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Resource Center Federal Loan Repayment Options: Choosing the Right Path after the Pause
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Resource Center Federal Loan Repayment Options: Choosing the Right Path after the Pause

Federal Loan Repayment Options: Choosing the Right Path after the Pause

Federal Loan Repayment Options: Choosing the Right Path after the Pause

This webinar, recorded in July 2023, discusses the end of the federal student loan payment pause. Interest resumed on all loans on September 1, 2023 and loan payments were due starting in October 2023. This webinar reviews the repayment options available to federal loan borrowers who re-entered repayment. We discuss income-based repayment options and Public Service Loan Forgiveness (PSLF) in addition to standard repayment options and best practices to make sure your federal loans remain in good standing after the payment pause.

Download the webinar slides to follow along.

Transcript
Good afternoon and welcome to today’s presentation, federal Repayment Options, choosing the Right Path After The Pause.

Please note that this transcript was auto-generated. We apologize for any minor errors in spelling or grammar.

[00:00:00] Good afternoon and welcome to today’s presentation, federal Repayment Options, choosing the Right Path After The Pause. My name is Sean Morrisey. I’m Director of College Relations at MEFA, and I have my colleague Stephanie Wells, who’s also director of College Relations at MEFA. She’ll be helping answer questions, um, behind the scenes.

And just so you know, the chat feature is disabled this afternoon for this webinar. If you have questions, you can use the q and a section of that to enter your questions, and we will answer those as they come in. And if we have a question that Stephanie thinks we should answer live, she will um, break in and we will answer that live for you as well.

So before we [00:01:00] get into the topic, I wanted to let you know a little bit about Vipa. So we are a state authority. We were created in 1982, um, by petition from a group of colleges in Massachusetts. Petition the state legislature in Massachusetts to create an authority to help. For families to attend colleges.

Since then, we’ve expanded to have savings plans and we do education for families. Um, and so we provide all of those things free to, um, people now across the nation. So you do not need to have any kind of connection to Massachusetts in order to.

So what we’re gonna go over today are federal loan repayment options, income driven repayment plans, and public service loan forgiveness to hopefully [00:02:00] help you, um, choose the right path as payments. Begin again after the payment pause.

So first of all, as you may have heard, the payment pause is ending. So interest will begin to accrue again on federal starting September 1st. The first payment will be due starting October 1st on your loan Federal loans. And if you haven’t chosen any type of loan repayment plan, you’ll.

And if you find that those payments under standard repayment are too high, you can choose other options, which we’ll go over to through today as well. So first of all, how standard repayment works. It is, it takes the balance of your loan. [00:03:00] It divides that into 10 years of equal payments. So those are monthly payments, a 20 payments that your, um, loan balance would be divided into, and then you have 10 years to repay that.

Um, if you make payments above standard repayment, you can pay that long. In shorter than 10 years. But if you choose standard repayment, that will be 10 years. And those are available for direct federal loans and for, um, the Federal Family Education Loan Program as well, which we’ll refer to as, um, from here forward.

And like I said, again, if you haven’t chosen a particular repayment program.

Standard repayment is eligible towards public service loan forgiveness, and we’ll talk about what public service loan forgiveness is later in this session. But [00:04:00] because public service loan forgiveness does forgive any balance left on the loans after 10 years, if you are in the standard repayment program, which ums off in 10.

Years of forgiveness through PS LF. But if you have made some payments in the standard repayment program and then you switch to another program and you end up taking more than 10 years to repay your loan, then any of those payments that you made under standard will qualify for public service loan forgiveness.

Dividing in over 10 years. Extended repayment divides those.

Instead of 20 equal [00:05:00] payments, and this, again, is available for direct or loans. Um, the extended repayment program is not eligible towards public service loan forgiveness. So if you are looking into public service loan forgiveness, which we’ll talk about later, these payments would not qualify for.

$30,000 to enroll in the extended repayment program. And while your payments will be lower on this, because you’re making, um, 300 payments rather than 120 payments, your monthly payments will be lower, but the balance that you pay over time will be higher because you are more interested accruing on that loan over 25 years.

