In response to questions about student loans and student loan refinancing, listed below are outside sources that can provide unbiased information.
Applying for a Student Loan
Finding Financial Aid
ASHA has information about financial aid and funding opportunities.
Federal Student Aid: An Office of the U.S. Department of Education
The U.S. Department of Education has a number of resources about student loans, loan forgiveness, and loan repayment.
Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau's website contains information on student loans and repaying your student debt, as well as a way to submit a student loan complaint.
Federal Reserve Bank Loan Calculator
This loan calculator can help you figure out the return on investment for your student loans.
Repaying Your Student Loan
Once you have graduated, the focus turns to repaying your student loans.
Federal Student Aid: How to Repay Your Loans
U.S. Department of Education website on how to managed federal student loan debt.
Consumer Financial Protection Bureau: Repay Student Debt
Information and advice on how to pay off student loans, whether federal, private, or both.
Loan Forgiveness
Some ASHA members might be eligible for student loan forgiveness. These links can help you determine if you are eligible and the requirements to maintain your eligibility:
Loan Refinancing
Another option to reduce your debt if you aren’t eligible for student loan forgiveness is student loan refinancing.
Federal Student Aid: Loan Consolidation
Loan consolidation is combining multiple loans into one loan for easier management and a possible cost savings.
FinAid: Loan Consolidation Calculator
FinAid was established in 1994 as a comprehensive source of student financial aid information, advice, and tools.
Consumer Financial Protection Bureau: Should I Refinance My Student Loan?
Blog post on refinancing federal student loan debt.
Co-signing a Student Loan
Some ASHA members might decide to help a family member with their student loans and decide to co-sign a loan. Here is information to keep in mind:
Consumer Financial Protection Bureau: Consumer Advisory
Blog post on surprise loan defaults and co-signer releases.
Advantage Credit Counseling Service: The Big Risks of Cosigning for Student Loans
Advantage is a non-profit that offers free credit counselling and education. It is rated A+ by the Better Business Bureau.
Student Loan Servicing Alliance
The Student Loan Servicing Alliance (SLSA) is the nonprofit trade association that focuses exclusively on student loan servicing issues. Our membership is responsible for servicing over 95% of all federal student loans and the vast majority of private loans, and our membership is a mix of companies, state agencies, non-profits and their service partners. Our servicer members and affiliate members provide the full range of student loan servicing operations, repayment support, customer service, payment processing, and claims processing for tens of millions of federal and private loan borrowers across the country.
SLSA’s work focuses on advocating for federal and state policy that improves loan servicing for all borrowers. We also serve as a forum for developing operational and technical best practices that enhance customer service and loan program administration. Further, we identify obstacles and opportunities within federal and private loan programs that can benefit from our expertise and leadership, and we formulate and support solutions that can achieve simplification and standardization. We also work with other advocacy organizations to support the continuing enhancement and streamlining of student loan servicing laws, regulations, and practices to benefit our customers, borrowers, and improve the value of higher education. In short, SLSA is the leading voice on how student loan servicing can work best to deliver improved success for borrowers and families
While SLSA itself does not service loans or work with borrowers directly, our membership directory can help direct you on how you can contact your servicer so they can work with you to manage your loans and learn about the options that are available to you.
Sample Agency Plan 1: Guidance On Student Loan Eligibility, Service And Repayment Options
Eligible Loans
The repayment authority, 5 U.S.C. 5379 as amended, is limited to student loans authorized by the Higher Education Act of 1965 and the Public Health Service Act. These are Federally insured loans made by educational institutions or banks and other private lenders.
The Higher Education Act covers guaranteed student loan programs such as:
Stafford Loans (subsidized, unsubsidized, Direct subsidized, and Direct unsubsidized);
Plus Loans (Federal and Direct Federal);
Federal Consolidation Loans (Direct subsidized and Direct unsubsidized);
Defense Loans (made before July 1, 1972);
National Direct Student Loans (made between 7/1/72 and 7/1/87); and
Perkins Loans.
Loans covered under the Public Health Service Act include the:
Nursing Student Loan Program loans;
Health Profession Student Loan Program loans; and
Health Education Assistance Loan Program loans.
