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

Shawn Morrissey: Good afternoon, and welcome to today's presentation, Federal Loan Repayment Options, Choosing the Right Path After the Pause. My name is Sean Marcy. I am Director of College Relations at MEPA, and I have my colleague, Stephanie Wells, who is also Director of College Relations at MEPA. She will 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& 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 it and we will answer that live for you as well.

So before we get into the topic, I wanted to let you know a little bit about FIFA. So we are a state authority. We were created in 1982, um, by petition from a group of colleges in Massachusetts, petitioned the state legislature in Massachusetts to create an authority to help provide competitive loans for families to attend colleges.

Since then, we've expanded to have savings plans, and we do education for families, 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 take advantage of what MIFA has to offer. So what we're going to go over today are federal loan repayment options, income driven repayment plans, and public service loan forgiveness to hopefully help you 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 loans starting September 1st. The first payments will be due starting October 1st on your loan, federal loans, and if you haven't chosen any type of federal loan repayment plan, you will go into what is called standard repayment.

I'll talk about what standard repayment is in just one moment. 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, and it divides that into 10 years of equal payments.

So those are monthly payments, 120 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 off. In shorter than 10 years, but if you choose standard repayment, that will be 10 years and those are available for direct federal loans in for the federal family education loan program as well, which will refer to as fell from here forward.

And, like I said, again, if you haven't chosen a particular repayment program, you will automatically be put into the standard repayment plan. Um, from the start and. 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 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 pays off your loan in 10 years, there will be nothing left to forgive at the end of the 10 years of forgiveness through PSLF.

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.

Extended repayment instead of dividing those payments in over 10 years. Extended repayment divides those payments over 25 years. Still have those that balance divided into 300. Equal payments instead of 120 equal payments. And this, again, is available for direct or fell 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 that. You also have to have a minimum total balance of 30, 000 to enroll in the extended repayment program. And while your payments will be lower on this. because you're making 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 have more interests according on that loan over 25 years.

So in the long run, this is the more expensive option to pay back your loans, but your monthly payments will be lower on this payment plan. There is also the graduate, graduated repayment plan. Which is more expensive than the standard repayment plan because again because of interest accrual and how this one works is your payments start a lower at the beginning of the payment a period and they step and 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 occurring on that loan at the beginning and it ends up being a more expensive option, um, in the long run. But your payments will start out lower under this payment plan.

This one, again, is not eligible for public service loan forgiveness. So if you are looking at, um, pursuing public service loan forgiveness, which we'll, again, we'll talk about later in the session, um, this payment plan is not available towards that. I'm going to talk a little bit about federal loan consolidation before we go forward and what federal loan consolidation is, is combining several federal loans into 1 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 not have these.

Income based repayment plans 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, 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. You cannot consolidate a loan while it's still in, um, in school status or in another status other than repayment or grace. And then once you do consolidate the loans, there are the other repayment plan options that we'll be talking about in a few minutes.

And then those repayment terms can be from 10 to 30 years based on the amount of that. 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 loan. You also cannot consolidate any private loans that you may have.

You can only consolidate federal loans on that. In order to, um, start the consolidation process, You can do that right on studentaid. gov, um, and then you would choose the loans that you want to 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. It can sometimes take, um, about a month to go through the whole process. So you want to 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 of your loans before the payment pause ends, you want to start looking at that very soon.

Factors 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 fell loan, you'll receive one bill per month for that instead of receiving a separate bill for each of those with separate payments.

So that could potentially lower your monthly payments rather than having to make a payment to To different loan programs, you can take that to 1 different loan program, or sometimes if you have 3 or more different types of loans that can lower those monthly payments into just 1 payment rather than several.

Again, you have access to all of these different. Income based repayment plans that we'll be talking about in a minute and you can, um, switch any variable rate loans that you may have had under one of the FFEL programs or an earlier direct loan program to a fixed interest rate under this program. You do lose all the borrower benefits from the original loans.

So, for example, if you did have loans under the Perkins program, Perkins Loan Program, you want to make sure you take a close look at what some of those borrower benefits are before you consolidate. If you are pursuing some types of loan forgiveness that are available only to the Perkins Loan Program, for example, if you are working as a nurse or as a teacher and have some forgiveness through the Perkins loan program, those benefits would not be available to you anymore once you do switch to the new consolidated loan program.

So take a good look at what those borrow benefits are on your original loans before you pursue, um, consolidating most loans. Also consider that if you do go into one of. 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 costs again, because of interest accrual on those phones 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 looking at that annually. So, you'll have a new repayment rate based 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 percent and 20 percent 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 just a moment. And the different, um, Repayment plans that are available are the Income Based Repayment Plan. There's a very new plan that's called SAVE, which is Savings on Variable Education, Valuable Education, which just became available in the last month.