So in the long run, this is the more expensive. Pay back your loans, but your monthly payments will be lower on this, um, payment plan. There’s also the [00:06:00] graduate graduated repayment plan, which is more expensive than the standard repayment plan. Again, because of interest and how this one works, is your payment start out lower at the beginning of the payment.

Period, and they step an increase each year on that. There’s 10 years to repay that. But again, since you are making smaller payments at the beginning and then larger payments at the end of the loan period, more interest is accruing on that loan at the beginning, and it ends up being a more expensive option, um, in the long run.

Your payments will start out lower under this payment plan. This one, again, is not eligible for public service loan forgiveness. So if you’re looking at, um, pursuing public service loan forgiveness, which we’ll again, we’ll talk about later in this session, um, this payment plan is not available towards that.

I [00:07:00] Federal consolidation before we go, and what federal loan consolidation is, is combining several federal into one direct consolidation loan. And the reason that you may want to do this is to take advantage of some of the repayment plans that we’ll be talking about in a minute that are only available under the direct consolidated loan program or to direct loans.

And also there are some other types of loans like Perkins Loans, um, that do.

Available to them. But if you do consolidate them into a direct consolidation loan, these payment plans become available to you. And what happens when you do consolidate your loan is there becomes a new loan with a new fixed interest rate. That is weighted average of all the loans that you’ve consolidated.

So they take that, [00:08:00] um, all the loans that you are consolidating, average those out and that becomes a new fixed interest rate for that loan. Um, your loans must be in repayment or grace period in order to consolidate your loans. So you cannot consolidate a loan while it’s still in, um, an in school status or in another status other than repaying or grace.

And then once you do consolidate the loans, there are the other repayment that we’ll in a can be.

A student cannot consolidate a plus loan borrowed by a parent. So the plus loan is in the parent’s name. So a student can’t include that in their consolidated loans. You also cannot consolidate any private loans that you may have. You can only consolidate federal loans on that in order to, um, start consolidation [00:09:00] process.

You can do that right on student aid gov. Um, and then you would choose the loans that you wanna consolidate from the federal loan portfolio that you have and start that consolidation process. There is no application fee. The process for federal loan consolidation could sometimes take, um. Through the whole process.

So you wanna make sure that you start the consolidation process with enough time in order to enroll in one of those repayment plans before repayment starts. So if you are looking at consolidating some your loans before the payment pause ends, you wanna start looking at that very soon. To consider with consolidation, um, you’ll be receiving one bill per month for all of those loans.

So again, if you do have something like a Perkins loan, which is a federal loan that’s separate from the direct loan program or the [00:10:00] loan, you’ll receive one bill per month for that instead of receiving a separate bill for each of those.

You can take that to one different loan program, or sometimes if you have three or more different types of loans that can, um, lower those monthly payment into just one payment rather than several. Um, again, you have access to all of these different income based repayment plans that will, and you can, um, switch any variable rate.

The fell programs or an earlier direct loan program to a fixed interest rate. Under this program, you do lose all of the borrower benefits from the original loans. So for example, if you did have loans under the Perkins Pro Perkins Loan Program, you wanna make [00:11:00] sure you take a close look at what some of.

If you.

Perkins Loan Program, those benefits would not be available to you anymore once you do switch to the new, um, consolidated loan program. So take a good look at what those borrow benefits are on your original loans before you pursue, um, consolidating those loans. Also consider that if you. The income based repayment plans or increase the length of repayment from the 10 year original repayment plan length under standard repayment to a longer, um, 25 to 30 year repayment plan that may cause a larger total loan [00:12:00] cost.

Again, because of interest accrual on those loans during that longer period of repayment. So let’s talk about some of those income driven repayment plans that are available, um, to consolidated loans and the direct loan programs. So how do these income driven repayment plans work? So they look at your post graduation income and they are.

On your income that it looks at yearly, based on your tax returns and depending on which option you select, you can pay between 10% and 20% of your discretionary income. We’ll talk in just a moment what discretionary income is and um, some of the plans do also require you to qualify for what’s called partial financial hardship, which will also go over in just [00:13:00] a moment.

