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2StudentLoanGuideNewJerseyHigherEducationStudentAssistanceAuthorityTheStudentLoanGuideprovidesgeneralstudentloaninformationtoas-siststudentsandtheirfamiliesinplanningandpayingforapostsecondaryeducationthroughtheuseofstudentloans.ThisguidecontainsinformationthatcoverstheFederalLoanprogramsNewJerseysstateloanprogram-NJCLASSandinformationonotheral-ternativeprivateloanoptions.Ourgoalistoprovideyouwithinformationtoassistyouinnavigatingyourwaythroughthestudentloanprocess.OurMissionTheHigherEducationStudentAssistanceAuthorityHESAAisaNewJerseyauthoritythatprovidesstudentsandfamilieswiththenancialandinformationalresourcesforstudentstopursuetheireducationbeyondhighschool.Withrootsdatingbackto1959HESAAssingularfocushasalwaysbeentobenetthestudentsitserves.ApplyingforAidTherststepinthenancialaidprocessiscompletionoftheFreeAp-plicationforFederalStudentAidFAFSA.StudentsuseFAFSAonthe StudentLoanGuide3Webwww.fafsa.govtocompletetheirapplications.TheinformationonyourFAFSAistransmittedtotheschoolsthatyoulistontheapplicationandtheStateofNewJersey.InformationontheFAFSAassiststhefederalgovernmentthecollegesandtheStateindeterminingyoureligibilityforcollegegrantsStategrantsandfederalnancialaid.BeAwareBeforeYOUBORROWTherearemanyalternativesavail-ableforyoutopayforcollege.YoushouldexplorealloptionsincludingGrantsScholarshipsYoushouldrstexploreallofyouroptionsforfreemoney.Manystudentsusestatefederalandcollegegrantsscholarshipstohelppayfortheireducation.Neithergrantsnorscholarshipshavetoberepaid.BecausetheFAFSAisusedtodetermineeligibilityformanygrantsandscholar-shipsitisimportantthatyoucompleteyourapplicationtimely.BeawareofStatedeadlinesforapplyingforStategrantsandscholarships.Makesureyouinvestigateprivatescholarshipsorcommunityscholarshipsthatmightbeavailabletoyou.InstitutionalAidThetermInstitutionalFinancialAidreferstoanyscholarshiporgrantawardedbytheuniversityorcollegesownrestrictedorunrestrictedfundingsources.Institutionalbasednancialassistanceprogramsof-feredandcontrolledbytheindividualcollegessuchasalumnischol-arshipsandendowmentsfromprivatedonorsarereferredtoasinsti-tutionalaid.Studentsshouldexploreallopportunitiesavailabletothem.CollegeSavingsPlansHESAAoffersaState-sponsored529collegesavingsplantohelpfamiliesmeetthecostofcollege.SavingwithNJBESTNewJer-seyBetterEducationalSavingsTrustoffersmanybenetsin-cludingStateandfederaltax-freeearningsandalsooffersascholar-shipofupto1500forthosestudentswhoqualifyandwhoattendaschoolinNewJersey.visitwww.njbest.comformoreinformationTuitionPaymentPlansCheckwithyourschooltoseeifitparticipatesinatuitionpaymentplanthatwillallowyoutomakemonthlypaymentstothecollegeovertheschoolyear. 4StudentLoanGuideAdditionalSourcesofAidOthersourcesofaidtoassistwithcollegecostsincludePersonalsavingsCommunityandcorporategrantsandscholarshipsServiceprogramssuchasAmeriCorpsadomesticPeaceCorpsEmployer-sponsoredtuitionassistanceprogramsTheAwardPackageGenerallyeachschoolyouapplytowillprovideyouwithanawardpack-agethatcontainsinformationaboutthenancialaidawardedtoyou.Theawardpackagemaycontainfederalstateinstitutionalgrantsandschol-arshipsandothertypesofaidtohelpyoumeetthecostsofgoingtocol-legeorcareerschool.FederalstudentloansknownasDirectloansareusuallyawardedaspartoftheawardpackage.PayingforCollegeWhenLoansaretheOnlyRemainingOptionWhilestudentloanscanhelpyouachieveyoureducationalgoalsyoushouldalwaysborrowwisely.NewJerseyHigherEducationStudentAssistanceAuthorityHESAAencouragesyoutoborrowresponsiblyandconsiderallfnancialaidoptionsincludinggrantsscholarshipsandfederalstudentloansbeforeapplyingforanypri-vateloanincludingHESAAsNJCLASSfxedrateloan.Formoreinformationongrantsandscholarshipsandwaystomini-mizeborrowingvisitwww.hesaa.orgorwww.njclass.org.FederalStudentLoansFederalDirectStudentLoansarelow-interestloansforstudentstohelppayforthecostoftheireducationafterhighschool.TherearetwotypesofFederalLoansforstudentsFederalPerkinsandFederalDirect.FederalPerkinsLoanProgramAFederalPerkinsLoanisalow-interest5loanforbothundergraduateandgraduatestudentswithexceptionalnancialneed.FederalPerkinsLoansaremadethroughaschoolsnancialaidofce.Yourschoolisyourlenderandtheloanismadewithgovernmentfunds.Youmustrepaythisloantoyourschool.Studentscanborrowupto5500foreachyearofundergraduatestudy.Theamountyoureceivedependsonwhenyouapplyyournancialneedandthefundinglevelattheschool.Youstart StudentLoanGuide5payingbackyourloanninemonthsafteryougraduateleaveschoolordropbelowhalf-timestatus.Thisiscalledagraceperiod.Ifyoureattendinglessthanhalftimecheckwithyourcollegeorcareerschooltondouthowlongyourgraceperiodwillbe.FormoreinformationonthePerkinsLoancontactyourcollegeforspecicrequirementsandrepaymentoptions.FederalDirectStudentLoanstherearetwotypesSubsidizedforstudentswithdemonstratednancialneedasdeterminedbyfederalregulations.Interestispaidbythefederalgovernmentwhileastudentisinschoolatleasthalftimedur-ingthesixmonthgraceperiodandduringdefermentperiodsape-riodduringwhichaborrowerwhomeetscertaincriteriamaytem-porarilysuspendloanpayments.EffectiveJuly12013thelawlimitsthebenetsoftheDirectLoaninterestsubsidytoanaggregatedperiodofnomorethan150ofprogramlengthfornewborrowers.OncethatlimithasbeenreachedtheborrowerwillbegintoincurinterestchargesonoutstandingsubsidizedloansiftheborrowerisenrolledatleasthalftimeinaprogramincludingpreparatorycourseworkthatwouldotherwisequalifytheborrowerforaDirectSubsidizedLoan.For201415awardyeartheinterestrateisxedat4.66witha1.072originationfee.Unsubsidizednotbasedonnancialneedinterestischargedduringallperiodswhilethestudentisinschoolandduringgraceanddefermentperiods.Yourschoolwilltellyouhowmuchyoumayborrowandtheamountoffederalloansyouareeligibletoreceive.Thereareloanlimitsbaseduponyouryearofattendanceandaggregatelimitsalsoapply.FordependentundergraduatestudentstheannualloanlimitsareasfollowsDependentUndergraduatesTotalSubsidizedUnsubsidizedAdditionalUnsubsidizedFirstYear35002000SecondYear45002000ThirdYearandBeyond55002000Theschoolsnancialaidofcewillprovideyouwithinstructionsandguidanceaboutapplyingforfederalstudentloans.SomeschoolsmaywantyoutoapplythroughtheirownwebsiteandsomeschoolsmaydirectyoutotheU.S.DepartmentofEducationswebsite. 