And this is replacing the Repay, Revised Pay As You Earn plan. I'll be talking about, um, what the old benefits are under repayment, but those will be Changing very shortly to the new benefits under safe, which are better benefits towards borrowers. We'll also be talking about the pay as you earn pay plan and the income contingent repayment plan.

Both of those are sunsetting on July 1st of 2024. What that means is No one will be able to enroll in those payment plans any longer after July 1st, 2024. So if you do want to take care of, take advantage of any of the benefits under the Pay As You Earn plan or the income contingent plan, you do want to enroll into that prior to July 1st of next year.

And I'll be talking about all of those benefits in just one moment. So let's talk a little bit about What the discretionary income is and, um, under different plans, the discretionary income is determined a little bit differently. So currently under IBR Pays Learn and Repay, what they do is they take a look at your annual income based on your tax returns, and then they subtract 150 percent of the Federal Poverty Guideline, um, and that becomes your discretionary income.

Under the ICR plan, it's your annual income subtracting 100 percent of the Federal Poverty Guideline equals your discretionary income. So under the ICR plan, your discretionary income will be a little bit higher than under IBR, Pays You Earn and Repay, because it's only subtracting 100 percent rather than 150 percent of the Federal Poverty Guideline.

Under the new plan that was just announced about a month ago, I'm saying, which is going to be the new repay. So if you are currently in the repay program, you'll automatically transfer to the state program and once, um, you'll They start these benefits, which should be within the next couple of months, then they look at your annual income and subtract 225 percent of the federal poverty guideline.

So your discretionary income under the safe plan will be lower than under any of the other plans, which will have that base income that we look at what the payment is based on will be lower. So that that is a great benefit.

So, let's talk a little bit about public financial cards, partial financial hardship, which is required to get into the plan or the plan. You do have to show what's considered a partial financial hardship. In order to enroll in one of these plans, you don't have to continue to 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. So under IBR. The amount that is due on the eligible loan under your standard repayment plan has to be greater than, what, 15 percent of the difference between your adjusted gross income and, what, 150 percent of the poverty line for your family size in the state where you live.

So if that standard repayment is higher than, what, 15 percent of the difference between your AGI and 150 percent of the poverty 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 what your payment would have been monthly out of that 10 year standard repayment plan.

And if that is greater than 10 percent of the difference between your AGI, And 150 percent of the poverty line for your family size in this 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.

So let's talk first about the different repayment plans. We're going to talk first about the newest one, which is saving on valuable education or saving. Again, this is replacing repay. Um, so if you do enroll in repay, or if you are currently enrolled in repay. You will automatically be enrolled in SAVE once these new, um, these new benefits become available.

And they have announced that these will become available very shortly for borrowers. There currently isn't a An application available to enroll and save so in order if you do wish to enroll in the same plan, you would just enroll in the repaid plan and then you would roll over automatically into the same plan once these benefits do become available.

And again, the payments are calculated, um, for the current period up until July 1st, 2024 on 10 percent of your discretionary income. So it is a lower payment on that loan. But after July 1st of 2024, they're going to treat undergraduate loans that you have borrowed differently from any loans that you may have borrowed for studies above your undergraduate studies.

So after July 1st, it's only 5 percent of your discretionary income is what your payment will be for those undergraduate loans. And 10 percent 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 percent of your income, the payment rather than 5 percent of your income.

So it's a great benefit. I'm starting in July. 1st, 2024 for those undergraduate loans. They'll be the lowest available payment for you for that monthly payment. And these are available for students who have borrowed through the direct loan program or through the FFEL program. This is not available to plus low borrowers and the maximum timeframe under this.

So instead of 10 years, like standard repayment, you have 20 years where you paid that for undergraduate debt. And there's a great benefit that is going to, um, become available in 2000 and July 1st of 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. And for each additional thousand that you borrow, um, they will add one year on that until the 20 years are met. So, for example, if you are borrowing, if you have borrowed 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 would be repaid. 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. These payments do qualify for public service loan forgiveness, which again, I'll talk about what that is in just a minute.

There's no cap on the payment amount. 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 yearly to your servicer in order to remain in the payment plan. If you, um, don't disclose that income to them every year, then you would change from 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 programs, so if the payment becomes too high based on your income, you can switch back to the standard repayment program. But, um, again, if you are making payments towards forgiveness. That once you go into standard repayment, those payments would change.

And again, your income is verified annually, um, based on a new repayment plan. 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 of 2024, where you can automatically sign up to have the IRS share the information with your servicer.

So those payments are automatically determined 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 automatically calculated every year.

And just be aware that your payment could go up. Every year for that. So if you do have automatic payments being withdrawn for your loan, make sure that you are ready for a potentially larger. Amount to be taken out of your account automatically. To pay for the, that new payment amount. One of the great benefits under the new save plan is if your payment amount that's calculated on that plan isn't enough to cover the interest accruing on your loan every month.

