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Smart Money 101: Student Loans and Repayment


Hi everyone, my name is Kelsey Woodford an I am the Assistant Director in the Office of Financial Literacy This video is going to cover student loan types in repayment

So let's get started OK So first, just a little bit about our office So again, we are the Office of Financial Literacy We are here to help students really master their finances, both while you were here at SU as well as when you graduate

Some of the ways we do that is we host workshops and presentations, similar to this one, as well as we have access to one-on-one coaching And so we are still holding these coaching sessions You can have a virtual one, and it's really here to help you just work through any personal finance issue that you're going through, especially in these times So we're here to provide you information, education, tools resources, and really just help  So the way you can schedule an appointment is you can email our office at finlit@syr

edu Or you can go through Orange Success So also, right now we have a COVD-19 resource page So if you go on to our website under the Smart Money Resource page you'll find that resource And it's not just for Syracuse students or college students, it's really for anyone

So it has resources on food, unemployment, housing- really anything we could find, we put that together So definitely check that out and definitely pass that information along, and again if you are being affected by this, definitely set up an appointment and we can kind of help you figure out the best course of action and point you towards different resources and tools Yeah, definitely check that out And again, we're just here to help you OK, so student loan types in repayment

So, first things first, with student loan types were going to get into this a little bit later, but there's both federal loans and private loans And so a lot of this information is going to be about federal loans So federal loans is the loans you would have gotten when you submitted your FAFSA You got that financial aid package-those were the loans that were included in there So subsidized, unsubsidized, and parent plus loans

Those are your federal loans Private loans- we're going to go over them a little bit-but really, all of the different repayment terms interest All of that is going to be set by the lender So for your federal loans, where you would just want to find some good information about them is  Studentaidgov

You would want to log on with your FSA ID It's the same email and password from when you set up your FAFSA That same login information There you're going to find your loan balance, a repayment estimator, which is really helpful, as well as who your loan servicer is So when you go repay your student loans, you're not going to repay them to Syracuse

You're not going to repay them to the Department of Ed directly You're going to repay them to this company There's multiple loan servicers out there And they work on behalf of the Department of Ed And so it's good to know who they are

It's good to go ahead and set up your account There's a lot of scams out there, so it's really important to know who should be reaching out to you and who you should be giving your information to about student loans There's also NSLDS, so that is the National Student Loan Database that also will show all of your federal student loans, the interest on them, and your loan servicer Just another place to go You're still going to use your same FSA ID login again

Another good place for your information regarding your student loans OK, so let's get started So federal loan exit counseling you would need to complete this if you are graduating or if you are leaving school So basically you can complete that on studentaidgov and it's going to include everything you need to know when it comes to repaying your student loans

Everything The good thing is it's going to pull all of your loan information, so it'll tell you your loan balance, how much you borrowed, what types of loans you borrowed, as well as the repayment estimator It's going to be based off of your own information, so you're going to enter all of that in It's really personalized Again, it just really gives you all the information you know to be able to be prepared to repay your student loans

It really helps with the default rate Again, just being informed you can make better decisions as well as it is a graduation requirement You can schedule a Smart Money Coaching appointment and we can walk you through it even now over zoom So it's really just good to have someone there to kind of guide you answer any questions you might have an just work with you on what could be the best decision for you The types of student loans, we've touched on this a little bit, but there are direct subsidized and unsubsidized

Main  difference here Is subsidized loans It's in the name The interest is subsidized, so interest has not been occurring While you have been enrolled at least half time

And so what you owe back is just going to be principle Unsubsidized loans However, the interest is not subsidized, and interest has been occurring the whole time that you've been enrolled So these are the two loans that are available to undergrad students, if you submit that FAFSA, you're going to be eligible for these types of loans Then we get into private loan, so private loans, it's another type of source to pay for your education However, you do have to apply to a lender

A credit check is required, so most likely you as a student would have potentially had to have gotten a cosigner So a family member or parent to cosign these ones with you The interest rate and the repayment again, it's all going to be set by that lender So when looking into your private loans that's when you want to log on to that account and just see what the status is on those Then there's Direct Plus Loans for undergrad students, it's going to be the Parent plus loan, so a parent would have had to apply and taken out this loan in their name, it's not going to be in the student's name, to help pay for your education

If you are a graduate student, you would have been eligible for an unsubsidized loan as well as a graduate plus loan Works the same way You still apply It is based on credit, a man It would have been an additional source to pay for your education

So that's kind of the four types of student loans So now we're gonna get into the repayment plans There are multiple repayment plans There's not just one up, and I think for federal loans there is some more flexibility than I think people initially think so first, again, you have a six month grace period

So when you graduate or leave school, you have from that point, 6 months to start repaying your loan So you graduated in May, your first bill is not going to come till November So you have plenty of time to kind of figure out what your next step is And so with that you can take the time to figure out which repayment plan is going to work best for you You can change repayment plans

Don't think that if you pick one that's it You can also pay more than the minimum amount You definitely can do that to pay off your loans  more quickly Again, if you're wanting to talk through what option might be best for you, can't say this enough, make an appointment with the Smart Money Coach This is really helpful in making these decisions

So first you just have your standard plan So it's going to be the same payment, every single month for up to 10 years The payment amount is going to be based on how much you borrowed Basically you're going to pay the least amount of interest in this repayment plan And it's just going to be the set amount

It doesn't matter if you get married, it doesn't matter how many children you have, it doesn't matter what how much money you're making at your job Your payments just going to be that We then have graduated So that repayment period is also up to 10 years, but basically the payments going to start low and then it's going to go up every two years, and that's why it is called graduated So it could start at maybe $100 but you know, in year eight you could be at like $400