6StudentLoanGuideAllFederalDirectStudentLoansrequirersttimestudentborrowerstocompleteentrancecounselingsothatyouunderstandtheobligationsassociatedwithfederalstudentloans.OnceyouhavecompletedtheentrancecounselingyouwillberequiredtocompleteaMasterPromissoryNoteMPN.TheMPNcontainsallthelegaltermsandconditionsassociatedwiththefederalstudentloanandisthelegaldocumentthatobligatesyoutorepayyourstudentloans.TheMPNallowsformultipleyearborrowing.IfyouchangeschoolsyoumayberequiredtocompleteanewMPN.Checkwithyourcollegewebsitetondouthowtocompleteyourstudentloanentrancecounselingsessionorgotowww.mappingyourfuture.orgformoreinformation.WithDirectLoansyouBorrowthroughtheschoolfromthefederalgovernmentandhaveasinglecontactaDirectLoanServicingCenterforeverythingrelatedtotherepaymentofyourloansevenifyoureceiveDirectLoansatdifferentschools.HaveonlineaccesstoyourDirectLoanaccountinformation24hoursaday7daysaweekatDirectLoansontheWebatwww.nslds.ed.gov.Canchoosefromseveralrepaymentplansthataredesignedtomeettheneedsofalmostanyborrowerandyoucanswitchrepaymentplansifyourneedschange.RememberUnderstandYourObligationYoumustrepayyourstudentloansevenifyoudonotgraduateorgetajobinyourchoseneld.Failuretomakescheduledpaymentscouldleadtodefaultwhichwoulddamageyourcreditratingandleadtootherseriousconsequences.Beforeyouborrowastudentloanthinkaboutwhetheryouwillbeabletorepayit.Thisloanwillreducewhatyoucanspendinthefutureonacarhomefurnitureandotherlivingexpenses.HerearesomethingsyoucandowhileyouareincollegetohelpsavemoneyIdentifyneedsversuswantsandmakeyourpurchasesaccordingly.Makearealisticbudgetandsticktoit.Takeadvantageofwork-studyopportunitiesorgetapart-timejob. StudentLoanGuide7RepaymentExampleDuetothefrequentchangesintheLIBORrateandFederalfundsrateuponwhichtheloaninterestratesarebasedyouwillneedtocheckeachcommerciallenderswebsiteforthemostup-to-dateinformation.Gotopage30toseeexamplesofmonthlypaymentsatvaryinginterestratesRepayUpholdYourPromiseRepayingyourstudentloansisaseriouslegalobligationsoyouneedtosetasideenoughmoneytomakeyourstudentloanpaymentontimeandinfulleachmonth.Yourlenderwilldependonyoutoupholdyourpromisetorepaysothattheycanmakeloanstootherdeservingstu-dents.Bypayingyourstudentloanontimeyouwillbeactingasaresponsibleborrower.Youwillalsobesuccessfullymanagingyournancesandestablishinggoodcredit.Someloansofferagraceperiodwhenyougraduateleaveschoolordropbelowhalf-timestatus.Duringthegraceperiodyouarenotrequiredtomakemonthlypayments.Inmostinstancesthiswillincreasetheamountthatyouwilleventuallyrepayasinterestchargesareincreasingonyourloanssocheckwithyourlender.Attheendofyourgraceperiodyoumustbeginmakingmonthlypayments.Contactyourlenderifyouareunabletomakeyourmonthlypayments.Youmayqualifyforotherrepaymentoptionsorbeabletopostponeorreduceyourpaymentsbyapplyingforadefermentorforbearance.Theseshouldbeusedonlyintimesofextremeneedandwillincreasetheamountthatiseventuallyrepaidonyourloan.ExitCounselingFederalregulationsrequirefederalstudentloanborrowerscompleteexitcounselingbeforetheyleaveschoolgraduateorwithdrawordropbelowhalf-timestatus6credits.Thisrequirementensuresthatyouwillreceiveessentialinformationregardingyourrightsandresponsibilitiesasastu-dentloanborrower.Youwillreceiveinformationaboutthetypesofloansyoureceivedwhenandwheretomakeyourpaymentswhattodoifyoucannotmakeyourpaymentsandwhatcanhappenifyoudonotmakeyourpayments.Inmanycasesifyoufailtocompleteexitcounselingaholdwillbeplacedonyourrecords.Youwillnotbeabletore-enrollinclassesorobtainothercollegeuniversityservicesanddocumentsincludingbutnotlimitedtoyourtranscriptsordiploma. 8StudentLoanGuideFederalRepaymentPlansStudentborrowersarenotrequiredtobeginmakingpaymentsontheirFederalDirectStaffordloansuntilaftertheydropbelowhalf-timeat-tendance.Followingyourgraduationwithdrawalorlessthanhalf-timeenrollmentyouareprovidedasix-monthgraceperiodonyourFederalDirectStaffordloansandanine-monthgraceperiodonyourFederalPerkinsLoan.TherepaymentperiodforaDirectPLUSLoanbeginsatthetimethePLUSloanisfullydisbursedandtherstpaymentisduewithin60daysafterthenaldisbursement.HoweveragraduatestudentPLUSLoanborroweraswellasaparentPLUSborrowerwhoisalsoastudentcandeferrepay-mentwhiletheborrowerisenrolledatleasthalf-timeandforPLUSloansrstdisbursedonorafterJuly12008foranadditionalsixmonthsaftertheborrowerisnolongerenrolledatleasthalf-time.Interestthataccruesduringtheseperiodswillbecapitalizedifnotpaidbytheborrowerduringthedeferment.ParentPLUSLoanborrowerswhoseloanswererstdisbursedonorafterJuly12008maychoosetohaverepaymentdeferredwhilethestudentforwhomtheparentborrowedisenrolledatleasthalf-timeandforanadditionalsixmonthsafterthatstudentisnolongerenrolledatleasthalf-time.Interestthataccruesduringtheseperiodswillbecapitalizedifnotpaidbytheparentduringthedeferment.Allborrowersmaynotbeeligibleforallrepaymentplans.Someplansarelimitedbaseduponthetypeofloanyouotainedandwhenyouobtainedtheloan.Gotowww.studentaid.ed.govrepay-loansunderstandplansformoreinformation.StandardRepaymentWiththestandardplanyoullpayaxedamounteachmonthuntilyourloansarepaidinfull.Yourmonthlypaymentswillbeatleast50andyoullhaveupto10yearstorepayyourloans.Thestandardplanisgoodforyouifyoucanhandlehighermonthlypay-mentsbecauseyoullrepayyourloansmorequickly.Yourmonthlypay-mentunderthestandardplanmaybehigherthanitwouldbeunderthe StudentLoanGuide9otherplansbecauseyourloanswillberepaidintheshortesttime.Forthesamereasonyoumaypaytheleastamountofinterestduetothe10-yearlimitonrepayment.ExtendedRepaymentTobeeligiblefortheextendedplanyoumusthavemorethan30000inDirectLoandebtandyoumustnothavehadanoutstandingbalanceonaDirectLoanasofOctober71998.Undertheextendedplanyouhave25yearsforrepaymentandtwopaymentoptionsxedorgraduated.Fixedpaymentsarethesameamounteachmonthwhilegraduatedpaymentsstartlowandincreaseeverytwoyears.Thisisagoodplanifyouwillneedtomakesmallermonthlypayments.Be-causetherepaymentperiodwillbe25yearsyourmonthlypaymentswillbelessthanwiththestandardplan.Howeveryoumaypaymoreininter-estbecauseyouretakinglongertorepaytheloans.Rememberthatthelongeryourloansareinrepaymentthemoreinterestyouwillpay.GraduatedRepaymentWiththisplanyourpaymentsstartoutlowandincreaseeverytwoyears.Thelengthofyourrepaymentperiodwillbeupto10years.Ifyouexpectyourincometoincreasesteadilyovertimethisplanmayberightforyou.Yourmonthlypaymentwillneverbelessthantheamountofinterestthataccruesbetweenpayments.Althoughyourmonthlypaymentwillgradu-allyincreasenosinglepaymentunderthisplanwillbemorethanthreetimesgreaterthananyotherpayment.IncomeContingentRepaymentICRNotavailableforparentPLUSloansThisplangivesyoutheexibilitytomeetyourDirectLoanobligationswithoutcausingunduenancialhardship.Eachyearyourmonthlypay-mentswillbecalculatedonthebasisofyouradjustedgrossincomeAGIplusyourspousesincomeifyouremarriedfamilysizeandthetotalamountofyourDirectLoans.UndertheICRplanyouwillpayeachmonththelesserof1.theamountyouwouldpayifyourepaidyourloanin12years-multipliedbyanincomepercentagefactorthatvarieswithyourannualincomeor2.20ofyourmonthlydiscretionaryincome.MonthlydiscretionaryincomeequalsyourAGIminusthepovertylevelforyourstateofresidenceandfamilysizedividedby12. 