Different, um, repay plans that are available are the income based repayment plan. There’s a very new plan that’s called save, which is savings on valuable education, which just became available in the last month, and this is replacing the.

To the new benefits under save, which are better benefits towards borrowers. We’ll also be talking about the pay you earn pay plan, and the income contingent repayment plan. Both of those are sunset on July 1st, 2024. What that means. No one will be able to enroll in those payment plans any longer after July 1st, 2024.

So if you do wanna take care, take [00:14:00] advantage of any of the benefits under the pay you earn plan, or the income contingent plan, you do wanna enroll into that prior to July 1st of next year.

The discretionary income is, and, um, under different plans, the discretionary income is determined a little bit differently. So currently under IDR pays to earn and repay. What they do is they take a look at your annual income based on your tax returns, and then they subtract 150% of the federal poverty guideline.

Um, and that becomes your discretionary income. Under the ICR plan, it’s your annual income. Subtracting 100% of the federal poverty guideline equals your discretionary income. So under the [00:15:00] ICR plan, your discretionary income will be a little bit higher than under IBR pays you earn and repay because it’s only attracting a hundred percent rather than 150% of the federal poverty guidelines.

Under the new plan that was just announced about a month ago, um, save, which is going to be the new repay. So if you are currently in the REPAY program, you’ll automatically transfer to the SAVE program and once, um, they start these benefits, which should be within the next couple of months, then they look at your annual income.

And subtract two 25% of the federal poverty guidelines. So your discretionary income under the safe plan will be lower than under any of the other plans, um, which will have that base income that we look at, what the payment is based on will be lower, so that that is a.[00:16:00]

So let’s talk a little bit about public financial hard, partial financial hardship, which is required to get into,

you do have financial hardship. In order to enroll in one of these plans, you don’t have to continue to, um, fall under a partial financial hardship. But when you first enroll in this program, you do have to show that you have a partial financial hardship, and that’s a little bit different under each of those plans.

Um, so under IBR. The amount that is due on the eligible loan under your standard repayment plan has to be greater than what? 15% of the difference between your adjusted gross income in what 150% of the poverty line for your family size in the state where you live. So if that standard repayment is higher than what, [00:17:00] 15% of the difference between your A GI and 150% of the property line, then you do show a partial financial hardship and you do qualify for enrolling in the IVR program for pay as You Earn.

Again, it’s looking at. Would’ve been monthly under that 10 year standard repayment plan. And if that is greater than 10% of the difference between your a GI and 150% of the poverty line for your family sides in the state where you live, then you would be considered to have partial financial hardship. And for the other income-based repayment plans, you do not have to show a partial financial hardship in order to enroll in those.

So let’s talk first about the different repayment plans. We’re gonna talk first about the newest one, which is saving on valuable education or saving. Again, this is replacing repay. Um, so if you [00:18:00] do enroll in repay, or if you are currently enrolled in repay, you’ll automatically be enrolled in Save once these new, um.

And they have.

Application available to enroll and save. So in order, if you do wish to enroll in the plan, you would just enroll in the plan and then you would over automatically into the plan once these benefits do become available. And again, the payments are calculated, um, for the current period up until July 1st.

On 10% of your discretionary income, so it’s a lower um, payment on that loan. But [00:19:00] after July 1st, 2024, they’re going to treat undergraduate loans that you have borrowed differently from any loans that you may have borrowed for studies. Your undergraduate studies. So after July 1st, it’s only 5% of your discretionary income is what your payment will be, um, for those undergraduate loans and 10% of the discretionary income for loans other than those for undergraduate studies.

So if you have graduate studies or. Other types of studies after you receive your undergraduate degree, those would be based on 10% of your income, the payment, rather than 5% of your income. So it’s a great benefit, um, starting in July 1st, 2024. For those undergraduate loans, they’ll be the lowest available payment for you, um, for that monthly payment.

