You are entitled to be notified in writing if
  your loans are sold or transferred you will be
  given the name, address and phone number of the
  new holder.
• If you are having difficulties, you have the
  right to request a deferment or forbearance.

Cedarville Financial Aid Office
3

• RIGHTS AND RESPONSIBILITIES
• RESPONSIBILITIES
• You must repay your loan whether you have or have
  not completed your studies, whether or not you
  are satisfied with your education, and whether or
  not you are able to find employment.
• You must make your loan payments on time.
• You must communicate with the lender or servicer
  of your loan if you are having difficulties
  making payments.
• You must inform the holder of your loan if any of
  the following information changes
• Name, address or phone number

Cedarville Financial Aid Office
4
RIGHTS AND RESPONSIBILITIES SINGLE YEAR
PROMISSORY NOTES IMPLEMENTTATION OF THE MASTER
PROMISSORY NOTE (MPN) Cedarville started using
the MPN during the 1999 Academic Year. A
promissory note is a binding legal document that
you signed to indicate your commitment to repay
your student loan(s). If you have borrowed all
four years at Cedarville, you have completed both
a single-year note and MPN.
Cedarville Financial Aid Office
5
RIGHTS AND RESPONSIBILITIES GRACE PERIOD After
you graduate, leave school or drop below
half-time enrollment, you have a six-month period
before you begin repayment. This period starts as
of your last day of enrollment. During this
period you do not need to make payments on your
loan. A grace period applies to all Federal
Stafford Loans. For Unsubsidized Federal Stafford
Loans, interest will accrue during this time.
Cedarville Financial Aid Office
6

• REPAYMENT
• There are several repayment options available to
  you. Communicate with your lender or servicer to
  discuss alternatives if you are experiencing
  difficulties. (Remember It is your
  responsibility to communicate with the servicer
  if you are having trouble making payments.)
• TYPES OF REPAYMENT OPTIONS
• STANDARD REPAYMENT
• GRADUATED REPAYMENT
• INCOME-SENSITIVE REPAYMENT PLAN
• PREPAYMENT
• EXTENDED REPAYMENT

Cedarville Financial Aid Office
7
REPAYMENT STANDARD REPAYMENT OPTION The maximum
repayment period is 10 years, not counting
periods of deferments or forbearance. The minimum
monthly payment is 50.00, and will increase
based on the amount borrowed, as seen in the
following chart.
Cedarville Financial Aid Office
8
Cedarville Financial Aid Office
9
REPAYMENT GRADUATED REPAYMENT OPTION With
graduated payments, you begin to repay your loans
with smaller monthly payments that increase over
time. This repayment option is based on the fact
that your income will grow over time to cover
increasing loan payments. The amount of interest
you will repay is higher in this plan as compared
to the standard repayment plan.
Cedarville Financial Aid Office
10
REPAYMENT INCOME-SENSITIVE REPAYMENT PLAN With
Income-Sensitive Repayment, the borrower makes
payments based upon a percentage of their monthly
gross income. The monthly payment has to be equal
to the monthly accrued interest.
Cedarville Financial Aid Office
11
REPAYMENT PREPAYMENT As a borrower, you have
the option of prepayment, or paying all or part
of your student loan anytime without penalty.
Prepayment substantially reduces the amount of
interest paid over the life of the loan.
Cedarville Financial Aid Office
12
REPAYMENT EXTENDED PAYMENT OPTION FEDERAL
CONSOLIDATION Consolidation permits eligible
students who are finished with their education to
combine various loans and loan programs and
lengthen their repayment term there by lowering
their monthly payment. Loan consolidation is a
helpful debt-management tool that will extend
your repayment term and lower the monthly
payment. However, this will mean, that you will
pay more interest over the term of the loan.
Cedarville Financial Aid Office
13

• FEDERAL CONSOLIDATION
• ELIGIBLE LOAN PROGRAMS
• Federal (subsidized and unsubsidized) Stafford
  Loans
• Federal Perkins Loan

Cedarville Financial Aid Office
14

• FEDERAL CONSOLIDATION
• ELIGIBLE LOAN CONSOLIDATION FACTS
• Interest rate will be calculated on the weighted
  average of all underlying loans rounded-up to the
  nearest one-eighth of one percent.
• Married students may jointly consolidate their
  loans.
• Borrowers may pre-pay all or part of
  consolidation loans at any time.
• Borrowers are allowed 180 days after
  consolidation to add any omitted loans.
• Defaulted borrowers may be eligible for a federal
  consolidation loan only after they have made
  satisfactory repayment arrangements to the holder
  of the loan, or by agreeing to repay the federal
  consolidated loan through income-sensitive
  repayment.