10StudentLoanGuideIfyourpaymentsarenotlargeenoughtocovertheinterestthathasaccumulatedonyourloanstheunpaidamountwillbecapitalizedonceeachyear.Howevercapitalizationwillnotexceed10oftheoriginalamountyouowedwhenyouenteredrepayment.Interestwillcontinuetoaccumulatebutwillnolongerbecapitalized.Themaximumrepaymentperiodis25years.Ifyouhaventfullyrepaidyourloansafter25yearstimespentindefermentorforbearancedoesnotcountunderthisplantheunpaidportionwillbedischarged.Youmayhoweverhavetopaytaxesontheamountthatisdischarged.Income-BasedRepaymentIBRUnderthisplantherequiredmonthlypaymentwillbebasedonyourin-comeduringanyperiodwhenyouhaveapartialnancialhardship.Yourmonthlypaymentmaybeadjustedannually.Themaximumrepaymentpe-riodunderthisplanmaynotexceed10years.Ifyoumeetcertainrequire-mentsoveraspeciedperiodoftimeyoumayqualifyforcancellationofanyoutstandingbalanceonyourloans.AllStaffordPLUSandConsolidationLoansmadeundereithertheDirectLoanorFFELProgramareeligibleforrepaymentunderIBREXCEPTloansthatarecurrentlyindefaultparentPLUSLoansPLUSLoansthatweremadetoparentborrowersorConsolidationLoansthatrepaidparentPLUSLoans. StudentLoanGuide11PayAsYouEarnNotavailableforParentPLUSLoansThePayAsYouEarnRepaymentPlanhelpskeepyourmonthlystudentloanpaymentsaffordableandusuallyhasthelowestmonthlypaymentamountoftherepaymentplansthatarebasedonyourincome.Ifyouneedtomakelowermonthlypaymentsthisplanmaybeforyou.GeneralEligibilityToqualifyforPayAsYouEarnyoumusthaveaparalnancialhardship.Youhaveaparalnancialhardshipifthemonthlyamountyouwouldberequiredtopayonyoureligiblefederalstudentloansundera10-yearStandardRepaymentPlanishigherthanthemonthlyamountyouwouldberequiredtorepayunderPayAsYouEarn.YoualsomustbeanewborrowerasofOct.12007andmusthavereceivedadisbursementofaDirectLoanonoraerOct.12011.YouareanewborrowerifyouhadnooutstandingbalanceonaDirectLoanorFFELProgramloanwhenyoureceivedanewloanonoraerOct.12007Yourpaymentamountmayincreaseordecreaseeachyearbasedonyourincomeandfamilysize.OnceyouveinitiallyqualiedforPayAsYouEarnyoumaycontinuetomakepaymentsundertheplanevenifyounolongerhaveapartialnancialhardship. 12StudentLoanGuideSampleRepaymentPlancalculatedona6.8fxedrateTodeterminewhatyourestimatedrepaymentamountmaybegotowww.mappingyourfuture.orgfortherightcalculatorInitialDebtWhenYouEnterRepaymentStandardNottoexceed10yearsExtendedNottoexceed25yearsGraduatedNottoexceed10yearsPerMonthTotalRepaidPerMonthTotalRepaidPerMonthTotalRepaid3500.00504471.00256092.00256405.005000.00586905.00408703.00369150.007500.008310357.005913055.005413725.0010500.0012114500.008318277.007619215.0015000.0017320714.0011926110.0010827451.0040000.0046055239.0031672717.0019784352.00 StudentLoanGuide13FederalDefermentForbearanceDuringrepaymentyoumayencountersomeunforeseennancialsitua-tionsthatmakeitdifculttorepayyourstudentloan.Itsveryimportantduringthesetimesthatyoudontignorethepayment.Youmuststillhonoryourobligationandthereareoptionsavailabletohelpeaseyournancialburden.ThesetwooptionsareknownasDefermentandForbearance.DefermentDefermentisaperiodoftimeduringwhichnopaymentsarerequiredandinterestdoesnotaccrueonSubsidizedDirectLoans.InthecaseofUn-subsidizedDirectLoansinterestmustbepaidduringadefermentperiodortheinterestiscapitalized.DefermentTypesMilitaryUnemploymentEconomicHardshipInSchoolDefermentDisabilityForbearanceForbearanceisatemporarypostponementorreductionofpaymentsduetonancialhardship.Duringthistimeintereststillaccruesandcaneitherbepaidmonthlyoraddedbackintothebalanceoftheloan.Formoredetailedinformationaboutdefermentsandforbearanceseeyourservicerswebsiteorgotowww.direct.ed.govpostpone.html. 14StudentLoanGuideCommonConcernsNotknowingwhattypeofloanaborrowerhasorwhoservicestheirloanisaverycommonconcernforborrowers.InresponsetothesecommonquestionstheUnitedStatesDepartmentofEducationsNationalStudentLoanDataSystemNSLDSatwww.nslds.ed.govisthecentraldatabaseforfederalstudentaid.YouwillneedyourFederalStudentAidPINtoaccessthedatabase.FormoreinformationonyourPINvisitwww.pin.ed.gov.Paymentissuesareanotherconcerntoborrowersespeciallywhenapay-mentisnotmadeoraborrowerisonlyabletomakeapartialpayment.IfyouencounterpaymentissuesDontIgnoretheProblem.YoucanContactyourlenderimmediatelytodiscussoptions.Considerchangingyourrepaymentplanifyourcurrentoneisnotfavorable.Keeptrackofallcommunications.LoanForgivenessUndercertaincircumstancesyoumayqualifytohavealloraportionofyourloansforgiven.Toqualifyyoumustperformvolunteerworkper-formmilitaryserviceteachorpracticemedicineincertaintypesofcommunitiesormeetothercriteriaspeciedbytheforgivenessprogram.Tolearnmoreaboutloanforgivenessprogramsvisitwww.naid.orgloansforgiveness.phtml.FederalPerkinsloanborrowersandorFederalStaffordloanborrowersmaybeeligibleforpartialloanforgivenessorloanredemption.TeacherLoanForgivenessTheTeacherLoanForgivenessProgramisintendedtoencourageindividualstoenterandcontinueintheteachingprofession.Underthisprogramindividualswhoteachfulltimeforveconsecutivecom-pleteacademicyearsincertainelementaryandsecondaryschoolsthatservelow-incomefamiliesandmeetotherqualicationsmaybeeligibleforforgivenessofuptoacombinedtotalof17500inprincipalandinterestontheirFFELandorDirectLoanprogramloans.NoteAsofAugust142008anotherwiseeligibleborrowermayqualifyforforgive-nessiftheborrowerhasprovidedqualifyingteachingservicesatoneormorelocationsthatareoperatedbyaneducationalserviceagency. StudentLoanGuide15PublicServiceLoanRedemptionThePublicServiceLoanForgivenessProgramwascreatedtoencourageindividualstoenterandcontinuetoworkfulltimeinpublicservicejobs.Underthisprogramyoumayqualifyforforgivenessoftheremainingbal-ancedueonyoureligiblefederalstudentloansafteryouhavemade120paymentsonloansundercertainrepaymentplanswhileemployedfulltimebycertainpublicserviceemployers.Onlynon-defaultedloansmadeundertheWilliamD.FordDirectLoanProgramareeligibleforloanforgiveness.TheDirectLoanProgramincludesthefollowingtypesofloansFederalDirectStaffordLoansDirectSubsidizedLoansFederalDirectUnsubsidizedStaffordLoansDirectUnsubsidizedLoansFederalDirectPLUSLoansDirectPLUSLoansforparentsandgraduateorprofessionalstudentsFederalDirectConsolidationLoansDirectConsolidationLoansLoanConsolidationAnotherOptionAFederalConsolidationLoanallowsyoutocombineallthefederalstudentloansyoureceivedtonanceyourcollegeeducationintoasingleloan.Thisprogramdoesnotallowforalternativeprivateloanconsolidation.HowDirectStudentLoanConsolidationWorksDirectloanconsolidationisfacilitatedthroughtheUnitedStatesDepartmentofEducation.Essentiallyyouprovidetheaccountinforma-tionforeachofyourfederalstudentloansandtheyareallpooledtogether.TheinterestrateonaFederalDirectConsolidationloanisxedandisbasedontheweightedaverageofyourloansroundeduptothenearest18andacapof8.25. 