And these are available for students who have borrowed through the direct loan program or through the [00:20:00] program. To plus borrowers and the maximum timeframe under this. So instead of 10 years, you have 20 undergraduate and there’s a great benefit that going. To, um, become available in 2000 and July 1st, 2024.

That if you do have low debt, so if you have undergraduate debt of under $12,000, you those payments, you would only have to pay for 10 years under that program. And then after you pay for 10 years, any amount that you have left on that balance will be forgiven for you. For each additional thousand that you borrow, um, they will add one year on that until the 20 years are.

So for example, if you are borrowing, if you had borrowed [00:21:00] $14,000, you would have 12 years to repay that. And then any balance left on the loan after 12 years of repayment would be forgiven. So, um, for undergraduate debt, if you have a balance above those amounts that are under 20 years, then you would pay those monthly payments based on your income for up to 20 years.

And after the end of 20 years, any amount that is left on that loan balance would be forgiven for you. And then for graduate loans. You would have 25 years to repay that, and then after 25 years, any balance left on that loan would be forgiven. There’s no income threshold for eligibility, so again, you don’t have to show that partial financial hardship in order to qualify for that.[00:22:00]

These payments do qualify for public service.

Cap on. So this payment amount will change annually based on the income that you report on your tax return, and you do have to disclose that tax return yearly to your servicer in order to remain in the payment plan. If you, um, don’t disclose that.

The income based repayment program back to, um, the standard repayment program, but there’s no cap based on that. So payments could potentially go above what standard repayment is. You can switch between these program programs, so if the payment becomes too high based on your income, you can switch back to the standard repayment program.

But, [00:23:00] um, again, if you are making payments towards forgiveness. Repayment, those payments would change. And again, your income is verified annually, um, based on. Amount is calculated based on that income. Currently, you do have to disclose that information to your servicer annually. They will be debuting a new system on July 1st, 2024, where you can automatically sign up to have the.

Every year based on your income. Um, but that is a voluntary program. And if you do end up, um, voluntarily signing up for that program to have your tax return information shared with your servicer annually, your new payment amount will be [00:24:00] automatically calculated every year. And just be aware.

Being withdrawn for your loan, make sure that you are ready for a potentially larger amount to be taken outta, um, your account automatically to pay for the that new payment amount.

Is if your payment amount.

All of that unpaid interest between that payment amount and what the amount of the interest is. Accruing is forgiven monthly, so there’ll be no negative amortization on that loan, so you won’t have interest accruing on that loan because you haven’t been able to cover the amount of interest that’s accruing on that loan [00:25:00] every month.

The second, um, plan that we’re going to talk about is the income contingent repayment plan. Under this repayment plan, payments are calculated based on the lesser of 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years of adjusted according to your income.

These are available only for the direct loan program, so if you have available for this program, you do have to consolidate those, um, in order to make those eligible. And have that consolidated into the direct loan plan, you would can make payments on this program for 25 years, and if there is any balance left after 25 years, then the remaining balance of that loan is forgiven.

Any [00:26:00] forgiveness that you receive on that balance is a taxable event. So if you do have any amount left on that tax. On that balance, you do have to report that as income for the year that you receive forgiveness. Again, you don’t have to show a partial financial hardship in order to qualify for this.

There’s no income threshold for funds for eligibility. This plan is eligible for public service loan forgiveness. Again, there’s no cap on the payment amount. You have to go through the same annual income verification for all these income, um, based repayment plans. You do have to have that same annual verification on your income.

The interest is a little bit different as to how they handle it on this one where capitalized interest cannot exceed 10.

After [00:27:00] you meet that threshold, interest is still accruing on that loan, but they will not capitalize that interest. What capitalization means is any interest that is accruing on the loan is then added to the principal and your principal balance is based on that new amount of the interest that has approved plus the original principal on the loan.

So there’s also the income based Repayment program, and there are two different kinds of income based repayment programs. There are ones that are available for borrowers who had loans before seven, one of 2014, which we’ll talk about now. And there’s also another program for loans that you have after seven one in 2014.