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 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 loans available for this program, you do have to consolidate those in order to make those eligible and have that. Consolidating 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 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 the forgiveness. Again, you don't have to show a partial financial hardship in order to qualify for this.

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

The interest is a little bit different on how they handle it on this one where capitalized interest cannot exceed 10 percent of the amount of the loan at the time the loan entered the plan after this interest. After 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 in your principal balance. Is based on that new amount of the interest that has approved plus the original principle on the loan.

So there's often 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 7 1 of 2014, which we'll talk about now. And there's also another program for loans. After seven 14. So the first one for the older loans before July 1st of thousand 14, is available for both direct and loans.

Again, 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 is eligible for public service loan forgiveness. In your payment is 15 percent 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 have been. So your payments will never go above what your standard repayment would have been. So that's one of the good 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 to the principal.

So for loans after 7 1, 2014, um, this one is available to only direct loan borrowers. So if you have fell 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.

You again have to show partial financial hardship in order to Enroll in this plan, but again, you do not have to maintain it. It is eligible for public service loan forgiveness. Payment under this plan is based on 10 percent of your discretionary income. And again, that's based on the whole family income if you are married and filing jointly.

And again, it's capped at what 10 years standard repayment would have been. And 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 of 2007. So you must have had any loans taken out before that and have had a loan disbursement on or after October 1st of 2011 in order to qualify for this plan. This is one of the plans that's sun setting on July 1st, 2024. So if you do want to enroll in this plan, you have to do so before that date.

This 1 is available only for direct loan borrowers. So if you do have felt loans. You do have to consolidate those into the direct loan program in order. To enroll in this plan, you have to make the payments on this. Loan for 20 years after which any remaining balance is forgiven. And again, that's taxable.

You do have to show. Partial financial hardship, 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 percent 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 have been.

You do have to verify your income annually on this one again. Capitalized interest on this one can exceed 10 percent of the amount of loan at the time the loan entered the plan. Again, after that period, interest does accrue, but does not capitalize on that

revised pay as you earn. And again, this one will automatically transition to save, which has better benefits for borrowers. So that that's a good thing that it will be automatically transitioning to that. But I wanted to talk about what the current benefits are under repay 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 felt loans, you do have to consolidate in order to make those eligible for direct loan. You make repayment. Make payments on this for 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 REIT.

It is eligible for public service loan forgiveness and the payment is based on 10 percent of your discretionary income. And 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 have 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 and currently under repay when your monthly payment does not cover the interest that's occurring on your loan.

You are only responsible for 50 percent of the accrued and unpaid interest. The rest of the interest is forgiven. So the other 50 percent of that is forgiven for you. There is no cap, however, on capitalized interest. However, once repay does transition to save, you will have those more, um, lenient interest, um, rules applied to your loan, where any interest cruise above the amount of your monthly payment will be entirely forgiven.

So once that transitions to save, you will have. Access to that new. So let's take a look at, um, the different repayment plans and how that would work for someone who borrowed for $40,000 in the direct loan program. $20,000 unsubsidized and $20,000 subsidized at an interest rate of 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 percent per year. So, under standard repayment, her payments would be 434 for the entire life of the loan, um, for a total amount paid of 52, 093, a total interest amount of 12, 093.

And she pays that over 120 months for graduated repayment against paying that over 120 months, but her initial payments will be 247 because under the graduate repayment plan, remember your payments start out lower, but then step up each year under that program. So the final payments would be 741. Under that repayment program.

Again, you're paying for 120 months, you're paying lower at the beginning. Higher at the end, you're paying a total of 55, 000, so it's a little bit higher than you pay under standard repayment because 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 of 246 each month under that.

You under that, that payment plan is

so. More than the 10 year standard repayment, but you are making lower payments over the time because you're paying that over a longer period of time and you're paying 33, 690 in interest on that payment plan, rather than the 12, 000 of interest in the 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 length 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 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 of the 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't do that. And then if you look 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 pain and the total interest paid do vary a bit based on those interests that is occurring on those. And, um, the total time in repayment does vary on those.

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

gov

with your FSA ID and you 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 loans Um while you are employed at an eligible employer So we'll talk what all of those, uh, different aspects of public service loan forgiveness are.

Now, but that will be the formula. So you have to have an eligible loan, make 120 eligible 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 eligible loans? So the federal direct student loan program or a federal direct consolidated loan.

So if you have a Perkins loan or the fair federal family education loan, the fellow 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 of 2007.

They have to be an on time payment. What that means is it has to have been received within 15 days 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 be made 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 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're 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 U. S. federal government, state government, local government, or a tribal organization.