16StudentLoanGuideDirectLoanConsolidationPaymentReliefOneofthekeybenetsofconsolidatingyourfederalstudentloansispaymentrelief.Bycombiningallofyourstudentloansintooneconsoli-datedloanyoucanlengthenyourrepaymenttermfromthestandard10yearstoupto30yearsloweringyourmonthlypaymentsdependingontheamountofyoureducationdebts.DefaultIfyoudefaultitmeansyoufailedtomakepaymentsonyourstudentloanaccordingtothetermsofyourpromissorynotethebindinglegaldocu-mentyousignedatthetimeyoutookoutyourloan.Inotherwordsyoufailedtomakeyourloanpaymentsasscheduled.Yourschoolthenan-cialinstitutionthatmadeorownsyourloanyourloanguarantorandthefederalgovernmentallcantakeactiontorecoverthemoneyyouowe.Herearesomeconsequencesofdefault.ConsequencesofDefaultNationalcreditbureauscanbenotiedofyourdefaultwhichwillharmyourcreditratingmakingithardtobuyacarorahouse.Youwillbeineligibleforadditionalfederalstudentaidifyoudecidetoreturntoschool.Loanpaymentscanbedeductedfromyourpaycheck.Stateandfederalincometaxrefundscanbewithheldandappliedtowardtheamountyouowe.Youwillhavetopaylatefeesandcollectioncostsontopofwhatyoualreadyowe.Youcanbesued.Obviouslyyoudontwanttoletyourloangointodefault.Howevershouldthishappenndoutwhatoptionsareavailablebycontactingyourloanservicer. StudentLoanGuide17FederalParentLoansandAlternativeLoansFederalDirectPLUSLoanParentsofdependentstudentsmayapplyforaDirectPLUSLoantohelppaytheirchildseducationexpensesaslongascertaineligibilityrequirementsaremet.GraduateandprofessionalstudentsmayapplyforPLUSLoansfortheirownexpenses.Theparentborrowermustbethestudentsbiologicaloradoptiveparent.Insomecasesthestudentsstep-parentmaybeeligible.Theinterestrateforthe201415academicyearisxedat7.9.Interestischargedfromthedateoftherstdisbursementuntiltheloanispaidinfull.Theparentwillpayafeeof4.288oftheloanamountdeductedproportionatelyeachtimealoandisbursementismade.ParentsshouldexploretheStatesponsoredNJCLASSLoanasanalternativePrivateAlternativeLoansPrivateloanscanprovidesupplementalvariableinterestrateoradjust-ableratefundingwhenotherfreeaiddoesnotcovercosts.Theseloansarecreditbasedofferedbybanksothernancialinstitutionsandschools.Parentsandstudentsapplyingforthistypeofloanmaygenerallyrequireacosigner.Besuretoapplyatleast30dayspriortoyourtuitionbilldead-linetoensureadequatetimeforapprovalandprocessingtimelinesasre-quiredbytheTruthInLendingAct.ExamplesofprivateloanlendersareStatesponsoredlenderNewJerseyHigherEducationStudentAssistanceAuthorityHESAANon-ProtbanksorlendersFor-ProtbanksorlendersFixedInterestvs.VariableAdjustableInterestRatesFixedinterestratestudentloansofferthestudenttheopportu-nitytolockintoacertaininterestratetilltheendoftheloanexceptiftheborrowerchoosestorenancetheloan.Thisinterestratewontchangeandwillnotuctuatebasedontheactivityofthemarket.Ifinterestratesincreasethenyouwonthavetomakehigherpayments.Obviouslyifratesfallyourloanwontbeaffectedandyourmonthlypay-mentswillremainthesame. 18StudentLoanGuideAlotofstudentborrowersbelievethataxedinterestrateallowsthemtoafxanumberwithintheirmonthlybudgetwithoutanysurpriseswhenitcomestimetomaketheirstudentloanpayment.Intheeventyouarefacingnancialdifcultiesaxedinterestratestudentloancouldmakethedifferenceinwhetheryouareabletopaythestudentloaninaddi-tiontoyourotherexpensesinordertoachieveyournancialgoals.Variableinterestratestudentloansareconstantlyadjustedaccordingtotheinterestratesthatareapplicableinthecurrentinterestmarketplace.Theseratesdirectlydependontheactivityofthenancialsector.Simplyexplainedwhentherateintheeconomygoesdownalowerinterestrateisappliedonthestudentloan.Butthisprocessworksbothwayswhentherateintheeconomygoesupahigherinterestrateischargedonthestudentloanwhichsigniesthatthemonthlypaymentyouarerequiredtopaywillincrease.Ifyouareconsideringavariablerateloanunder-standthatratechangesmaynotbeinyourfavorandcouldresultinanincreasedmonthlypayment.Whenchoosingavariableinterestratestudentloanreadalltheneprinttoseehowoftentherateisadjusted.Keepinmindthatthemonthlypay-mentsyouwillbepayingwillbehigherasaconsequenceofanincreaseintheinterestrate.AlthoughlendersdotheirbesttokeepthepaymentsaroundthesameamountpermonthincreasesintheRateIndexmayleavethemnooptionbuttoraisetheamountofthemonthlypayment.Thechoicebetweenaxedorvariableinterestrateisapersonalonesolookatyourcurrentnancialsituationaswellaswhatyourfuturenancialgoalsareandchoosewhichoptionisbestforyou.ResearchExploreYourOptionsPrivatestudentloansareconsumerloansmadetoindividualstohelppayforcollege.Theyareprovidedbyfor-protandnonprotlendingorganiza-tionsandarenotbackedbythefederalgovernment.Privatestudentloansaredesignedtosupplementnotreplaceothernancialaidsourcestollfundinggaps.Onlyborrowwhatisneededtocoveryoureducationalexpenses.Workwiththenancialaidofceatyourschooltolookintosourc-esoffederalstateandorschoolaidpriortogettingaprivatestudentloan.Ifyouhavealreadydonethisandarestillunabletocoveryourexpensesaprivatestudentloanmaybeagoodoption.Someprivatestudentloans StudentLoanGuide19requireacosignerapersonwhopromisestobecomelegallyresponsibletopayyourdebtifyoufailtodoso.Generallytheyarelessexpensivethanunsecuredconsumercreditsuchascreditcards.Ifyourequireaprivatestudentloandonotwaituntilyourtuitionbillisduetoapplyforonebecauseyoumayreceivelessfavorabletermsandconditions.Mostprogramsallowborrowerstodelaypaymentsduringschoolandofferhardshipdefermentsduringrepayment.Theseoptionsoftenincreasethetotalamountyouwillpaybecauseinterestchargeswillaccrueduringdefermentperiods.Readallmaterialprovidedtoyoubyyourlenderandaskaboutthingsyoudonotunderstand.Mostprivatestudentloansaremadebyresponsiblelendersandallareregulatedbyconsumercreditlaws.Gettoknowyourlenderpriortoborrowingbecauseyourrelationshipwiththemwillbealong-termone.VisittheBetterBusinessBureauatwww.bbb.orgaskyournancialaidofcerandtalktootherswhohaveworkedwiththelendersothatyoucanmakeaninformeddecision.StateofNewJerseyNJCLASSLoanProgramforUndergraduatesNJCLASSisoneofthemostaffordableandexiblesupplementalstudentloanprogramsinthenationandisanalternativetotheFederalPLUSloan.NJCLASSisavailabletoNewJerseyresidentsattendinganapprovedschoolinorout-of-stateandout-of-stateresidentsenrolledinanap-provedNJ-basedschool.Theborroweristhestudent.NJCLASSgivesyoutheabilitytoborrowasmuchasyouneedtomeettheremainingcostofyourpostsecondaryeducationafterothernancialaidisawarded.NJCLASSmaybeusedforschoolrelatedexpensesincludingtuitionfeesbookssuppliesandroomboard.Therearenoannualandoraggregateloanlimits. 