So the first one for the older loans before July 1st, 2014, is available for both [00:28:00] direct and loans. And you have to make those payments for 25 years under this program, after which that balance is forgiven and again, it is taxable. Um, you do have to show. A partial financial hardship in order to enroll in this program.

Again, you don’t have to maintain that every year, so when you do verify your income annually, it’s not going to throw you out of the program. If you no longer meet the public, the partial financial hardship, you just have to show that to originally enroll in that it’s eligible for public service loan forgiveness.

Your payment is 15% of your discretionary income, and that’s based on your family income if you’re married and filing jointly. Um, and it’s also capped at what the 10 year standard repayment would’ve been, so your payments will never go above what your standard repayment would’ve been. So that’s one of the good [00:29:00] benefits of the income-based repayment program.

Again, your income is verified annually and there’s no limit to the interest capitalization on this one. So, um, if your payments are very low and that’s not taking care of the interest that’s accruing on your loan, the interest can capitalize on that and add

so.

This one is available to only direct loan borrowers. So if you have bell loans, you do have to consolidate those into the direct loan program in order for those to qualify instead of 25 years on the payments for the loans before 2014. You have 20 years that you have to make payments out on those loans before you receive any kind of forgiveness on the loan.

Partial financial hardship in order to [00:30:00] enroll in this plan. But again, you do not have to maintain it. Eligible for public service loan forgiveness payment under this plan is based on 10% of your discretionary income. And again, that’s based on the whole family income if you are married and finally jointly.

And again, it’s capped at what 10 years standard repayment would’ve been. You do have to have your income verified annually, and again, there’s no limit to the interest capitalization on that one as well.

And then pay as you earn. You must be a new borrower on October 1st, 2007, so you mustn’t have any loans taken out before that. And have had a low dis on or after October 1st of thousand 11. In order to qualify for this plan, this is one of the plans that Sun on July 1st, 2024. So if you do wanna enroll in this plan, you have to [00:31:00] do so before that date.

This one is available only for direct loan borrowers, so if you do have loans, you do have to consolidate those into the direct loan program in order to enroll in this plan. You have payments on this loan for 20 years after which your remaining balance is forgiven. And again, that’s taxable. You do have to show partial financial hardship, um, which we talked about earlier in order to qualify for this plan.

But again, you do not need to maintain that every year. It is eligible for public service loan forgiveness. Your payment is based on 10% of your discretionary income. Again, based on family income, if you’re married and filing jointly, there is a cap on these based on what 10 year standard repayment would’ve been.

You do have to verify your income annually on this one. Again, capitalized interest on this one can exceed 10% of the amount of the loan at the [00:32:00] time. The loan entered the plan again after that period. Interest does accrue but does not capitalize on that.

Pay as you earn. And again, this one will automatically transition to save, which has better benefits for, for borrowers. So that that’s a good thing that it’ll be automatically transitioning to that. But I wanted to talk about what the current benefits are under repay. Um, because you do sign up for repay if you do want to take advantage of the new benefits that are available under save.

So for until those new benefits become available in the next couple of months, the benefits that you would have under repay will go over right now. So you do have to be in the direct loan program in order to qualify for repay. So if you have fellow loans, you do have to consolidate in order to make those eligible.

For direct, [00:33:00] you make repayment, make payments on this. Up to 25 years, and then if there’s any remaining balance that will be forgiven and it is taxable, you do not need to show a partial financial hardship to qualify for. It’s eligible for public service loan forgiveness, and the payment is based on 10% of your discretionary income.

The spouse’s income is included in this calculation regardless of filing status for repay. So even if you file separately from your spouse, um, your spouse’s income is included under the REPAY calculation. There’s currently no cap on repayment under the REPAY program, so if your payment based on your income is larger than it would’ve been under the standard repayment.

Your payment will be based on your income only. There is no cap on that. Again, you have to have your income verified annually [00:34:00] and currently under repay. When your monthly payment does not cover the interest that’s accruing on your loan, you are only responsible for 50% of the accrued and unpaid interest.

