Archive for loan repayment

Financing your education at SIPA – Part 7

Our last post about financing your education focused on student loan repayments options to consider when you’re first thinking about taking out a loan or when you’re weighing your repayment options as you prepare to graduate from SIPA (or any other institution).

One new initiative that we’re excited about at SIPA is the Public Service Loan Forgiveness Program.  Under this program, student borrowers who pursue careers in the non-profit or public service sectors can have their outstanding loan balance forgiven after 120 months of repayment.  This forgiveness program applies to Federal Direct Loans (also known as Stafford Loans), Graduate PLUS loans, and Federal Direct Consolidation Loans.  It is not available for Federal Perkins Loans or any type of private loans.

If a student borrower qualifies for the Income Based Repayment program (available to borrowers with lower incomes during repayment), the Public Service Loan Forgiveness Program can save a borrower a considerable amount of money; depending on the amount borrowed, maybe tens of thousands of dollars.  As many SIPA students seek out such employment before, during and after graduation, this is an initiative that we want all SIPA students who borrow to be aware of.  For more information, visit any of these websites:

www.studentaid.ed.gov/publicservice

http://www.myfedloan.org/manage-account/loan-forgiveness-discharge-programs/public-service-loan-forgiveness.shtml

http://www.finaid.org/loans/publicservice.phtml

These 120 monthly payments need not be consecutive; for instance, if you start working in the non-profit sector immediately after graduating, work for a while in the private sector but then return to non-profit, you could still qualify.  However, you do have to make 120 monthly payments while working in the non-profit sector.  Your loan servicer will need verification of employment.  Note: while paying off your loan quickly (in 10 years or less) will save you money by minimizing interest, it will also prevent you from being able to take advantage of Public Service Loan Forgiveness, because if after the 120 monthly payments you have no remaining balance, there will be no outstanding loan amount to be forgiven.  It cannot be applied retroactively to loan amounts already paid off.

Non-profit or public sector employment may include any of the following:

–       A Federal, State, local, or Tribal government organization, agency, or entity;

–       A public child or family service agency;

–       Volunteering full-time in the Peace Corps or AmeriCorps;

–       A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code;

–       A Tribal college or university; or

–       A private non-profit organization (that is not a labor union or a partisan political organization) that provides at least one of the following public services:

Emergency management

Military service

Public safety or law enforcement

Public interest law services

Early childhood education (including licensed or regulated child care, Head Start, and state-funded pre-kindergarten)

Public service for individuals with disabilities and the elderly

Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)

Public education or other school-based services

Public or school library services

This employment must be full-time (an average of at least 30 hours a week) and while in most cases the exact nature of the work does not matter, it cannot include religious instruction or worship, or any kind of proselytizing.  Work for a labor union or partisan political organization also does not count as public service for purposes of this program.

There are circumstances in which your student loans can’t be forgiven but at least you would be able to halt payments temporarily.  This is called either deferment or forbearance, and is applicable for enrolling at least half-time in a degree program, serving in the military (including the National Guard or Reserves), unemployed or experiencing economic hardship, or serving in the Peace Corps.  In some cases, interest may continue to accrue on your loans, which you would ultimately be responsible for, but deferment or forbearance may help a borrower out during times that making loan payments would create a hardship.  For more information, visit these sites:

http://studentaid.ed.gov/repay-loans

http://studentaid.ed.gov/repay-loans/deferment-forbearance

If you choose to borrow student loans to attend SIPA, online entrance counseling will be provided so you can get more details about your rights and responsibilities as a borrower.  But if you have questions at any time or would like to learn more about borrowing, feel free to contact us at sipa_finaid@columbia.edu.

 

Financing your education at SIPA – Part 6

In our previous blog entry about student loan repayment, we discussed the initial decision to borrow, the types of loans available to SIPA students, and the resources to keep track of when your loan payments come due and to whom you will make payments.  Now let’s look at how to determine monthly payments and some of the flexible repayment options that can make managing student loan debt easier.

