WIXLIB

Michael BeuttelFinancial Professional1

AgendaThe student loan crisisManaging student loan debtLoans and tax responsibilitiesRepayment plansStudent loan default and delinquency repayment optionsRetirement planningPutting it all together2

The studentloan crisis3

The student loan crisis Student loan debt 37,172 1.5 trillion 393When they graduate, theaverage student loanborrower has 37,172 instudent loansAmericans owe 1.52trillion in student loandebt, more than auto andcredit card debt,exceeded only by homemortgagesThe average monthlystudent loan payment is 393Source: U.S. Average Student Loan Debt Statistics in 2019. Credit.com. June 19, 2019.4

The student loan crisis Student loan debt by generation 39,802 33,579 36,246 11,830Gen ZMillennialsGen XBaby BoomersSource: What is the Average Student Loan Debt? Experian.com. March 16, 20185

The student loan crisis Rising student loan rates 2017 – 2018 academic yearUndergraduate federal loanrates increased from 3.76%to 4.45%Graduate loan ratesincreased from 5.31% to 6%Grad Plus and ParentPlus loans rose from6.31% to 7%Source: Federal Student Loan Rates Rising for the First Time in 3 Years. Thinkadvisor.com, June 23, 2017.6

Managing studentloan debt7

Public service employees8

Managing student loan debtPublic service employees 33 millionGovernment andnonprofit sectoremployees qualify forpublic serviceloan forgivenessOnly 1%take advantage of itDon’t join the 99% who are eligible, but failto take advantage of the programSource: Public Service Loan Forgiveness. StudentDebtRelief.us. Retrieved December 4, 2019.9

Managing student loan debtPublic Service Loan Forgiveness (PSLF)EligibilityEligible loansFull-time employees at afederal, state or localgovernment agency, as wellas nonprofit workers at anorganization with a501(c)(3) designation. Federal Direct SubsidizedStafford/Direct Loans Federal DirectUnsubsidizedStafford/Direct Loans Federal Direct PLUSLoans Federal DirectConsolidations LoansRequirements Make 120 on-time paymentstoward your Direct Loans* Payments must be under aqualifying plan, such as:Income-Based Repayment(IBR), Pay As You EarnRepayment (PAYE), RevisedPay As You Earn (REPAYE),Income-Contingent (ICR) andStandard Repayment. Work full-time at a qualifyingorganization. You do not haveto work at the same place for10 years to qualify.* Only payments made after Oct. 1, 2007 can be counted toward PSLF. The earliest that any borrower will be eligible to apply forPSLF was fall 2017.10

Teachers

Managing student loan debt Teacher Loan ForgivenessEligibilityTeachers who work at low-incomeschools. Go to www.tcli.ed.gov to checkschool eligibility status Teachers with federal DirectLoans or Stafford Loans areeligible for up to 17,500forgiven if they are highlyqualified full-time math orscience teachers in an eligiblesecondary school. Elementary or secondaryteachers who teach in an arearelated to their academic majorare eligible for up to 5,000forgiven. Loans originatingprior to October 1,1998 arenot eligible.Eligible loans Federal Direct SubsidizedStafford/Direct Loans Federal Direct UnsubsidizedStafford/Direct Loans Federal Direct PLUS Loans* Federal DirectConsolidations LoansRequirements You must teach in a low-incomeelementary or secondary school You cannot have loans thatoriginated beforeOctober 1, 1998 Your loans must not be in default Work full-time as a teacher for fiveconsecutive years Be a highly qualified teacher, whichmeans obtaining state certificationand holding a license in the stateyou teach in* Only payments made after Oct. 1, 2007, can be counted toward PSLF. The earliest that any borrower will be eligible to apply for PSLF is fall 2017.If you only have PLUS loans, you are not eligible for this program.12

Managing student loan debt Teacher Cancellation for Federal Perkins LoanEligibilityFull-time teachers at lowincome public or nonprofitelementary or secondaryschools or those thatspecialize in certainsubjects, like math, science,and special education, aswell as teachers working ina private school that has itsnonprofit status, working atan educational serviceagency or teaching in adesignated subjectshortage area.Eligible loans Federal Perkins LoansRequirements Teachers must work full-timefor a full academic year toqualify for loan cancellation,which may include:̶ 15 percent of their loanscancelled for the first andsecond years of service̶ 20 percent of their loanscancelled for the third andfourth years of service̶ 30 percent of their loanscancelled for the fifth yearof service13

Managing student loan debt State-sponsored Teacher Loan Forgiveness ProgramsEligibilityNew YorkTeachers must work for six yearsin an authorized New York CityDepartment of Education schoolRequirementsEligible loansUp to 24,000 TexasTeachers that work in a field aswell as a community, where thereis a shortage of teachersUp to 2,500IllinoisTeachers who work inlow-income schoolsUp to 5,000 Possession of an appropriate New York State initial orprovisional certificate corresponding to one of the shortageareas - or An official letter from the college/university indicating thatthey have satisfactorily completed a state approvededucation programBilingual areas require possession of a bilingual extension tothe certificateProof of U.S. Citizenship or Permanent ResidencyBe a U.S. citizen or an eligible non-citizenBe an Illinois residentBe a borrower who has had an amount of your educationalloans forgiven under the federal government’s loanforgiveness programsHave a balance remaining on your eligible student loan(s)Have fulfilled your five-year teaching obligation in an Illinoiselementary or secondary school designated as alow-income school14