The rest on of the interest is forgiven, so the other 50% of that. Forgiven for you. There is no cap. However, on capitalized interest, however, once repay does transition to save, you’ll have those more. Um, lenient interest, um, rules applied to. Interest above the amount of your monthly payment will be entirely forgiven.

So once that transitions to save, you’ll have access to that new benefit. So let’s take a look at, um, [00:35:00] the different repayment plans. How that would, for someone who borrowed for $40,000 in the direct loan program, $20,000 unsubsidized and $20,000 subsidized at an interest rate of five and 5% with an income of $45,000.

She’s single, so there’s no spouse income to worry about, and we’re going to, um, expect her income to increase at a rate of 5% per year. So under repayment, her payments would be 4 34 for the entire life of, um, for a total paid

total

and pays months for graduated repayment. Again, she’s paying that over 20 months. Her initial payment will be two $47 [00:36:00] because under the repay plan, remember your payments start out lower, but then step up each year under that program, so the final payments would be 7 41 a month. Under that repayment program, again, you’re paying for 20 months, so you’re paying lower at the beginning, higher at the end, you’re paying a total of 55, so it’s a little higher than repayment.

Interest of $15,000, um, accrues on that loan. Based on those lower initial payments. Under extended payments, then you are dividing those payments over 300 months rather than 120 months. So you have lower payments in $246 each month under that.

Is.

More than the 10 year standard repayment, but you are making lower [00:37:00] payments over the time. Um, ’cause you’re paying that over a longer period of time and you’re paying $33,690 in interest online payment plan, um, rather than the $12,000 of interest, the 10, 10 year standard repayment program. So those are things to think about when you’re looking at these different repayment plans.

What is the total amount that you have to pay? Over the life of a loan. And sometimes if you’re in a situation where you just need to make the amount of your monthly payment as low as possible, um, some of these other repayment plans, it may be helpful to you, but realize that you may have to pay more, um, over the long run for those those payment plans.

And you can switch between any other repayment plans at any time. Um, so if you do have to use one of the lower plans for just a short period of time to get those lower payments, you can do that. And then if you look [00:38:00] under all of the different income-based repayment plans, um, they do vary in what the initial and final repayment amount would be and the total pay and the total interest pay.

Interest that is accruing on those. And, um, the total time and repayment does vary on those.

So how do you designate a repayment plan? If you do wanna take advantage of one of these different repayment plans, you will apply, um, either through your servicer or you can go right to student aid.gov. And apply or manage your student aid driven program right on that plan. And you can log in on student aid.gov

with your F-S-A-I-D and you [00:39:00] can enroll right there into one of these repayment plans. Or you can just contact your servicer and they will tell you what their process is for enrolling in one of those income-based repayment plans. So I’ve been talking a lot about public service loan forgiveness and which plans do qualify for this, but what exactly is public service loan forgiveness?

So in order to receive public service loan forgiveness, you have to have what’s called an eligible loan. We’ll be talking about what is an eligible loan in just one moment. Make 120 eligible payments on those, um, while you are employed at an eligible employer. So we’ll talk what all of those, um, different aspects of public service loan forgiveness are.

But that will be the formula. So you have to have an eligible loan, make 120 eligible [00:40:00] payments while you are employed at an eligible employer. And then once you do that, for those 10 years of payments, any balance left on your loan will be forgiven. Um, so what are.

Or a federal direct consolidated loan. So if you have a Perkins loan or the fa, federal Family Education Loan, the loan program, and consolidate those into a federal direct consolidated loan, those become eligible for public service loan forgiveness, along with the federal direct student loans. That is what an eligible loan is, the eligible payment.

You have to, um, make payments after October 1st. They have to be an on time payment. What that means is it has to have been received within 15 days [00:41:00] of the due date of the payment. So an early payment or a voluntary payment is not considered an eligible payment type. These are your monthly payments that you’re making on the loan, and they do have to remain on time within 15 days of the due date.

And it also has to be for the full amount of the bill payment, so you can’t make a partial payment. It has to be the full, um, payment amount, and it also has to be in a qualified plan. So standard is a qualified plan or one of the eligible income driven repayment plans that we just talked about and we discussed which one of those are eligible for public service loan forgiveness.