Cedarville Financial Aid Office
15

• FEDERAL CONSOLIDATION
• ADVANTAGES OF CONSOLIDATION
• Reduces monthly payment
• Repayment term increased
• One payment made to one place
• DISADVANTAGES OF CONSOLIDATION
• Total amount of interest higher
• May lose some deferment options
• May lose certain incentives offered through
  servicer or
• lender

Cedarville Financial Aid Office
16

• FEDERAL CONSOLIDATION
• REPAYMENT TERMS
• Most consolidation programs offer two or more
  repayment options.
• EQUAL-LEVEL MONTHLY PAYMENT PLAN
• GRADUATED PAYMENT PLAN
• INCOME-SENSITIVE PLAN
• EXTENDED PAYMENT PLAN

Cedarville Financial Aid Office
17
FEDERAL CONSOLIDATION REPAYMENT
TERMS EQUAL-LEVEL MONTHLY PAYMENT PLAN Same
monthly payment for the life of the
loan. GRADUATED PAYMENT PLAN Interest-only
payment for a fixed number of years, then
graduated amount for the remaining repayment term.
Cedarville Financial Aid Office
18
FEDERAL CONSOLIDATION REPAYMENT
TERMS INCOME-SENSITIVE PLAN Allows borrowers to
have their payments based upon a percentage of
their monthly gross income. Payments must be at
least equal to the interest that accrues
monthly. EXTENDED PAYMENT PLAN Is limited to
borrowers with outstanding principal and interest
in Federal Family Education Program loans
totaling more than 30,000. The lender may
schedule the borrower for standard or graduated
installments over a period not to exceed 30 years.
Cedarville Financial Aid Office
19
FEDERAL CONSOLIDATION REPAYMENT PERIOD To
figure out the maximum length of your repayment
period, add the amount owed on all eligible loans
and determine the balance.
Cedarville Financial Aid Office
20
DEFERMENT AND FORBEARANCE What if after
budgeting and careful management you find
yourself having trouble making monthly payments?
There are a number of options that can help
you. DEFERMENT An arrangement in which
principal and/or interest payments are
postponed. FORBEARANCE A temporary
postponement or reduction of monthly payment
obligations due to financial hardship.
Cedarville Financial Aid Office
21

• DEFERMENT AND FORBEARANCE
• TYPES OF DEFERMENTS
• (For borrowers whose first loans were disbursed
  after 7/1/93.)
• IN SCHOOL
• GRADUATE FELLOWSHIP OR REHABILITATION
  TRAINING

Cedarville Financial Aid Office
22
DEFERMENT AND FORBEARANCE DEFERMENT
OPTIONS IN-SCHOOL (No Time Limit) All students
who are attending a Title IV eligible
institution, whether or not that institution
participates in the loan program. The borrower's
enrollment status for the current academic period
must be certified by an official of the school
attended. Applicable to all Federal Stafford,
Unsubsidized Stafford, Perkins and Consolidation
Loan borrowers.
Cedarville Financial Aid Office
23
DEFERMENT AND FORBEARANCE DEFERMENT
OPTIONS GRADUATE FELLOWSHIP AND REHABILITATION
TRAINING (No Time Limit) All students who are
attending a Title IV eligible institution,
whether or not that institution participates in
the loan program. The borrower's enrollment
status for the current academic period must be
certified by an official of the school
attended. Applicable to all Federal Stafford,
Unsubsidized Stafford, Perkins and Consolidation
Loan borrowers.
Cedarville Financial Aid Office
24

• DEFERMENT AND FORBEARANCE
• REQUIREMENTS FOR DEFERMENT
• Cannot be 270 or more days delinquent.
• Your request for a deferment must be made in
  writing.
• You must have a loan that is eligible for
  deferment.
• You will be required to provide the necessary
  documentation.

Cedarville Financial Aid Office
25

• DEFERMENT AND FORBEARANCE
• DEFERMENT FACTS
• For subsidized Federal Stafford Loans, the
  government will pay
• the interest during the deferment period.
• For Unsubsidized Federal Stafford
  Consolidation loans, the
• borrower is responsible for all interest
  that accrues during the deferment period. The
  borrower has the right to pay the interest or
  defer interest payments.
• All deferred interest that is not paid will be
  added to the principal when repayment begins.
• To request the proper deferment form, contact
  your servicer.

