This timeline is designed to keep you on target for completing your student loan consolidation in a timely fashion. To see a full size view, click on the diagram below. If you have any questions, please feel free to contact me at mbfenton@salud.unm.edu or 505-272-2954. Thank you.
Mary B. W. Fenton
This is a timeline designed to keep you on target for completing your student loan consolidation in a timely fashion. To see a full size view click on the diagram below. If you have any questions, please contact me at mbfenton@salud.unm.edu or 505-272-2954.
If you have or will be consolidating your student loans with the Federal Direct Student Loan Consolidation Program, be sure to check your credit report AFTER you receive notice that your loans have all, successfully, been consolidated. What you should see is all of your former loans listed but indicating “pays as agreed” and then you will see the new consolidated loan. You want to make sure the original loans are listed but indicate a $0 balance so it does not appear that you have double your actual student loan debt.
If you are applying for Public Service Loan Forgiveness and have completed (or will be completing) the PSLF certification form and have sent it in to the servicer for PSLF (FedLoan Servicing) wait until you receive notification from them that they are now the servicer for your Direct Consolidated Loans. At that point you should check your credit report, again, just to make sure that it accurately reflects a new servicer.
I had been under the impression that the Direct Consolidation Loan would be $0’ed out and appear as a new loan with FedLoan Servicing but that is NOT the case. This is not a new loan, only a new servicer. The practice of changing servicers is somewhat of a common practice with home mortgages and how things are now working with educational mortgages.
Regarding credit, you are probably aware that everyone is entitled to one free credit report, per credit reporting agency, every year. I recommend that you go to www.annualcreditreport.com and run one of your reports, i.e., Trans Union, and then 4 months later go back and run the next Experian or Equifax, and 4 months later run the next one. They are usually fairly similar and by running them quarterly, you are more apt to catch any (potential) identity theft. However, if you identify something terribly wrong on the 1st one, I’d go ahead and run the rest to see if they all reflect what is on the initial report. Don’t forget, you do have to pay a small fee in order to receive your credit score. Also, remember, you should run credit reports for all of your dependents. Every year, nearly 500,000 children under the age of 18 have their identities stolen. Make it a family event ………..
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
HSSB-305
505-272-2954
mbfenton@salud.unm.edu
Financial Planning:
Most financial planners encourage you to have, at least, 6 month worth of your living expenses set aside. If you’re just graduating, this can seem a long way off especially as you’re trying to figure out how to repay your students loans, moving to a new location, etc. However, it is never too late to start so, just start saving!! Start by aiming for, at least one month of expenses saved, then two, and so on. The goal of an “emergency” fund is have savings so you can avoid credit card debt. Even $25 a month is a place to start to help build this emergency fund. You can utilize this website to help you plan for building your emergency fund. http://www.bankrate.com/calculators/savings/emergency-savings-calculator-tool.aspx
Scholarship Scams:
Be wary of any messages you might receive from “scholarship application services” claiming to locate scholarships for you. These services are NOT FREE and they tend to not identify any more sources than are already available on your school’s website. A recent one is “degreedup” and they are not free, either – it requires that you submit “$5 (cash only to help defray mail handling, document shredding and product costs).”
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
HSSB-305
mbfenton@salud.unm.edu
505-272-2954
Finally, the long-awaited Public Service Loan Forgiveness (PSLF) Certification Form is available to individuals interested in loan forgiveness if they work in a one of the qualifying category of entities/organizations.
These entities/organizations are:
- any nonprofit, tax-exempt 501(c)(3) organization
- the federal government, a state government, local government, or tribal government (this includes the military and public schools and colleges)
- full-time service in AmeriCorps or Peace Corps
Remember, you must be working in one of these entities/organizations while you are making payments for the payments to count toward loan forgiveness AND you must be working in one of the qualifying entities/organizations when you apply for loan forgiveness. You can work in a for-profit entity and then return to not-for-profit but the payments made during the time of “for profit” employment will NOT count towards the PSLF.