And those payments have to be made while you are employed full-time at a qualified employer. So what is a qualified employer for public service loan forgiveness? So an eligible employer is a government organization at any levels. That could be the US federal government, state government, local [00:42:00] government, or a tribal organization.

And this includes the US military. Or if you work at a nonprofit organization that’s considered tax exempt as a 5 0 1 under the internal rev revenue service code. Um, and if you do work at a nonprofit, but you’re not sure if it’s a 5 0 1, you can. Or HR department at your organization and ask them if they’re considered a 5 0 1 and they’ll be able to let you know if they’re, and if you qualify for public service loan forgiveness, or if you’re serving as a full-time AmeriCorps or Peace Corps volunteer, um, then you would qualify as well.

The eligible employer, there is an employer search tool that we, I’ve linked here that is on student aid gov under PS [00:43:00] LF employer search, and we’ll be sharing these slides with you so you’ll have that link enabled for you in the slides that you can go to.

If that employer qualifies for PSLL. You must be considered a regular employee of the organization, not a contractor Normally. The easiest way to determine if you’re a regular employee and not a contractor is if you receive a W2 from your employer every year when it’s tax time, not a 10 99. If you’re receiving a 10 99, usually that would mean you’re considered a contractor.

If you’re receiving a W2, that usually means that you are considered a regular employee. Again, you can check with your human resources department or personnel department at your organization to find out if you’re considered a [00:44:00] regular employee and not a. So again, if you make those 10 years of repayment on the eligible loan while you are employed at an eligible employer, you do qualify for public service loan forgiveness.

That does not have to be consecutive 10 years of payments on that. So if you were working with an eligible employer, you left, um, that kind of eligible employment and are working in the public sector for two years. Come back in our working at a nonprofit or government agency again, you can then have qualified payments once again under the that qualified towards PSL lab, that period of two years where you worked in the public service loan forgiveness.

Those payments don’t count towards public service loan forgiveness, but the prior payments that you made before leaving. Do [00:45:00] count and you can count those back plus those future years that you’re working at the eligible employer. You don’t need to enroll in public service loan forgiveness at the beginning of that.

So there is no form that says, I wish to, um, enroll in public service loan forgiveness. But there is a form that you fill out that shows that you have, um, been working at an eligible employer. Of each year, and you should submit that every year showing that you’re doing that qualified service because oftentimes it is difficult if you go back to an employer after 10 years or so and ask them to recreate, um, the time that you were employed with them.

Some companies do. Employee records after a period of time. So it would be hard for them to, um, be able to verify that you were working [00:46:00] at them for that period. So the best thing to do is to complete the form each year that you are completing qualified StarVest. And again, all of this information is right on student aid gov that you can fill out that.

Form each year. And, um, send that information in that you are doing the qualified employment in service. Once you do send in that first year of qualified work with that PSLF form, then you’ll receive information from your servicers showing how many qualified payments you’re making towards that plan while you are doing qualified service on that.

So you’ll be able to keep track of that once you do send in that first. Showing service. Again, you don’t have to do that annually. So if you, [00:47:00] for some reason you miss a year or you didn’t know about public service loan forgiveness, um, while you’ve been doing this work for several years, you can do that at the end of the 10 years of service.

But we don’t recommend that you do that because again, it may be hard to recreate those years of service. But once you do reach those 120 qualified payments while doing 120 months of service at an eligible employer on an eligible loan, any amount that you have left on that loan will be forgiven, so you don’t have to make any more payments and you won’t owe anything left on that loan, and you’ll receive information showing that your loan is forgiven.

Um, sometimes this process may take some time for that loan forgiveness to go through, so make sure that you are watching and seeing [00:48:00] what, um, that process looks like at that point.

We do have, um, some information that was developed by naspa.

What are the.

Log into your servicer information. If you don’t know who your servicer is on your loan, you can log into NSL Ds, which is nlds edb. Log into your account there and it will show you who the servicer is on your loan. It will also show any federal that you might have, um, and in different. Federal Perkins loan that will probably have a different servicer than any direct loans or fell loans that you may have.