There are a number of repayment options once you get to that stage (for many loans, you don’t enter into full repayment until after you have graduated or ceased your enrollment).  Different repayment options include Standard Repayment, Extended Repayment, Graduated Repayment, Income Based Repayment and Income Contingent Repayment; the different options can provide you with flexibility, lower your monthly payments, or calculate monthly payments as a portion of your income.  But study these plans carefully…lower monthly payments can also mean a higher cost over the life of the loan, and not every borrower qualifies for every plan.  Other students choose to consolidate multiple loans into one payment and prefer that convenience.  Click here and check out the links under the “Borrower Info” menu for more information on the Federal Direct Consolidation Loan program.

Remember that these repayment plans and the consolidation option only apply to federal student loans.  If you borrow any private loans, they cannot be consolidated, and repayment options tend to be more limited, typically with less consumer protection (which is why the SIPA Financial Aid Office generally recommends that students investigate federal student loans first).

Any time you borrow, you’ll want to know what your monthly payments will be.  There are a number of online loan repayment calculators, and we recommend that you visit one to learn more about how much your monthly payment would be based on how much you borrow.  One calculator is available at https://studentloans.gov (click on the Repayment Plans and Calculators link); it offers a comparison in monthly and aggregate payment amounts, including how much interest a borrower will pay, under different repayment plans offered by the US Department of Education.  Another good set of loan repayment calculators can be found at www.finaid.org  (click on Calculators and then scroll down to Loans).  There you will see a number of links for specific repayment plans available to many borrowers.

In a future post, we plan to discuss options for temporarily stopping payments after you have begun making them, and a new exciting initiative that could save many SIPA graduates a lot of money based on their career choices – the Public Service Loan Forgiveness Program.

 

 

Financing your education at SIPA – Part 5

Student Loan Repayment

While SIPA does make funding available through various scholarships and assistantships, approximately 40 percent of our students also use student loans as part of their financing strategy.  If you borrowed student loans as an undergraduate, you may already be familiar with the obligation of repaying your loans.  Just like a mortgage, a car loan or any other type of debt, repaying your student loans can be stressful.  But be aware that there are a number of options available that can help you manage student loans, and even save you money.

Before you make any decisions about borrowing while attending SIPA, we’d like to familiarize you with some of the resources and information that can help you be an informed borrower.

First, plan carefully and borrow only what you need.  There are loan programs from government and private sources that can cover all of your costs…tuition, fees, books and supplies, room and board, travel expenses…but over a two year period that can add up to lots of debt.  Make sure that you apply for not only all of the funding that SIPA offers, but external sources as well, and also review financial resources you have on hand.  Using some savings now might save you interest-bearing debt later.

The types of loans most SIPA students qualify for include the Federal Direct Unsubsidized Loan (Congress eliminated the interest subsidy on Direct Loans for graduate students when they passed the Budget Control Act of 2011), the Federal Graduate PLUS loan, the Federal Perkins Loan and various loans from private lenders.  A good source of information for the federal loans is http://studentaid.ed.gov/types/loans, while a sampling of some private loans can be found here.

Be aware of when your repayment begins…it’s not the same for all loans.  Click here for information on when loans from the federal government (those are the majority of loans borrowed by SIPA students) go into repayment.  And once you have borrowed federal loans (or if you already have), log in to the National Student Loan Data System (NSLDS) at www.nslds.ed.gov to find out who will be servicing your loan (which is where your payments will be sent).  To log in to NSLDS, you will need your Social Security number and your FAFSA PIN.

In our next student loan repayment entry, we’ll discuss how to find out what your monthly payment will be, along with the different repayment plan options.

 

"The most global public policy school, where an international community of students and faculty address world challenges."

—Merit E. Janow, Dean, SIPA, Professor of Practice, International and Economic Law and International Affairs

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