20StudentLoanGuide20142015NJCLASSFixedorVariableInterestRatesandRepaymentOptions10-YearRepaymentTermImmediateRepaymentofPrincipalandInterest3AdministrativeFeefortheFixedRateloan0AdministrationFeefortheVariableRateloanFixedRate-5.99orVariable-4.48Theborrowerbeginspayingonamonthlybasisloanprincipalandinterestwithin60daysaftertherstdisbursement.15-YearRepaymentTermImmediateRepaymentofPrincipalandInterestorMonthlyInterestOnly3AdministrativeFeeFixedRate-6.95Theborrowerbeginspayingonamonthlybasisloanprincipalandinterestwithin60daysaftertherstdisbursement.20-YearRepaymentTermFullDeferralWhileinSchoolatLeastHalf-Time3AdministrativeFeeFixedRate-8.40Loanprincipalandinterestpaymentsaredeferreduntilafterthestudentisnolongerenrolledinschoolonatleastahalf-timebasis. StudentLoanGuide21NJCLASSFixedRateLoanProgramRepaymentOptionExamplesKnowYourLoanOptionsIfyouhavetoborrowforyoureducationbesureyouhavetheinformationtomakeaninformeddecision10-YearTermImmediateRepaymentFullyrepayyourloanwithin10years.Beginmakingpaymentsofprincipalandinterestwithin60daysofdisbursement.15-YearTermImmediateRepaymentBeginmakingpaymentsofprincipalandinterestwithin60daysofdisbursement.15-YearTermMonthlyInterestOnlyRepaymentMakemonthlypaymentsofinterestonlywhileinschool.20-YearTermFullDefermentWhileinSchoolBeginmakingpaymentsofprincipalandinterestafternolongerenrolledatleasthalf-time.10YearVariableRateBeginRepaymentImmediatelyLoanAmountBorrowed1000010000100001000010000LoanFee300300300300-InterestRate5.996.746.657.406.657.408.409.154.494.49RepaymentPeriod10Yrs15Yrs15Yrs20Yrs10YrsPaymentwhileinschool112.9389.6355.81-104.51MonthlyPaymentafterschool112.9389.63107.87134.22104.51TotalCosttoBorrower13428.0016239.0016894.0025731.0012401.00Icansavebymakingpay-mentswhileinschool12303.009492.008837.000.0013330.00HowmuchadditionalcanIsavebychoosinga10Yearterm2811.00NJCLASSStepUpNJCLASSreducestheinterestratefortherst48monthlypaymentsofprincipalandinterest12monthlypaymentsforthefulldeferralopon3intheFixedRateProgram.Thisreduconassistsborrowersinrepayingmoreprincipalduringtheseearlymonthswhentheloanbalanceishighest.Theresultisaloweroverallcosttotheborrower.ForFixedRateopon3loanstheratestepsuponthe13thmonthofrepaymentandforopon1and2loanstheratestepsuponthe49thmonthofprincipalandinterestpayment.Theinterestrateincreasesby0.75andstaysatthatratefortheremainderoftheloan.ForGraduateProfessionalxedinterestrateloansthe0.75interestratestepupoccursinthe49thmonthofprincipalandinterestpaymentforallrepaymentopons. 22StudentLoanGuideNewJerseyStateStudentLoansNJCLASSYoumaywanttoconsiderforattendanceataNewJerseyschooloranyel-igibleout-of-stateschoolwhenotherfreeaidandaSubsidizedFederalDirectLoandonotcovercollegecosts.BeadvisedNewJerseyrequiresthatyouletheFAFSArsttoreceiveanystatefed-eralandinstitutionalaid.Besuretoapplyatleast30dayspriortoyourtuitionbilldeadlinetoensureadequatetimeforapprovalandprocess-ingtimelinesasrequiredbytheTruthInLendingAct.NJCLASSoffersAlowxedinterestrateorvariableinterestrateQuickapprovals-onlinesecureapplicationwithe-SignEitherthestudentortheparentcanborrowFlexiblerepaymentoptionsUpto20yearstorepayNoannualandoraggregateloanlimitsAlternativetotheFederalPLUSLoanLowAdministrativeFeeorNoFeeoptionSeewww.njclass.orgformoreinformationonfulltermsandconditions.Allloanoptionsarelimitedandsubjecttoavailability.NJCLASSRepaymentInformationDefermentsareavailableTheminimummonthlyloanrepaymentis50NoprepaymentpenaltyPrincipalinterestrepaymentstarts30daysafterleavingschoolforbor-rowerswhodeferredpaymentswhileinschoolorwhomadeinterestonlypaymentswhileinschool.PLEASENOTEDefermentmustbeauthorizedbysubmittingdocumentationtoHESAAthatestablisheseligibility. StudentLoanGuide23Top10TipsWhenApplyingforPrivateorAlternativeLoans1.EXHAUSTALLOTHERSOURCESOFFUNDINGBEFORELOOK-INGFORAPRIVATELASTRESORTLOAN.CompletetheFAFSA.Besuretopursuescholarshipsfederalgrantswork-studyandfederalloanprogramsStaffordPLUSorNJCLASSbeforeapplyingforapri-vateloan.WhyFederalloansandStatesponsoredloanstypicallycarrylowerxedinterestratesandtheyoffermoreexiblerepaymentoptions.2.Findacosigneryouwillneedone.Findacreditworthycosign-erforexampleaparentgrandparentauntuncleorotherrela-tivetoincreasetheprobabilityofhavingyourloanapproved.Somelendersrequireacosignerwhileothersindicatethatover90oftheirloanshaveacosignerontheapplication.Withoutacosigneraprivateloanwillbeextremelydifculttoobtainandevenifyouareluckyenoughtobeapprovedyouwilllikelypaydearlyforthisloan.3.Evaluateyouralternativesitcansaveyouthousands.Reviewyourschoolslistofpreferredprivateloanlendersifavailable.Stu-dentLendingAnalyticsalsoprovidestheSLAStudentLoanRatingstoassistyouinndingthebestprivatestudentloan.Beawarethatobtainingaprivateloanrequiresacreditapprovalandcertainlend-ersmayrestricttheirlendingactivitiestocertaintypesofinstitutionsorregionalareas.Checkyoureligibilitywithlendersbeforeapplying.ReadaboutFairIsaacsnewpolicychangetolearnabouthowshop-pingforstudentloansovera30dayperiodwillprotectyourcreditscoresatwww.myco.comcrediteducationquestions.SearchthewebforWhyShoppingforStudentLoansCanMakeaBigDifferencetolearnwhyitmakessensetocomparisonshop.4.Stateshaveprivateloanprogramsyoumaywanttoconsider.BeawarethatNewJerseyoffersprivateloanstoNewJerseyresidentsat-tendinganapprovedschoolinorout-of-stateandout-of-stateresidentsenrolledinanapprovedNJ-basedschool.Besuretoevaluatethepro-gramoneachstateswebsiteforeligibilityinterestratesandloanterms.Comparethestatesprogramwithotheralternatives.Beawarethatmanyoftheseprogramshavelimitedfundsavailablesobesuretoapplyearly. 24StudentLoanGuide5.Yourlocalcreditunionmaybeworthashot.Withconservativenan-cialmanagementcreditunionshavelargelyavoidedthecarnagethathasafictedtheU.S.bankingsystem.Ifyouareamemberofacreditunionorbelongtoanafnitygroupthatwouldqualifyyouformember-shipinacreditunioncheckouttheirprivatestudentloanofferings.6.Understandtheinterestrate.Interestratesaredifferent.Therearexedrateloansandvariablerateloans.Manyprivatestudentloanscon-sistofanIndexLIBORorPrimeRateandaMargine.g.5.TodeterminethestartinginterestrateonyourloandeterminethelenderscurrentIndexandaddtheMargin.BeawarethatalmostallprivateloansarevariablerateloanswhichmeansthatratesareadjustedmonthlyorquarterlyandwillgoUPoverthelifeoftheloan.Historicallyexpecttheaverageinterestrateonyourprivateloanmaybe23higherthanyourstartinginterestrate.Dontacceptyourloanofferuntilyouknowtheinterestrateandfeesonyourloan.7.SelecttherepaymentoptionforwhichyournancialsituationallowsWanttosavethousandsofdollarsinloancostsMakeinterestpay-mentsonyourloanwhileinschool.Tomakeinterestpaymentsnotifythelenderthatyouwouldliketoreceivestatementswhileinschool.CantmakepaymentswhileinschoolBesurethatyourlendernotalldooffersanin-schooldefermentoptionwhichwillal-lowyoutopostponepaymentsuntilafteryougraduate.Theremaybeahigherinterestratechargedforthisdeferment.WanttohavethelowestmonthlypaymentKnowthestandardloantermofferedbythelender.Thelongerthetermthelowerthemonthlypaymentbutthemoreinterestyouwillpayoverthelifeoftheloan.Rememberdespitehavingstandardtermsof15-25yearsyoualwayshavetheoptiontopayoffyourloansoonerwithoutpenalty. StudentLoanGuide258.OnceyoutakeoutaprivateloanbeawarethatITWILLNEEDTOBEPAIDBACK.Likefederalstudentloansprivateloansmaynotbedischargeableinbankruptcysobesurethatyouborrowrespon-siblyandnotbeyondwhatyoucanreasonablyexpecttopayback.9.SweatthedetailsreadthePromissoryNote.Lurkingin-sidethatdocumentcouldbeaclausethatallowsalendertoraiseyourinterestrateby2-3ifyouarelateononepayment.10.HavingsecondthoughtsyoucanalwayscanceltheloanifyoumovequicklyenoughReviewthePromissoryNotecloselytodeter-minetheloancancellationrequirementsintermsofthetimingandthestepsnecessarytocancelyourloan.Top10TipsInformationprovidedbyStudentLendingAnalytics2009SLAGuidetoPrivateorAlternativeLoan 