And this includes the U. S. military. Or if you work at a nonprofit organization that's considered tax exempt as a 501c3 under the Internal Revenue Service Code, um, and if you do work at a nonprofit, but you're not sure if it's a 501c3, you can check with the Personnel or HR department at your organization and ask them if they're considered a 501c3 and they'll be able to let you know if they are.

And if you qualify for public service, I'll forgive this or if you're serving as a full time AmeriCorps or Peace Corps volunteer, um, that you would qualify as well under the eligible employer. There is an employer search tool that we've, I've linked here that is on studentaid. gov under PSLF employer search, and we will be sharing these slides with you, so you will have that link enabled for you in the slides that you can go directly to that.

And there's a search tool there that you can look up what, um, your employer and see if that employer qualifies for PSLF. And 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 W 2 from your employer every year when it's tax time, not a 1099.

If you're receiving a 1099, usually that would mean you're considered a contractor. If you're receiving a W 2, 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 regular employee or not.

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 that period of 2 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.

The eligible employer do 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 enroll in public service loan forgiveness. But there is a form that you fill out that shows that you have Been working at an eligible employer at the end 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 get rid of employee records after a period of time, so it would be hard for them to, um, be able to verify that you were working at them for that period. So the best thing to do is to complete the form each year that you are completing qualified service. And again, all of this information is right on studentaid.

gov that you can fill out that form. For each year. And, um, send that information in that you are doing the qualified employment and service. Once you do send in that first year of qualified work with that PSLF form, then you will receive information from your servicer showing how many qualified payments you're making towards that plan while you are doing qualified service on that.

So you will be able to keep track of that once you do send in that first. Form showing that you do qualified service again. You don't have to do that annually. So if you, 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 need to 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 what that process looks like at that point.

We do have some information that was developed by NASPA to help people that are going back into repayment after the repayment pause. And one of the steps that you want to do now, so you want to take a look. 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, do EDB log into your account there, and it will show you who the servicer is on your loan.

It will also show any federal loans that you might have. Um, and if they are in different servicers, for example, if you have a federal Perkins loan, that will probably have a different servicer than any direct loans or fell loans that you may have. So you want to 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 want to 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.

In a 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 that information is up to date. That 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 what. Payment plan works best for you. And now with the advent of the new state program, if you did determine a repayment program, when you did your exit counseling, that's different from what you think you want to enroll in today. You can go again through your servicer or through student aid dot Gov.

And select a new payment plan for that. Because in the 3 years, since you may have been making payments. You may, there may be a different payment plan that works best for you now and confirm that you are on that best plan with your servicer. And once you select your plan, you want to change that again with your servicer or on the portal at studentaid.

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 re verify that information with your servicer so that they can, um, do automatic payments on those loans again. That's not going to automatically happen for you, so you want to make sure that you do review that information with your servicer.

So, if you were expecting to just go right back into automatically payment. Like 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 before the loan payments may start up so that you make sure that you don't miss any of those payments.

So again, you want to confirm your loan servicing account, log into your loan servicer. Again, reauthorize and select that auto debit and review the balance 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 If it looks different than you thought it might based on those repayment plans.

You might want to Use, um, some of the loan calculators that are out there on studentaid. 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 want to take a look at your servicer and be ready for those payments.

Look at your personal budget while the payment pause happened that you were having to make. Payments on these loans, 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 based repayment programs will be helpful to you. Be patient. Um, right now, all of the loan servicers don't have As much staffing as they may need for everyone re entering repayment. So you may have experienced some longer hold times on the, uh, from the servicers than you may expect in normal times.

But be patient, remain diligent, make sure that Your information is correct and try to be patient with your service or keep documentation of any changes that you will have made. 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 a genuine servicer, but might be saying that they have Some ways for your loans to be forgiven, some ways for you to lower your monthly payments, some of those may be scams. So make sure that you are getting information from your servicer directly or from studentaid.

gov. And when you are communicating with your servicer, make sure you go directly to their site yourself. And log in with the login that you have set up rather than using any type of link from an email so that you make sure that you're giving out any information properly to the right channel.

And that was a lot of information to go through in an hour. Um, are there any questions about. Any of that information and please continue to connect with us on social media, we'll be sending out more information as more information becomes live on the same program and what the actual dates are, will that will that will be active, we'll be sharing that as well on social media and through emails as well.

So please connect with us. That way as well. And please, if you have any questions, let us know. We will be sending out copies in a recording copies of the slides in a recording of this webinar to you early next week. I don't see any questions in the chat in the Q& A, Sean. Okay, if we don't have any questions, I thank you very much for attending today.

I know this is very complicated information. If you have questions and you want to talk about your situation personally, you can always call VIFA at 800 449 6332 and we can talk to you individually about your loans and what the different options are as well. Thank you so much. I hope you have a great Friday afternoon and a great weekend.

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