Parent PLUS Loans

Managing student loan debtWhat are Parent PLUS Loans? Federal education loans borrowed by parents of dependent undergraduate students who areenrolled half-time at an eligible college or universityAllow you to borrow as much as you need – up to the total cost of attendance – in YOUR nameHave the highest interest rate of any federal student loan16

Managing student loan debtParent PLUS Loan forgivenessProgramEligible loansRequirementsIncome-contingentParent PLUS loans are not eligibleuntil you consolidate them firstwith a Direct Consolidation Loan. Must have entered repayment on or after July 1, 2006. Caps your payment at 20% of your discretionaryincome or the amount you would pay on a fixed12-year plan, whichever is lower. Extends the repayment plan to 25 years. After 25 years worth of payments, the remainingbalance is forgiven, but is considered taxable income.Federal Public ServiceLoan ForgivenessLoans under the Direct LoanProgram are eligible forforgiveness if you work full-timein a qualifying public service job,and you make 120 qualifyingpayments. Eligible candidates must be employed by a publicservice organization defined by the programconditions and be a full-time employee (30 hoursper week). You need to sign up for an income-driven repaymentplan by including your Parent PLUS Loan in a FederalDirect Consolidation Loan. You must make 10 years worth of payments to qualifyfor forgiveness.Sources: How to Get Student Loan Forgiveness for Parents. SavingForCollege.com. December 26, 2018.Parent PLUS Loan Forgiveness is Possible: Here’s How to Get it. StudentLoanHero.com. March 30, 2018.17

Older Americans

Managing student loan debt Student loan debt among older AmericansDid you know older Americans represent thefastest-growing segment of the U.S. student loan market12.8 million2Americans over age 60 withoutstanding student loan debtNearly 40%3Americans over age 65 indefault on their federalstudent loans 66.7 billion2Student loan debt olderAmericans are now carryinginto retirement73%2Older Americans have loansto finance children’s andgrandchildren’s educationSources: 1More People Over 60 Are Struggling to Pay Off Student Loans, Report Finds. www.npr.org. January 17, 2017.2The Student Loan Crisis of Older Americans, Forbes, January 6, 2017.3Older Americans: The new face of student loan debt. Foxbusiness.com. August 11, 2018.19

Managing student loan debtSocial Security offset Student loan in default may be certified as eligible for offset, which is garnishment Certain monthly federal payments, such as tax refunds and Social Security benefits,are used to offset the defaulted loan In 2015, seniors had 171 million garnished from their Social Security and disabilitybenefits due to their loan defaults Government may not garnish more than 15% of a senior’s Social Security benefit or anyamount that cuts their checks below 750 a month 75% of older borrowers were subject to offset on loans for their own educationSource: Social Security Offsets: Improvements to Program Design Could Better Assist Older Student Loan Borrowers withObtaining Permitted Relief. www.gao.gov. December 2016.20

Managing student loan debtWhat to do if you are struggling with student loan debt? Seek a payment plan to lower your monthly bill‒ Consolidation‒ Income-driven repayment plans Understand your rights and responsibilities as a co-signer Know how to protect your Social Security income File a complaintSource: Older Americans are Sacrificing Retirement to Pay Off Student Debt. www.consumerreports.org. January 5, 2017.21

Temporary ExpandedPublic Service Forgiveness

Managing student loan debtTemporary Expanded Public Service ForgivenessThe Consolidated Appropriations Act, 2018 provided limited, additional conditions under which you may becomeeligible for loan forgiveness if some or all of the payments you made on your William D. Ford Federal Direct Loan(Direct Loan) Program loans were under a nonqualifying repayment plan for Public Service Loan Forgiveness(PSLF). The U.S. Department of Education (ED) is referring to this reconsideration as the Temporary Expanded PublicService Loan Forgiveness (TEPSLF) opportunityTo qualify for loan forgiveness under the TEPSLF opportunity you must have: Submitted the Public Service Loan Forgiveness (PSLF): Application for Forgiveness (PSLF application) and had that application deniedonly because some or all of your payments were not made under a qualifying repayment plan for PSLF Had at least 10 years of full-time employment certified by a qualifying employer and approved by FedLoan Servicing, ED’s federal loanservicer for the PSLF Program Met the TEPSLF requirement for the amount you paid 12 months prior to applying for TEPSLF and the last payment you made beforeapplying for TEPSLF to be at least as much as you would have paid under an income-driven repayment plan; and Made 120 qualifying payments under the new requirements for TEPSLF while working full-time for your qualifying employer or employers At a minimum, a qualifying monthly payment is a payment you made: After October 1, 2007 For the full amount due as shown on your bill No later than 15 days after the due date While employed full time by a qualifying employerSource: Temporary Expanded Public Service Loan Forgiveness. StudentAid.gov. Retrieved December 26, 2019.Note: Only DirectLoans are eligible forTEPSLF23

Managing student loan debtTemporary Expanded Public Service ForgivenessHow do I request TEPSLF consideration?Follow these steps to request TEPSLF consideration:1. Prepare an email to FedLoan Servicing requesting that ED reconsider your eligibility for PSLF.2. Include the same name under which you submitted your PSLF application and your date of birthin the email.Source: Temporary Expanded Public Service Loan Forgiveness. StudentAid.gov. Retrieved December 26, 2019.

Loans and taxresponsibilities