Student Loan Exit Counseling – Perkins and Institutional Loans

So my name is Sam Crow-Lucal I work in Student Financial Services and I'm going to talk about the Perkins loan and institutional loans

The reason that it's a different presentation is because although the Perkins loan is a federal loan program it has different rules from the direct subsidized, unsubsidized, and PLUS loans So And we've modeled our institutional loans to follow the Perkins loan rules So I'll talk about those and and give you information about the servicer who is UAS, so University Accounting Services So if you have a Perkins loan or an institutional loan you will be getting contacted by UAS saying, "Hey, you've graduated and you have this loan

" Now they shouldn't be strangers You should have when you first took out your loan gone and filled out your master promissory note on their website so there is a connection You did have to enter in information about yourself to log in the first time and if you've logged in multiple times then you've obviously had to update information So University Accounting Services What happens is we, or in this case the Registrar's Office, sends the information to the National Student Clearinghouse

This is where all the servicers, not just UAS, but also the federal servicers get their information about whether you're in school or not, okay So we report the the your enrollment information, in this case You've graduated We'll report that to the National Clearinghouse Your servicers will look at that and say, "Oh this student graduated

" So that's what kicks off the process of contacting you, letting you know about your grace period, when you're going to start payments, all that information Okay Now this this session is good for the for the federal loan exit counseling but for UAS, for the Perkins loan, and for any institutional loans you might have taken out, you do need to do an online exit counseling That's on their website If you don't do it online they send you a packet, a paper packet to the mailing address they have on file, okay

But that will have specific information to your situation, your perkins loan or institutional loan, it will have that specific information And you'll be able to set up payments during that exit interview Once you complete it it will take you and you can set up, you know, your automatic payments monthly from your bank account And then if you have any questions talk to you UAS, okay We work very closely with them so if you have a question after you've graduated and you say, "Hey, you know, this is my situation," if they can't answer it or they they don't- aren't sure exactly what we want them to do they'll actually contact us

So they'll contact myself or another person in our office and say, "Hey, this is the student's situation What would you like us to do?" Because there's more leeway, especially with our institutional loans, to be able to help you out So we work very closely with them so if you do have questions about a Perkins or institutional loan contact them as soon as possible so we can help you out Okay So again the exit interview is going to be the same as if you were to do one for the federal loans

It's going to have your rights and responsibilities as a borrower because you do have rights and you have responsibilities, both of those So it's not just "you have to pay the loan" and that's all that you have to do There are other things you do have to do There are things that you need to expect others to do, whether it's your servicer or the Department of Ed So the exit interview will outline those items

It'll give you the repayment information It will give you your options for the different repayments The Perkins loan will have the same repayment options that the other federal loans do, okay And institutional loans are a little more forgiving They'll be able to work with you to figure out repayment plans

Okay Leave of absence This, if you're graduating, this doesn't quite apply to you If you're leaving the school and coming back then it kind of does So, leave of absence- when you leave school and then come back at a later date to complete your program- what happens is that your grace period begins immediately because you have left school

You're no longer enrolled full-time or in this case more than half-time is the the language that it actually says So in that case you're not considered enrolled and your grace period starts immediately Now if you come back within the grace- the grace period time frame, which for Perkins loan is nine months, then your grace period gets restored So we say, "okay, you took a break but you came back you know six months later When you graduate, when you actually leave school, you still get the full grace period

" Okay if you come back after that grace period, let's say you have an issue and you're you're out of school for a year, okay Then when you come back you don't get the full nine month grace period, you get a six-month grace period It's just a little quirk But you still do get a grace period

It's not that you've used it up and you no longer have it for Perkins, okay Now if you plan to go to a different school after you leave Stanford, whether that's a graduate program or some other program at a different school or at Stanford you can submit an in-school deferment form Now this is not automatic, okay Even though the school, wherever you go, may report that you're enrolled, it won't automatically defer your loans So if you if you're going back to school make sure you fill out the the form and submit it to UAS

If you have other loans, your Direct Loans, make sure you also submit the form if it's necessary to those servicers so that you can get an in-school deferment for that Because it's not always automatic Sometimes it is, sometimes it isn't it Depends on the servicer, it depends on the school And so you don't want to be in a situation where you're back in school, you think your loans are deferred, and all of a sudden you get a bill saying, "Hey, you're a month overdue