So you [00:49:00] wanna take a look at what all of those different loans are that you have in there and review those with each of the servicers. And then, um, you wanna make sure that your information is up to date with each of those servicers so that they can communicate with you properly, make sure they have a proper email for you, a current address for you.

It may have been a few years since you looked at, um, your servicing information because the loans have been. Um, in payment pause. And so you may not have been looking at those as regularly knowing that you don’t have to make payments. So make sure all of that information is up to date. Um, it may have been a little bit of time since you completed your loan exit counseling, so hopefully the information that we went over today will help you determine, um, what.

Payment plan best for you. And now with the advent of the new Save program, if you did determine a repayment program when you did your exit counseling, that’s [00:50:00] different from what you think you wanna enroll in today, you can go again through your servicer or through student aid.gov and select a new payment plan for that.

Because in the three years since, um, you may have been making payments. There may be a different payment plan that works best for you now and, um, confirm that you’re on that best plan with your servicer. And once you selected your plan, you want to change that again with your servicer or on the portal at student aid do gov.

It’s also a good time that if you set up for automatic payments on your loans in the past. You need to go back in and reverify that information with your servicer so they can, um, do automatic payments on those loans. Again, that’s not gonna automatically happen for you, so you want to make sure that you do renew that information with [00:51:00] your servicer.

So if you were expecting to just go right back into automatic. It was doing before the payment pause. If you were making payments before the pause, you do have to reelect for that to happen. Um, and if you have made payments yet on the loan and haven’t set up any kind of automatic payment plan, now is the time to start doing that with your servicer, um, before the low payment start up.

So.

So again, you wanna confirm your loan servicing account. Log into your loan servicer. Again, reauthorized and select the auto debit and review the amount of the payment that is due to you and what the due date is on that loan, and take a look at what that payment is. Um, if it looks different than you thought it might, based on those repayment plans, you might wanna.

Use, um, [00:52:00] some of the loan calculators that are out there on student aid gov as well to take a look at what that payment may be under one of the other repayment plans. And, um, select one of those before the payment pause ends. Again. Tips to get ready for repayment. You wanna take a look at your servicer and be ready for those payments.

Look at personal.

On these, you may have reprioritized some of the other expenses in your life. Now that the student loan repayment is coming back into that, make sure that you calculate that into your budget and um, that this is not going to become too much of a hardship for you. See if one of those income

be patient.

Don’t have [00:53:00] as much staffing as they may need for everyone reentering repayments. So you may have experienced, um, some longer hold times on the, uh, from the servicers than you may expect in normal times. Um, but be patient, remain diligent. Make sure that your information is. Um, try to be patient with your servicer.

Keep documentation of any changes that you will have made, um, so you have those for your records. And so if you have any problems, you will have records of that. And also stay alert to avoid scams. Unfortunately, there may be emails coming to you, things coming in the mail to you that look like they may be, um, from.

Servicer, but might be saying that they have some ways for [00:54:00] your loans to be forgiven, some ways for you, lower yours. Some of those may be scam, so make sure that. Getting information from your servicer directly or from student aid.gov. And when you are communicating with your servicer, make sure you go directly to their site yourself and log in with a login that you have set up rather than using any type of link from an email, um, so that you make sure that you’re giving out any information properly to the right channel.

Okay. That.

Information Ian, please continue to connect with us on social media. We’ll be sending out more information, um, as more information becomes live on the same program and to what the actual dates are. Will that, [00:55:00] when that will be active, we’ll be sharing that as well on, um, social media and through emails as well.

So please connect with us. Please. If you have any questions, let us know. We will be sending out copies and a recording, copies of the slides and a recording of this webinar to you, um, early next week. I don’t see any questions in the chat in the q and a, Sean. Okay. If we don’t have.

I know this is very complicated information. If you have questions and you wanna talk about your situation personally, you can always call Mefa at eight hundred four nine six three three two and we can talk to you individually about, um, your loans and what the different options are as well. Thank you [00:56:00] so.