So something to take into consideration is that the payments just going to go up every two years We then have extended You have to borrow more than 30,000 to qualify So when you are completing exit counseling, again, it's going to pull your information and if you don't qualify for extended, it's not going to be available to you, so you'll know that ahead of time There's both extended, fixed and extended graduated

So kind of like extended standard plan, which like we just talked about, which means same payment every single month not affected by your job or family changes And that's going to be just a fixed amount-but instead of 10 years, it could be 12 or 15 years And then the same with graduated So instead of 10 years is just 12 years of your payments going up every single year So now we're gonna get into Income Driven plans

There are four types of income driven What is there to do is just base your payment off of what you're making Its intended to help it be affordable for you So this is where things like your income and your family size is going to affect your payment So you do have to certify your income every single year

And your payment will be adjusted accordingly It takes into consideration if you do get married, if you do have dependents- all these different life changes happen And every payment periods going to be longer So instead of 10 or 15 years, it's going to be 20 to 25 years If you haven't paid your loan balance in that timeframe, anything after the 20 or 25 years is gonna be forgiven

I linked an article here from studentaidgov that just goes into like every nitty gritty detail on, which I'm not going to go over until like every single detail here, but just know that you can read more about it on studentaidgov So these are the types Again, there's four types

  So basically there's the revised pay as you earn It's gonna be 10% of your discretionary income, so that means they're going to look at your income, but they're going to take into account, you know, like bills you have to pay, like cost of living, and they're going to look at it After that There is a percentage that they use, and so 10% of your discretionary income, and then the repayment period is going to be 20 years for undergraduate loans, 25 years for grad loans So it's going to depend on what you borrowed to go to

Pay as you earn, it's gonna be 10% of your discretionary income, but it's never going to be more than the standard repayment amount So that's a good thing to notice Is that if you put in your information and like what your salary is, some of these might be more than what your standard amount would be So let's say your standard payment is $200, but you put in your information to do income base, and they say, well, actually, based on your income, you can pay $250 So you revised pay as you earn could be 250

If that makes sense So again when you're looking at the repayment estimator, it's going to estimate based on what you your projected salary is, or if you already know what salary you're going to have, you can put that information in IRB plans So that's gonna be again 10%, but no more than your standard repayment plan Then ICR 20% or what you would pay on repayment plan with a fixed payment over 10 years

Uhm, and every payment plan for ICR is 25 years for income based IRB is 20 years So all of this is confusing I understand Again it's a lot of information, so if you are picking an income based repayment plan, you do have to fill out an application

And send it to your loan servicer You are going to have to certify your income You can do that all online It's relatively painless It's pretty straightforward, and on there you could easily just put give me the cheapest option,  give me whichever plan gives me the lowest payment amount

That's what I want, and you can just do that Or again, going to go back here The link right here goes into all those different details on that Also, each plan is kind of different in that way, but if you are like a little bit confused or want more information I'm gonna say it like one more time

Set up an appointment with the Smart Money Coach But again, the whole point of income based is just that you can have a payment that you can afford That's going to be based on your income OK, that's what's important is that you can afford your loan payment You're not going to default on your student loans

OK, so Public Service Loan Forgiveness So this is a federal loan forgiveness program for people for borrowers that are working under a qualifying employment So what is a qualified employer? It would be some kind of publicly funded identity So if you're working for a federal, state, local, tribal city, In a funded government position or a registered nonprofit They have to be a 501C3

So you work there and you make 125 payments under a qualifying repayment plan, which would be income based repayment plan So you basically you're going to pay on those loans for 10 years and at the end of 10 years you qualified to have the remaining balance forgiven I linked another article here to read a little bit more about it But just some things to know You don't have to keep the same job for 10 years

You can switch jobs, but again, it's they're going to have to fall under the qualifying employer and it doesn't have to be 120 In order, it just has to total up to 120 So if you graduate, you work at a nonprofit for three years,  you maybe go to grad school for two years During that time we are not going to pay on your student loans After that you work for maybe a state government You know that can all count

It just has to be total 120 payments Again, any questions definitely reach out Or you can read more here I should note, on top of having if you're an income based doing public service loan forgiveness, you're also going to, you know, for income based, you have to qualify your income every single year And for public service loan forgiveness, you're going to qualify your employment every single year

Both forms are on line Again, it's relatively straightforward, So deferment versus forbearance so deferment If you are currently in school, your loans are in deferment, which means basically you don't have to pay them in Subsidized loans are not accruing interest If you graduate and go back to grad school, your loans are going to go back into deferment

Forbearance is when you are not in school, you're paying back your student loans and you have some kind of economic hardship You can basically suspend your payments for a period of time With all of this, that's why it's so important to be in contact with your loan servicer, because if you are on the standard plan and something happens, you can either maybe switch to an income plan, maybe you can do forbearance You know there's options out there, so you again just don't default on your student loans It ruins your credit

It's not good for anybody So it's just good to know that you have these different options and that they will work with you So COVD-19 As of today, federal student loans interest rates are set to 0 And payments are suspended till September 30th

However, if you are senior right now in your graduating in May, you already have that 6 month grace period until November, and so you really don't have to worry about that right now Just because you are covered under that grace period But main thing that you would need to know is that interest rates are set to 0 I linked another studentaidgov announcement here relating to the coronavirus

But basically that's the update As it stands right now things could change and that's why it's really good to just keep up to date with them So some next steps Definitely log on to studentaidgov or the national student loan database just to check on the status of your student loans

Definitely also check on the status of your private loans If you are unsure if you borrowed private loans or what type of lens you do have-You can look online Contact your financial aid counselor If you are graduating or leaving school, please complete exit counseling

You can make it a virtual appointment with the Smart Money Coach and we can go over all of that with you We are happy to help or happy to talk through different options What could be best for you So definitely reach out And again, we're here to help

Thanks so much

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