26StudentLoanGuideHESAAStudentLoanDictionaryBorrowerThepersonwhoappliesforaloanandreceivestheproceedsormoneyoftheloan.CosignerApersonwhosignsthepromissorynoteinadditiontotheborrowerandisresponsiblefortheobligationiftheborrowerdoesnotpay.AcosignermustbeabletopassacreditreviewandmustliveintheUnitedStates.DefaultFailuretorepayaloanaccordingtothetermsagreedtowhenthebor-rowersignedapromissorynotefortheloan.Defaultonfederalstudentloansoccursat270daysdelinquent.Privateloansmayhavedifferentperiodsfordefault.DefermentAperiodduringwhichaborrowerwhomeetscertaincriteriamaytem-porarilysuspendloanpayments.Forsomeloansthefederalgovernmentpaystheinterestduringadeferment.Onotherstheinterestaccruesandiscapitalizedandtheborrowerisresponsibleforpayingit.DelinquencyFailuretomakemonthlyloanpaymentswhendue.Delinquencybeginswiththerstmissedpayment.DisbursementThereleaseofloanfundstotheschoolfordeliverytotheborrower.Dis-bursementsareusuallymadeinequalmultipleinstallmentsco-payabletotheborrowerandtheschool.Disbursementoffundsmaybesentelec-tronicallytotheschool.EntranceLoanCounselingStudentswithfederaleducationalloansarerequiredtoreceivecounselingbeforetheyreceivetheirrstloandisbursementduringwhichtheborrow-ersrightsandresponsibilitiesandloantermsandconditionsarereviewedwiththestudent.ThesesessionsmaybeconductedonlinebyvideoinpersonwiththeFAAorFAOorinagroupmeeting. StudentLoanGuide27DelinquencyFailuretomakemonthlyloanpaymentswhendue.Delinquencybeginswiththerstmissedpayment.DisbursementThereleaseofloanfundstotheschoolfordeliverytotheborrower.Dis-bursementsareusuallymadeinequalmultipleinstallmentsco-payabletotheborrowerandtheschool.Disbursementoffundsmaybesentelec-tronicallytotheschool.EntranceLoanCounselingStudentswithfederaleducationalloansarerequiredtoreceivecounselingbeforetheyreceivetheirrstloandisbursementduringwhichtheborrow-ersrightsandresponsibilitiesandloantermsandconditionsarereviewedwiththestudent.ThesesessionsmaybeconductedonlinebyvideoinpersonwiththeFAAorFAOorinagroupmeeting.ExitCounselingStudentswithfederaleducationalloansarerequiredtoreceivecounselingbeforetheyleaveschoolgraduateorwithdrawordropbelowhalf-time6creditsduringwhichtheborrowersrightsandresponsibilitiesandloantermsandconditionsarereviewedwiththestudent.ThissessionmaybeconductedonlinebyvideoinpersonwiththeFinancialAidAdministratorFAAorFinancialAidOfcerFAOorinagroupmeeting.FederalDirectStaffordLoansLoansbothSubsidizedneedbasedandUnsubsidizednon-needbasedguaranteedbythefederalgovernmentandavailabletostudentstofundeducation.FederalLoanConsolidationCombiningseveralfederalloansfrommultiplelendersintoasingleloantoreducethemonthlypaymentamountandorincreasetherepaymentperiod.FederalPLUSLoanParentLoansforUndergraduateStudents.Federally-insuredloansforparentsofdependentstudentsandstudentswhohavebeenunabletoacquireprivatestudentloanfunds.TheamountofaPLUSLoancannotexceedthecostofattendanceminusallothernancialaid. 28StudentLoanGuideFinancialAidPackageThetotalamountofnancialaidastudentisofferedbytheschool.Thisinformationwhichincludesgrantsscholarshipswork-studyandloansislistedinthecollegesnancialaidAwardLetter.FixedInterestRateOnaxedinterestrateloantheinterestrateremainsthesameforthelifeoftheloan.ForbearanceTemporarycessationofregularlyscheduledpaymentsortemporarilyper-mittingsmallerpaymentsthanwereoriginallyscheduled.Intereststillac-cruesandyouareresponsiblefortheaddedinterest.GracePeriodThesix-monthperiodthatbeginsthedayafteraDirectStaffordLoanbor-rowerceasestobeenrolledatleasthalf-timeataneligibleschool.Duringthegraceperiodpaymentsofprincipalarenotrequired.GraduatePLUSTheDirectGradPLUSloanisafederallyguaranteedcredit-basedloanavailabletoassistgraduateprofessionalstudentsinnancingtheireduca-tions.Theinterestrateisxedat7.9.Thereisa4originationandfeechargedoneachdisbursement.GraduatedRepaymentArepaymentschedulewherethemonthlypaymentsareloweratthestartoftherepaymentperiodandincreaseinpaymentlateron.InterestAnamountcalculatedasapercentoftheprincipalloanamountthatischargedforborrowedmoney.SeeFixedInterestandVariableInterestRates.Interest-BasedRepaymentWithaninterest-onlyrepaymentoptiontheborroweronlypaysinteresteachmonthforacertainamountoftime.Generallyaninterest-onlyre-paymenttermisineffectonlywhileastudentisinschoolatleasthalftime.Typicaleducationloansreverttoprincipalandinterestrepaymentonceastudentborrowerisnolongerenrolledinschoolortheenrollmentstatusfallsbelowhalftime.Theinterest-onlyrepaymentoptionaccruesmore StudentLoanGuide29interestoverthelifeoftheloanthanthetraditionalprincipalandinterestrepaymentoptions.InterestCapitalizationAdditionofunpaidinteresttotheprincipalbalanceofaloanwhichincreasesthetotaloutstandingbalancedue.Interest-OnlyPaymentApaymentthatcoversonlyaccruedinterestowedonaloanandnoneoftheprincipalbalance.Interest-onlypaymentsdonotprohibitborrowersfrommakingadditionalorlargerpaymentsatanytimeiftheborrowerdesires.LenderAnorganizationthatfundsprivateeducationloansforstudentsandpar-ents.LIBORLIBORistheinterestratethatbankschargeeachotherforone-monththree-monthsix-monthandone-yearloans.LIBORisanacronymforLondonInterBankOfferedRate.ThisrateisthatwhichischargedbyLondonbanksandisthenpublishedandusedasthebenchmarkforbankratesallovertheworld.Thisrateuctuatesbasedoneconomicconditionsandisusedtoguidebanksinsettingratesforadjustable-rateloansincludinginterest-onlymortgagescreditcarddebtandprivatestu-dentloans.Lenderstypicallyaddapointortwotocreateaprot.LIBORiscompiledbytheBritishBankersAssociationBBAandispublished11ameachdayinconjunctionwithReuters.Itiscomprisedofapanelofbanksrepresentingcountriesineachcurrency.LoanAtypeofnancialaidthatisavailabletostudentsandtheirparentsthatmustberepaidtothelender.Studentloanprogramshavevaryinginterestratesandrepaymentprovisions.LoanProceedsThemoneytheborrowerreceivesfromaloanortheamountborrowedminusfees. 