Cedarville Financial Aid Office
26
DEFERMENT AND FORBEARANCE FORBEARANCE A
forbearance is temporary postponement or
reduction of payments and is excluded from the
period of repayment. NOTE A forbearance may be
granted for no more than a 12-month period. To
request or apply for a forbearance call your
servicer.
Cedarville Financial Aid Office
27
DEFERMENT AND FORBEARANCE FORBEARANCE
OPTIONS UNEMPLOYMENT (3-Year Limit) Currently
unemployed and conscientiously seeking but have
been unable to find full-time employment in the
United States that involves at least thirty (30)
hours of work per week and is expected to be at
least three (3) months in duration. Federal
regulations require this deferment be granted for
six month intervals, although a total of
thirty-six (36) months of unemployment deferment
are available.
Cedarville Financial Aid Office
28
DEFERMENT AND FORBEARANCE FORBEARANCE
OPTIONS UNEMPLOYMENT (Continued) (3-Year
Limit) In order to be eligible for this
deferment, the borrower must register with a
public or private unemployment agency or a school
placement office within fifty (50) miles of
residence, or must certify that there is no
appropriate public employment. Applicable to all
Federal Stafford, Unsubsidized Stafford, Perkins
and Consolidation Loan borrowers.
Cedarville Financial Aid Office
29
DEFERMENT AND FORBEARANCE FORBEARANCE
OPTIONS ECONOMIC HARDSHIP (3-Year
Limit) Earning less than minimum wage, earning
less than poverty level for a family of two, or
other criteria established by the U.S. Department
of Education. Must reapply every 12
months. Applicable to all Federal Stafford,
Unsubsidized Stafford, Perkins and Consolidation
Loan borrowers.
Cedarville Financial Aid Office
30

• DEFERMENT AND FORBEARANCE
• CATEGORIES OF A FORBEARANCE
• DISCRETIONARY FORBEARANCE
• REDUCED-PAYMENT FORBEARANCE
• MANDATORY FORBEARANCE
• MANDATORY ADMINISTRATIVE FORBEARANCE

Cedarville Financial Aid Office
31
DEFERMENT AND FORBEARANCE DISCRETIONARY
FORBEARANCE A forbearance may be granted at the
lender's discretion to the borrower who is
experiencing temporary financial
difficulty. REDUCED-PAYMENT
FORBEARANCE Under this type of discretionary
forbearance, the borrower or endorser and the
lender agree in writing to establish temporary
repayment terms for the duration of the
forbearance that may be inconsistent with the
minimum annual payment amount.
Cedarville Financial Aid Office
32

• DEFERMENT AND FORBEARANCE
• MANDATORY FORBEARANCE
• Upon receiving a borrower's request and
  documentation required to support the borrower's
  eligibility, a lender must grant a forbearance.
  In all cases, the lender must provide the
  borrower with a written agreement that explains
  the terms of the forbearance. The following are
  situations that would be eligible for a Mandatory
  Forbearance.
• Internship or Residency
• Debt Exceeds Monthly Income
• National Service, Loan Forgiveness, or
  Department of Defense Repayment.

Cedarville Financial Aid Office
33

• DEFERMENT AND FORBEARANCE
• MANDATORY ADMINISTRATIVE FORBEARANCE
• This type of forbearance does not require the
  written request of the borrower.
• Local or National Emergency
• Military Mobilization
• Disasters

Cedarville Financial Aid Office
34
DELINQUENCY Failure to make your loan
payments on-time results in your loan becoming
delinquent. If you are more than 60 days late on
making your payments, your delinquency will be
reported to national credit bureaus. Federal
Stafford Loans are exempt from Bankruptcy
meaning that bankruptcy will not erase the debt
of a Federal Stafford Loan.
Cedarville Financial Aid Office
35

• DEFAULT
• When your student loan delinquency reaches 270
  days past the due date of your payment, you loan
  will be declared in default.
• Defaults are reported to national credit
  bureaus and remain on your credit report for
  seven years.
• The entire unpaid amount of your loan,
  including interest, will become immediately due.
• The Federal Government may collect loan
  payments from federal and state income tax
  refunds, and possibly garnish wages.
• You may be ineligible to receive any federal or
  state financial aid funds.
• Once your loan is in default, it's too late to
  check the options of deferment, forbearance, and
  consolidation. A default will immediately trigger
  unpleasant consequences. Be sure to communicate
  with your lender before you run into this problem.

Cedarville Financial Aid Office
36
OMBUDSMAN The U.S. Department of Education has
established an Office of Student Financial
Assistance (OSFA) Ombudsman to assist students in
resolving disputes related to their guaranteed
education loans. The OSFA Ombudsman can be
reached Internet http//sfahelp.ed.gov
or http//ombudsman.ed.gov Toll-Free 1-87
7-557-2575 Mail OFFICE OF THE
OMBUDSMAN U.S. Department of Education 400
Maryland Avenue, SW Washington, DC 20202
Cedarville Financial Aid Office
37
Contacting Your Loan Agency
Cedarville Financial Aid Office
38
Thank You! And Congratulations!