The links, below, give detailed information on how to complete the certification form, etc. but I want to point out a couple of items:
While the Department of Education (ED) does “encourage” you to complete the form, annually, I would say absolutely complete the form annually. Be sure to keep a copy of it before submitting the first two pages to the PSLF Federal Servicer:
FedLoan Servicing
P.O. Box 69184
Harribsurg, PA 17106-9184
Phone: 855-265-4038
FAX: 717-720-1628
Also be sure to maintain yearly W-2’, pay stubs, and any other documentation that you feel documents the “eligible agency” as a public service entity/organization. Be sure you have the appropriate certifying official sign the employment certification form. For medical residents, the certifying official is Joe Sparkman in the Graduate Medical Education office. For all other faculty/employees, I am working to identify who the appropriate certifying official is and will notify you.
Once you send in the Employment Certification for Public Service Loan Forgiveness form to FedLoan Servicing, they will notify the current holder/servicer of your loans that they are taking them in-house. You should, then, receive notice from FedLoan Servicing that they have your loans and are aware that you are, indeed, applying for PSLF.
These are uncharted waters and as information becomes available, we will keep you posted. Remember, to even be eligible for Public Service Loan Forgiveness, you MUST be making payments under the Federal Direct Loan Program and for most individuals this means that they will have had to consolidate all of their loans into the Federal Direct Loan Consolidation Program. If you have always and only had Federal Direct Loans and they are already housed with the Federal Loan Servicer (ACS), you will not have to go through the consolidation process.
If you have any questions, please feel free to contact me.
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
HSSB-305
mbfenton@salud.unm.edu
505-272-2954
Much attention is currently focused on the impending increase (or doubling) of the student loan interest rate on Federal Direct Student Loans. The increase is scheduled to take effect on July 1, 2012 and will only pertain to undergraduate Federal Direct Student Loans which currently carry an interest rate of 3.4%. This means that, effective, July 1st, they will carry an interest rate of 6.8%. There is the possibility that Congress will vote to extend the current 3.4% rate but there is no way to predict how this will play out.
On another note, effective July 1, 2012, the interest rate subsidy for graduate students will disappear. This means that interest will accrue on all of the Federal Direct Student Loans from the date they are originated until they are paid in full. This is just one more reason to not borrow more than YOU need to cover your educational costs. Remember, these loans are no bargain …………….. the Federal Direct Unsubsidized loans accrue interest at 6.8% and the Federal Direct Grad-Plus loans accrue interest at 7.9%. This change in legislation could effectively cost you almost $6,000+/- more over the life of your student loans.
This is also not a reason to utilize private loans. While they may appear attractive due to (currently) lower interest rates, they provide no protection in the case of permanent/total disability or death, etc., and they are NOT eligible for loan consolidation and/or the possibility of Public Service Loan Forgiveness.
We will keep you posted on more issues surrounding student loans in the very near future.
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
mbfenton@salud.unm.edu
505-272-2954
THE SPECIAL DIRECT CONSOLIDATION LOAN PROGRAM:
The “Special Direct Consolidation” on-line application was supposed to be available to eligible borrowers beginning January 17, 2012. It is only available until June 30, 2012. One of four federal servicers (FedLoan Servicing/PHEAA, Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae) is supposed to be contacting each eligible borrower and provide the borrower with on-line application instructions. This communication will either be through the U.S. Postal Service and/or e-mail. PLEASE NOTE: At the present time, this program is in the process of Negotiated Rulemaking so we’re presenting information as we know it but it could change.
To be eligible, a borrower must meet BOTH of the following criteria:
1) The borrower must have at least one Direct Loan or ED-held (also referred to as Department held) Federal Family Education Loan (FFEL) Program loan that is current or less than 270 days delinquent
AND
2) The borrower must have at least one commercially-held FFEL loan, i.e., from a bank or credit union, Sallie Mae, etc.