Why haven't you paid it?" So again make sure you're on top of that deferment form If you need enrollment information you can look in Axess to see what it what your enrollment was here and again the schools look at that National Clearinghouse I believe if you go to NSLDS, the National Student Loan Data System, you can see your enrollment history as well So I talked about deferment Again, it's it's one form per loan

So if you have a Perkins loan and you have a an unsubsidized loan you need to do a form for each loan, okay It's not one blanket form that covers everything, okay And you have to do it annually So you can't say, "Oh I'm back in school and I'm doing a two year program so defer my loans for two years" No, they always look at it on an annual basis

So each year you need to say, "Oh, yes I am still in school I'm submitting the form I still qualify for this deferment" Okay

So Perkins is one of those loans that does have cancellation options Instead of forgiveness with Perkins loan they call it cancellation So there is teaching So there's the the Teacher Loan Cancellation for Perkins Very similar to the Teacher Loan Forgiveness for the Direct Loans

Now you can use time teaching to qualify for both programs So if you have a Direct loan and you have a Perkins loan and you start teaching, you can count that those years of teaching for the teacher loan forgiveness and for the teacher loan cancellation, okay You just can't use two different forgiveness programs on the same loan So you can't use public service loan forgiveness and teacher loan forgiveness to to qualify for- to forgive with just one, say, direct loan Okay, there are a couple public service loan forgiveness for Perkins

They follow the same guidelines as the direct loan Again, if you're going to do this you need to submit the forms because nobody is going to know if you don't tell them So submit the forms to UAS Call them, say, "Hey, you know, I'm working as a teacher now, or I'm working, you know, at a non-profit and I want to qualify for for Perkins loan cancellation What do I have to do?" Let's say you submit this form, you have it signed by these people, and you submit the supporting documentation

Okay They'll walk you through the process Does anybody have an Avery loan? Is anybody teaching? Okay we can skip the Avery loan That's a special Graduate School of Education program Now for the teacher loan cancellation for Perkins they do it by percentage, okay

So if you're teaching each year you submit the form that says "I taught for this year," okay You submit it and then they cancel a percentage of your loan So in year one, after you've finished your one teaching, they cancel 15% After year two, another 15%, Years three and four, 20% and 20% And then they cancel the final 30% after year five

Okay So you can get deferments for if you're teaching For your Perkins loan you can get a deferment so you don't have to make payments while you're teaching and then have it cancelled at the end of that year So this is a cycle So you submit an application for deferment, okay

You submit it to UAS They say, "Okay, your payments are deferred for twelve months" okay Then you send at the end of the school year, you say, you send them the form saying, "Hey, I completed my year of teaching," okay You're going to have to have your principal or vice-principal sign off on it and you send it to UAS

When they get that form, okay, they cancel that portion of the loan If you don't submit the deferment form you can still submit the cancellation form at the end of the year They'll just have expected you to make payments during that year, okay So you can make payments during the year and then cancel a percentage at the end of the year That's fine

Or you can defer during the year and cancel at the end of the year Okay so for Perkins, UAS- uaservicecom- the forms are going to be there, okay They have a list of all the forms that that you may need so if there's something that, you know, I haven't talked about or you don't remember when you're on there they do have a list of forms and you can always call them or email them and they'll let you know what you need to do Okay

Default- it's the same thing as the Direct Loans, what Brandon talked about, okay Default is not good And, you know, there are all sorts of bad things that happen- negative credit history, you know, you can get denied for a loan, higher interest rate on a loan So, what happens is this "accelerate the loan" means basically that instead of saying, "Okay you can make payments," when it gets accelerated it says, "You owe the entire thing right now, so no more monthly payments You just have to pay the whole thing back right now

" Okay Stanford does refer these loans to a collection agency if you go into default So you don't want to deal with the collection agency Everybody has horror stories Everybody who's dealt with them has horror stories about it

We do keep them on a tight leash to make sure that they do treat our students with respect So we do listen to phone calls that they have with with students when they're trying to collect to make sure that they're still treating people with respect but what they are out there to do is collect the money, okay So don't go into default It's as simple as that That's the easiest way to avoid all these bad things

Have communication with the servicer, with UAS, and if you have questions ask somebody, whether it's UAS, whether its Financial Aid Office, whether it's Student Financials, whether it's filing a HelpSU ticket Whatever it is, if you have a question, the best thing to do is ask Okay If you do get into default there there are ways to get out of it and to get it off your credit report One is rehabilitation, okay, which is set up through UAS in this case