30StudentLoanGuideMasterPromissoryNoteMPNAlegalcontractastudentborrowersignswhentakingoutafederalstu-dentloan.TheMasterPromissoryNotecoversboththeFederalStaffordSubsidizedandUnsubsidizedDirectLoansthestudentmayreceiveforthesameenrollmentperiod.OnenoteisrequiredforFederalloansob-tainedtocompletethedegreeatoneinstitution.OriginationFeeAnamountpayablebytheborroweranddeductedfromtheprincipalofaloanpriortodisbursementofthefundstotheborrower.Forprivateloanprogramstheoriginationfeeisgenerallypaidtotheoriginatortocoverthecostofadministeringandinsuringtheprogram.PrepaymentPaymentreceivedforaborroweraccountformorethantheamountdue.PrimeRateTheprimeinterestrateistheratechargedbycommercialnancialinsti-tutionsforshort-termloanstocorporationsorindividualswhosecreditstandingissohighthatlittlerisktothelenderisinvolvedinmakingtheloan.Thisrateuctuatesbasedoneconomicconditionsandmaybedif-ferentamongnancialinstitutions.Theprimerateservesasabasisfortheinterestrateschargedforotherhigher-riskloans.PrincipalAmountborrowedwhichmayincreaseasaresultofinterestcapitaliza-tionandtheamountonwhichinterestiscalculated.Alsoknownasprin-cipalbalance.PrivateLoansPrivateloansprovidesupplementalfundingwhenothernancialaiddoesnotcovercosts.Theseloansareofferedbybanksothernancialinstitu-tionsandschoolstoparentsandstudents.Dependingontherepaymentoptionselectedtherepaymentgenerallybegins30to60daysafterleav-ingschoolorgraduating.PromissoryNoteContractbetweenaborrowerandalenderthatincludesallthetermsandconditionsunderwhichtheborrowerpromisestorepaytheloan. StudentLoanGuide31RepaymentThetimeduringwhichaborroweractivelypaysbackaneducationloan.ServicerOrganizationthatadministersandcollectsloanpayments.Maybeeithertheloanholderoranagentactingonbehalfoftheholder.Thefederalgov-ernmentcontractswithmultipleentitiestoadministerandcollect.StandardRepaymentArepaymentschedulereectingequalmonthlypaymentsover10years.SubsidizedFederalDirectStaffordLoansSubsidizedDirectLoansareawardedtostudentswhodemonstratenan-cialneedi.e.need-basedloans.BecausetheU.S.DepartmentofEduca-tionsubsidizestheinterestborrowersarenotchargedinterestwhiletheyareenrolledinschoolatleasthalf-timeanddefermentperiods.Repaymentbegins6monthsafterleavingschoolorgraduating.TermAlengthoftimeinwhichtorepayaloan.Thetermisusuallyagreedtobythelenderandborrowerwithintheborrowerscontractorpromissorynote.Alsoreferstolanguageusedinlegaldocumentssuchasthepromissorynotethatdeneshowaloanwillbeborrowedandrepaid.SomepostsecondaryeducationalinstitutionsalsouseTermtorefertoanacademicperiod.UnsubsidizedFederalDirectStaffordLoansUnsubsidizedFederalLoansareavailabletostudentsregardlessof-nancialneedi.e.non-needbased.Borrowersareresponsiblefortheinterestthataccruesduringanyperiod.Repaymentbegins6monthsafterleavingschoolorgraduating.VariableInterestRateWithavariableinterestrateloantheinterestratechangesperiodically.ForexampletheinterestratemightbeaffectedbythecostofU.S.Trea-suryBillse.g.T-Billrateplus1.7andbeupdatedmonthlyquarterlysemi-annuallyorannually.WageGarnishmentIfyoudefaultonyourstudentloanmoneymaybewithheldfromyourpaycheckandpaidtoyourlenderonyourbehalf. 32StudentLoanGuide5000LoanAmountRequestedEstimatedMonthlyTERMSampleInterestRate10Year15YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay4.0050.606074.7036.956657.154.5051.806218.3038.206884.905.0053.046364.0139.507117.105.5054.256511.6040.907353.756.0055.506661.2542.207594.706.5056.796820.4743.607839.957.0058.056966.5044.958089.457.5059.347103.2246.358343.108.0060.657279.6547.758600.558.5062.057439.1749.158858.759.0063.357600.5550.559116.959.5064.687765.2051.959375.1510.0066.007929.6053.359633.3510.5067.458096.1054.759891.5511.0069.028264.3556.1510149.7511.5070.618432.9557.5510407.9512.0071.678609.2358.9510666.1512.5072.868783.5560.3510924.3513.0074.308944.2061.7511182.5513.5076.109063.8463.1511440.7514.0077.909183.4864.5511698.9514.5079.709303.1265.9511957.1515.0081.509422.7667.3512215.3515.5083.309542.4068.7512473.5516.0083.7510050.8070.1512731.7516.5085.3010238.5571.5512989.9517.0086.8510427.8572.9513248.1517.5088.5010618.7574.3513506.35 StudentLoanGuide33PaymentAmountTotalBalancetoRepayTERM20Year30YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay30.307272.0023.858593.4231.657596.0025.309120.3033.007920.0026.809662.7534.408256.0028.4010220.2035.808592.0030.0010791.9037.308952.0031.6511377.2038.759300.0033.2511975.4540.309672.0034.9512585.8541.8010032.0036.7013207.1043.4010416.0038.5013830.5045.0010800.0040.3014453.9046.6011184.0042.1015077.3048.2511580.0043.9015700.7053.3012792.0045.7016324.1051.6012384.0047.5016947.5053.3012792.0049.3017570.9055.0513212.0051.1018194.3056.8013632.0052.9018817.7058.6014064.0054.7019441.1060.3514484.0056.5020064.5062.2014928.0058.3020687.9064.0015360.0060.1021311.3065.8515804.0061.9021934.7067.7016248.0063.7022558.1069.5516692.0065.5023181.5071.4517148.0067.3023804.9073.3517604.0069.1024428.3075.2518060.0070.9025051.70 34StudentLoanGuide10000LoanAmountRequestedEstimatedMonthlyTERMSampleInterestRate10Year15YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay4.00101.2012149.4073.9013314.304.50103.6012436.6076.4013769.805.00106.0712728.0279.0014234.205.50108.4913023.2081.8014707.506.00111.0013322.5084.4015189.406.50113.5813640.9587.2015679.907.00116.1013933.0089.9016178.907.50118.6814206.4492.7016686.208.00121.3014599.3095.5017201.108.50124.1014878.3398.3017717.509.00126.7015201.10101.1018233.909.50129.3515530.40103.9018750.3010.00131.9915859.20106.7019266.7010.50134.9016192.20109.5019783.1011.00138.0416528.70112.3020299.5011.50141.2216865.90115.1020815.9012.00143.3417218.46117.9021332.3012.50145.7217567.10120.7021848.7013.00148.6017888.40123.5022365.1013.50152.2018127.68126.3022881.5014.00155.8018366.96129.1023397.9014.50159.4018606.24131.9023914.3015.00163.0018845.52134.7024430.7015.50166.6019084.80137.5024947.1016.00167.5020101.60140.3025463.5016.50170.6020477.10143.1025979.9017.00173.7020855.70145.9026496.3017.50177.0021237.50148.7027012.70 StudentLoanGuide35PaymentAmountTotalBalancetoRepayTERM20Year30YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay60.6014544.0047.7017186.9063.3015192.0050.6018240.6066.0015840.0053.6019325.5068.8016512.0056.8020440.4071.6017184.0060.0021583.8074.6017904.0063.3022754.4077.5018600.0066.5023950.9080.6019344.0069.9025171.7083.6020064.0073.4026414.2086.8020832.0077.0027661.0090.0021600.0080.6028907.8093.2022368.0084.2030154.6096.5023160.0087.8031401.40106.6025584.0091.4032648.20103.2024768.0095.0033895.00106.6025584.0098.6035141.80110.1026424.00102.2036388.60113.6027264.00105.8037635.40117.2028128.00109.4038882.20120.7028968.00113.0040129.00124.4029856.00116.6041375.80128.0030720.00120.2042622.60131.7031608.00123.8043869.40135.4032496.00127.4045116.20139.1033384.00131.0046363.00142.9034296.00134.6047609.80146.7035208.00138.2048856.60150.5036120.00141.8050103.40 