If the only loans you have were originated after July 1, 2010 you will NOT be eligible for this program since they will all be Federal Direct Loans. You can check the NSLDS website http://www.nslds.ed.gov/nslds_SA/ to determine whether or not you have a FFEL and/or ED held loan.
PLEASE NOTE: If you utilize this program and have either Perkins loans or any of the Title VII Health Professions Loans, i.e., LDS, HPSL, NSL, etc., you will NOT be able to consolidate these loans into this “special” program. This means that you will still have to manage repayment of those loans, separately, as opposed to being able to consolidate them all together.
If you are eligible to utilize this program and choose to utilize it you will be eligible for a .25% interest reduction on your weighted average interest rate as well as an additional .25% interest reduction if you choose to utilize automatic debit.
We have been told that, unlike the existing Direct Consolidation program, your educational debt will already be pre-populated in the appropriate fields of the on-line application which is why you must wait to be contacted by one of the 4 servicers. DO NOT COMPLETE THE EXISTING ON-LINE CONSOLIDATION APPLICATION. We will keep you posted as more specifics of this program are announced. However, we can tell you that it is not moving as quickly nor as flawlessly as we expected given the very limited timing.
PROTECTING YOUR AND YOUR DEPENDENT’S CREDIT:
Did you know that every year approximately 500,000 children under the age of 18 have their identities stolen? Much of this has occurred due to the availability of information on social media outlets such as Facebook, etc. Be sure to limit what you put out on social media sites and limit who can view them. However, as we have all learned, it doesn’t matter how secure you think you’ve made your Facebook, etc., site, they can still be hacked. Also, if you have dependents, be sure to run their credit report, yearly, to monitor and make certain that their identity hasn’t been tampered with. They are also entitled to a free credit report from each of the credit reporting agencies, on a yearly basis.
DON’T FORGET YOU CAN OPT OUT OF RECEIVING UNWANTED CREDIT CARD OFFERS:
You can do so by either calling 888-567-8688 or going online to www.optoutprescreen.com.
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
mbfenton@salud.unm.edu
505-272-2954
After our first blog a student suggested that we include an RSS feed button on the blog. At present, we have managed to have that included but it is located at the bottom of the page as opposed to the top. The same student also asked that we include links to the presentation that we made to first year medical students in September, 2011. Both of those sessions will be included in the next blog. They need to be listed on the SOM financial aid website, first, so we can just provide the link.
Loan Repayment/Forgiveness Programs:
As education debts mount, these programs become more important. To recap some of them, the National Health Service Corp offers a loan repayment program to primary care medical, dental and mental health clinicians. Those individuals can receive up to $170,000 for 5 years of full-time service, $60,000 for a minimum of 2 years of service in a designated underserved area. Part-time clinicians can receive $60,000 for 4 years or $30,000 for 2 years.
Another loan repayment program is the Nursing Education Loan Repayment Program for registered nurses working at non-profit health centers, hospitals, nursing homes and other facilities facing a critical shortage of nurses. Individuals can receive 60% of their total qualifying nursing education loan balance for 2 years of service.
There is another pilot program that we just learned about (Students to Service Program) but, unfortunately, the due date is tomorrow. We’ll keep you posted as to its success and let you know, well in advance of the due date next year, if the program continues.
To learn more about these programs and whether or not you qualify, go to www.hrsa.gov/loanscholarships/index.html .
Special Direct Consolidation Loans:
By now, I am sure many of you have heard about the “new” SDCL program. It is almost identical to the Direct Consolidation Loan program that has been in existence since 2007 except that it does not allow you to consolidate FFEL loans that are in default, Perkins loans or any of the Title VII loans, i.e., Nursing Student Loans, Loans for Disadvantaged Students, etc. Also, the program has yet to go through the federal Negotiated Rulemaking process which doesn’t even start until January, 2012. We have been told that if you are eligible you will be contacted by one of the Department of Education servicers which for this loan are, FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae. Sit tight and we’ll bring you more information on this program as it is unveiled.
How Much Do You Know About Credit Scores?:
Did you know they impact whether or not you can even receive a loan and the interest rate you receive including some student loans? Did you know it can affect employment opportunities? Did you know it can affect licensure?