And you have to make nine months of on-time payments If you make nine months of on-time payments they say, "Okay, you're rehabilitated, you know Your loan is back in good standing We'll take it off your credit report," Okay (Audience question) "So if pay it all off on time does it boost your credit score?" Yes, yes, yep

So that's positive credit history so it'll have a time since when you took out the loan and it'll have a history of on-time payments and then "paid in full" (Continued question) "So if you pay back early does that not boost your credit score as much as" The difference is negligible unless you pay it off all of once, you know, right at the beginning

The difference is just the the history and how the history gets weighed If this is your only credit on your credit report then yeah it will have an outsized impact because there's nothing else on your credit history But if you have other things, if you have a credit card, if you have other loans, then the difference between paying it off, say, two years in and paying it off, you know, eight years in, or ten years, is not going to be as big Yes (Audience question) "So what happens, for example, if you go into unemployment deferment or you default and then you go to another country maybe because you were only here to, like, get your degree or you're permanent resident but you want to go back to your country

What happens?" So in that case what happens is if it's with a collections company, with the collections agency, they'll keep trying to collect The Perkins loan goes back to the Department of Ed and they have a collection agency that they use What typically happens is that Stanford will put a hold on your account that says, "This student has an outstanding debt" and it that will prevent you from getting transcripts or replacement diplomas And so what we usually see coming through our office is students who need transcripts or are asking for a diploma who, oh, you know, who have defaulted Then that's when it's, okay, we can get them back on a payment plan

We can help them but that's typically what will happen for those students And if they- if a student leaves the country we're not, obviously, going to try and follow them into a different country but the collections agencies will still try and contact, will still try and collect It just- it's really within the US (Continued question) "Does it affect their credit score or their ability to get financial aid in other countries?" No Well it affects their credit score so if something – it'll be on the credit report for seven years

If somebody is in another country and they they want to use that credit report then it will show up But it won't prevent financial aid or things or other aid in other countries The default is sort of limited to the US because those are the- that's the country that uses those rules So if another country decides they want to abide by those rules and say, "Okay, you know, a default means- default in the US

means this for us," then they can do that But typically it's not- a default here is not applicable to a situation in another country Okay Mind Over Money So Sanford has an in-house financial literacy program and it's just getting off the ground now

But Mind Over Money is the web tool That's on- so if you go to sfsstanfordedu we have a link to Mind Over Money It has tools

It has information There are events both on and off campus for students, for alums And it's anything from, you know, how does credit work to, you know, retirement accounts to taxes, what-have-you So if you have- so the the website is down here in the corner – mindovermoney stanford

edu So if you do have questions about, you know, random kind of financial things and you go, "I have no idea who to talk to about this," check out Mind Over Money It is a tool and give us your feedback because we are trying to to improve it So we can use any feedback you want to give And then, a couple to-do's, as if you didn't have enough already

Make sure your contact info is updated both in Axess and in UAS and with your servicer for your direct loans because, "Oh, I didn't update my information and so I didn't get the letters, emails, phone calls" is not a legitimate excuse when it comes to why you haven't paid They kind of laugh you out of the room so make sure your contact info is updated Make sure you do your online exit interview with UAS Check the accuracy of your loan records, okay Just check, whether it's on NSLDS or studentloans

gov, check to make sure, "Hey, this is what I thought I have This is what I have" Okay, so that those two match up so that you're not surprised or, you know, something that you thought you got you didn't get or something that you didn't think you got you got So just make sure that that you know what it is that you have, okay Again, report future enrollment whether it's at Stanford or elsewhere via form

Don't expect it to happen automatically And then follow up until your loan is paid in full, okay There's nothing like getting a paid- in-full letter from a servicer saying, "Congratulations, your loan is paid in full" Okay It's nice plus you don't have that monthly expense anymore

So this is the contact information for UAS, okay If you have questions that UAS can't answer or you don't feel comfortable asking UAS file a help ticket, HelpSuStanfordedu Put in the Student Services Center in there and it'll get routed to us

So if you do have questions, whether it's, you know, later today, tomorrow, two years from now, go ahead and and ask Yes (Audience question) "So does everybody have to complete the exit survey through UAS or just only some people?" Only if you have a Perkins or institutional loan So you'll get a notification that you need to complete it online from UAS But if you want to do it now you can but you will be getting an email if you have a Perkins or an institutional loan

Anything else? Okay "Thanks again everyone for coming Sam and Brandon are here to answer questions individually Also Darren Knipfer from Student Financial Services is back there as well Thank you everybody for coming and congratulations on graduating!"

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