36StudentLoanGuide20000LoanAmountRequestedEstimatedMonthlyTERMSampleInterestRate10Year15YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay4.00202.4024298.80147.8026628.604.50207.2024873.20152.8027539.605.00212.1425456.05158.0028468.405.50216.9826046.40163.6029415.006.00222.0026645.00168.8030378.806.50227.1727281.90174.4031359.807.00232.2027866.00179.8032357.807.50237.3528412.88185.4033372.408.00242.6029118.60191.0034402.208.50248.2029756.67196.6035435.009.00253.4030402.20202.2036467.809.50258.7031060.80207.8037500.6010.00263.9831718.40213.4038533.4010.50269.8032384.40219.0039566.2011.00276.0733057.40224.6040599.0011.50282.4333731.80230.2041631.8012.00286.6934436.92235.8042664.6012.50291.4335134.20241.4043697.4013.00297.2035776.80247.0044730.2013.50304.4036255.36252.6045763.0014.00311.6036733.92258.2046795.8014.50318.8037212.48263.8047828.6015.00326.0037691.04269.4048861.4015.50333.2038169.60275.0049894.2016.00335.0040203.20280.6050927.0016.50341.2040954.20286.2051959.8017.00347.4041711.40291.8052992.6017.50354.0042475.00297.4054025.40 StudentLoanGuide37PaymentAmountTotalBalancetoRepayTERM20Year30YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay121.2029088.0095.4034373.80126.6030384.00101.2036481.20132.0031680.00107.2038651.00137.6033024.00113.6040880.80143.2034368.00120.0043167.60149.2035808.00126.6045508.80155.0037200.00133.0047901.80161.2038688.00139.8050343.40167.2040128.00146.8052828.40173.6041664.00154.0055322.00180.0043200.00161.2057815.60186.4044736.00168.4060309.20193.0046320.00175.6062802.80213.2051168.00182.8065296.40206.4049536.00190.0067790.00213.2051168.00197.2070283.60220.2052848.00204.4072777.20227.2054528.00211.6075270.80234.4056256.00218.8077764.40241.4057936.00226.0080258.00248.8059712.00233.2082751.60256.0061440.00240.4085245.20263.4063216.00247.6087738.80270.8064992.00254.8090232.40278.2066768.00262.0092726.00285.8068592.00269.2095219.60293.4070416.00276.4097713.20301.0072240.00283.60100206.80 38StudentLoanGuide25000LoanAmountRequestedEstimatedMonthlyTERMSampleInterestRate10Year15YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay4.00253.0030373.50184.7533328.754.50259.0031091.50191.0034424.505.00265.1831820.06197.5035585.505.50271.2332558.00204.5036768.756.00277.5033306.25211.0037973.506.50283.9634102.37218.0039199.757.00290.2534832.50224.7540447.257.50296.6935516.10231.7541.715.508.00303.2536398.25238.7543002.758.50310.2537195.83245.7544293.759.00316.7538002.75252.7545584.759.50323.3838826.00259.7546875.7510.00329.9839648.00266.7548166.7510.50337.2540480.50273.7549457.7511.00345.0941321.75280.7550748.7511.50353.0442164.75287.7552039.7512.00358.3643046.15294.7553330.7512.50364.2943917.75301.7554621.7513.00371.5044721.00308.7555912.7513.50380.5045319.20315.7557203.7514.00389.5045917.40322.7558494.7514.50398.5046515.60329.7559785.7515.00407.5047113.80336.7561076.7515.50416.5047712.00343.7562367.7516.00418.7550254.00350.7563658.7516.50426.5051192.75357.7564949.7517.00434.2552139.25364.7566240.7517.50442.5053093.75371.7567531.75 StudentLoanGuide39PaymentAmountTotalBalancetoRepayTERM20Year30YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay151.5036360.00119.2542967.25158.2537980.00126.5045601.50165.0039600.00134.0048313.75172.0041280.00142.0051101.00179.0042960.00150.0053959.50186.5044760.00158.2556886.00193.7546500.00166.2559877.25201.5048360.00174.7562929.25209.0050160.00183.5066035.50217.0052080.00192.5069152.50225.0054000.00201.5072269.50233.0055920.00210.5075386.50241.2557900.00219.5078503.50266.5063960.00228.5081620.50258.0061920.00237.5084737.50266.5063960.00246.5087854.50275.2566060.00255.5090971.50284.0068160.00264.5094088.50293.0070320.00273.5097205.50301.7572420.00282.50100322.50311.0074640.00291.50103439.50320.0076800.00300.50106556.50329.2579020.00309.50109673.50338.5081240.00318.50112790.50347.7583460.00327.50115907.50357.2585740.00336.50119024.50366.7588020.00345.50122141.50376.2590300.00354.50125258.50 40StudentLoanGuide30000LoanAmountRequestedEstimatedMonthlyTERMSampleInterestRate10Year15YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay4.00303.6036448.20221.7039942.904.50310.8037309.80229.2041309.405.00318.2138184.07237.0042702.605.50325.4739069.60245.4044122.506.00333.0039967.50253.2045568.206.50340.7540922.85261.6047039.707.00348.3041799.00269.7048536.707.50356.0342619.32278.1050058.608.00363.9043677.90286.5051603.308.50372.3044635.00294.9053152.509.00380.1045603.30303.3054701.709.50388.0546591.20311.7056250.9010.00395.9747577.60320.1057800.1010.50404.7048576.60328.5059349.3011.00414.1149568.10336.9060898.5011.50423.6550597.70345.3062447.7012.00430.0351655.38353.7063996.9012.50437.1552701.30362.1065546.1013.00445.8053665.20370.5067095.3013.50456.6054383.04378.9068644.5014.00467.4055100.88387.3070193.7014.50478.2055818.72395.7071742.9015.00489.0056536.56404.1073292.1015.50499.8057254.40412.5074841.3016.00502.5060304.80420.9076390.5016.50511.8061431.30429.3077939.7017.00521.1062567.10437.7079488.9017.50531.0063712.50446.1081038.10 StudentLoanGuide41PaymentAmountTotalBalancetoRepayTERM20Year30YearMonthlyPaymentAmountTotaltoRepayMonthlyPaymentAmountTotaltoRepay181.8043632.00143.1051560.70189.9045576.00151.8054721.80198.0047520.00160.8057976.50206.4049536.00170.4061321.20214.8051552.00180.0064751.40223.8053712.00189.9068263.20232.5055800.00199.5071852.70241.8058032.00209.7075515.10250.8060192.00220.2079242.60260.4062496.00231.0082983.00270.0064800.00241.8086723.40279.6067104.00252.6090463.80289.5069480.00263.4094204.20319.8076752.00274.2097944.60309.6074304.00285.00101685.00319.8076752.00295.80105425.40330.3079272.00306.60109165.80340.8081792.00317.40112906.20351.6084384.00328.20116646.60362.1086904.00339.00120387.00373.2089568.00349.80124127.40384.0092160.00360.60127867.80395.1094824.00371.40131608.20406.2097488.00382.20135348.60417.30100152.00393.00139089.00428.70102888.00403.80142829.40440.10105624.00414.60146569.80451.50108360.00425.40150310.20 42StudentLoanGuideNOTES StudentLoanGuide43HelpfulWebSitesHESAA-HigherEducationStudentAssistanceAuthority609-584-4480MondaythroughThursday8a.m.-8p.m.Friday8a.m.-5p.m.Bilingualexpertsareavailabletoansweryourquestionswww.hesaa.orgTDDSystemfortheHearingImpaired609-588-2526MondaythroughFriday8a.m.-5p.m.U.S.DepartmentofEducationFederalStudentAidPrograms1-800-4-FED-AID1-800-433-3243TTY1-800-730-8913www.studentaid.ed.govCompletetheFAFSAOnlinewww.fafsa.govNJCollegesandUniversitieswww.njedge.netPrivateCareerSchoolAssociationofNJwww.pcsanj.comCollegePlanningandMoneyManagementwww.mappingyourfuture.orgFreeScholarshipSearcheswww.fastweb.comOnlineGuidetoFinancialAidwww.fnaid.orgNJCollegeCreditTransferInformationwww.njtransfer.orgConsumerProtectionFinancialAidandScholarshipFraudwww.ftc.gov 44StudentLoanGuideNewJerseyHigherEducationStudentAssistanceAuthority4QuakerbridgePlazaPOBox071TrentonNJ08625www.hesaa.orgPhone609-584-4480Monday-Thursday8a.m.to8p.m.Friday8a.m.to5p.m.HESAARevised41615