A credit score is a behavioral score measuring how you “behave” with money and it is calculated, by FICO, based on information contained on your credit report. You are entitled to one free credit report per credit reporting agency, i.e., TransUnion, Experian, Equifax, every year. If you haven’t already, I recommend you go to www.annualcreditreport.com and run one of the reports and then 4 months later run the next agency report and then 4 months later run the next agency report. Keep this up every 4 months. That way, you essentially receive 3 credit reports per year and can watch for any signs of identity theft. If you want to receive your credit score you will need to pay a nominal fee.
Did You Know You Can Opt Out of Receiving Unwanted Credit Card Offers?
You can by either calling 888-567-8688 or going online to www.optoutprescreen.com.
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
mbfenton@salud.unm.edu
505-272-2954
Finally …………. our first HSC blog post. This is a very exciting time and event, for us, as we leap into the 21st century in the hopes of reaching all interested Health Science Center students and medical residents regarding financial aid, debt management, loan consolidation, and financial planning/literacy issues. Financial planning is not only for “the rich and famous.” If we don’t do it, we’ll be famous for the wrong reasons and we will never realize our true (financial) wealth. In the words of Weight Watchers, “if you fail to plan, you’ve planned to fail.” Hence, the goal for this blog is to foster an (increased) interest in personal financial well-being at UNM-Health Sciences Center. We hope you utilize this as a resource for educational debt management practices as well as financial literacy and counseling.
Financial planning escapes none of us and as Thomas Huxley reminds us, “Economy does not lie in SPARING money, but in SPENDING it wisely.” An AP-AOL study reveals that debt-related stress is 14% higher in 2008 than in 2004. source: (web-md – accessed 7/27/2011). (Financial) stress related symptoms include sleeplessness, inability to focus on school, eviction, marital/partner problems, relationship problems (in general), repossession and depression. This is not what we want for you and we’re sure it’s not what you want for yourself. We want you to be able to focus on your studies instead of any potential financial problems and help you to be a (more) well-rounded student and citizen.
You will not be inundated with information. At present, the blog will only be sent every two weeks unless there is breaking, pertinent information that you need to know. On occasion, articles regarding educational debt as well as useful links will be posted and always, there will be appropriate personal financial planning tips.
We welcome your (constructive) feedback and hope this is a value added component of your UNM-HSC educational experience. Please feel free to contact me, directly, at 272-2954 or I can be reached at mbfenton@salud.unm.edu. While I will be the editor of the blog, this is a joint effort of the School of Medicine, the College of Pharmacy, and the College of Nursing Financial Aid Officers.
We hope you enjoy it, learn some interesting information and practices and we hope it makes your UNM-HSC experience all that much better. Thank you for the opportunity to work with all of you.
Best wishes in your educational pursuit. If you are interested in receiving this blog, please subscribe and it will be automatically sent to you each time a new posting is published.
NOTE: Anyone approaching graduation and who has student loans will, soon, begin repayment of those loans. We want you to be aware of all the options available, to you. There is a particularly appealing program called Income-based Repayment for individuals interested in Public Service Loan Forgiveness. This requires working in a non-profit or 501(c)(3) organization while making income-based repayments which is especially appealing to individuals first starting out and who have lower incomes. The next blog will be devoted to loan repayment options, with special focus on IBR-PSLF. In the interim, if you have questions please feel free to contact me to discuss your options mbfenton@salud.unm.edu or 272-2954.
Attention medical residents and others preparing to enter student loan repayment: The Employment Certification for Public Service Loan Forgiveness (to express your intent to apply for PSLF) form that was scheduled for publication in October 2011 has now been pushed back to, at least, January 2012. I will keep you posted when it becomes available.
Mary B. W. Fenton, M.A.
Director of Student Financial Aid Services
for the Health Sciences Center
University of New Mexico Health Sciences Center
mbfenton@salud.unm.edu
505-272-2954