Eligibility, Size of Payments, Service, and Repayment Options
Eligibility for payments The following options are intended to provide assistance in making determinations of eligibility that satisfy the requirement for fair and equitable treatment in the selection of repayment candidates. [Please note that, under the authorizing legislation and regulations, the need to maintain a balanced workforce in which women and members of racial and ethnic minority groups are represented must be taken into consideration in determining which candidates will be eligible. The spirit and intent of this requirement may be satisfied by directing recruitment information and activities toward events and locations that are most likely to produce candidates in the employment group(s) needed by the respective [AGENCY COMPONENT], even though the results of all recruitment efforts produce highly qualified candidates other than in the targeted employment group(s).] Limit eligibility to those occupations which are priorities as specified in an [AGENCY COMPONENT] staffing and diversity plan. Thus, a business case is made on a pro-active basis as to which occupations and candidates and/or employees will be eligible. Limit eligibility to those whose grade point averages (GPAs) meet the standard established by the [AGENCY COMPONENT] for both graduates and employees who are, or will be, enrolled in academic training while employed. Periods of service and loan repayment periods The next two payment options may require negotiations with the lender/note holder to adjust the existing payment schedule to conform to the dollar limits established under the Student Loan Repayment Program. They are intended to provide consistency in approach toward loan repayments. For example, in determining periods of service, the [AGENCY COMPONENT] may follow the current practice of service for [AGENCY]-paid training/education, which is to require service based on a ratio of 1:3, e.g., 3 months of service for a 1-month class. Set the minimum period of service at 3 years for all candidates and then determine the loan payment period. Convert the loan amount to years. The loan payment period is the same as the period of service, which is determined by dividing the annual school cost into the loan balance. Example 1 - total loan is $20,000; total cost for 4-year bachelors degree is $40,000; outstanding loan represents 2 years of total school cost; years of service is determined by multiplying 2 years of costs x 3 years of service per each year of payments = 6 years of service; loan is payable over 6 years at $3,333/yr. Example 2 - total loan is $42,000 for an advanced degree; annual cost for 2 years is $21,000; outstanding loan represents the total 2 year cost; years of service is determined by multiplying 2 x 3 = 6; loan is paid over 6 years = $7,000/yr; therefore, the total amount that [AGENCY] would pay is 6 x $7,000 = $42,000. The loan payment period is determined by dividing the maximum annual payment into the loan balance; the period of service is determined by multiplying the loan payment period by 3. Example 1 - total loan is $20,000; $20,000 / $10,000 = 2 years of allowable payments, loan is payable over 2 years at $10,000 per year; 2 years of [AGENCY] payments x 3 years of service for each year of payments = 6 years of service. Example 2 - total loan is $42,000 for an advanced degree; the maximum annual amount that may be paid by [AGENCY] is $10,000; therefore, the number of years of payments of $10,000 = 4.2 years; assuming that 3 years of service would be required for each year of student loan benefit payments, the related service requirement would be 4.2 years x 3 years = 12.6 years of service. The loan payment period is determined by dividing the outstanding balance by the number of years to attain the degree; the period of service is determined by multiplying the loan payment period by 3. Example 1 - total loan is $20,000 for a 4-year bachelors degree (which took 4 years to get); the loan payments are $5,000 per year ($20,000 / 4) for 4 years; years of service: 4 years of loan payments x 3 for each year of payment = 12; Example 2 - total loan is $42,000 for a 2-year advance degree (which took 3 years to get); the loan payments are $10,000 per year, which is the maximum allowable per year, for 3 years, for a total of $30,000; years of service: 3 years of loan payments x 3 for each year of payment = 9.
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Payment Schedules
Lump-Sum Net Payments This occurs when the employee elects, and the lender/note holder agrees, to have one loan payment made each calendar year. The total amount of taxes is first deducted from the gross loan amount and a net payment is made annually to the lender/note holder. The flat rate of 28% will be used to determine the amount of Federal income taxes to be withheld from the gross loan payment amount; social security, Medicare, and State and local income taxes are then determined and withheld based on the gross amount authorized as supplemental wages. Example - Gross amount of annual payment - $10,000; approximately $3,000 is withheld and reported on the employee's W-2; a net payment of approximately $7,000 is made to the lender/note holder. Biweekly Payroll Payments This occurs when the employee elects, and the lender/note holder agrees, to biweekly payments of a set amount. For this option, the amount of the loan payment is added to the gross salary amount to increase the total salary for that pay period; taxes are calculated and withheld based on the total salary to determine the employee's net pay. The total payment amounts may vary from year to year because each calendar year does not always have 26 pay periods; the total amount will probably be less the first calendar year and is dependent on the employee's entry on duty date. Thus, the biweekly amount may need to be adjusted each year so that the maximum allowable per calendar year is not exceeded. Example - Annual amount of payments - $5,200; employee's biweekly gross pay during the loan repayment period would be increased by $200; $200 would be paid to the lender/note holder each pay period (assuming 26 payments in any calendar year) resulting in a reduction in the employee's net pay of approximately $65 due to the taxes on the loan repayment amount.
Processing Payments
An employee may use [FORM NUMBER] for providing payment information in lieu of providing information on the employee, lender/note holder, and loan account separately. A separate [FORM NUMBER] is required for each loan. For lump-sum payments, the [FORM NUMBER] must clearly indicate that it is for a one-time payment with the amount indicated as "NET loan repayment." For biweekly payroll deductions, no further action is needed, as the payment will remain in effect until the end of the agreement period or, as a result of the annual recertification process (see the next section), notice is provided to the payroll office that the payment should be changed or stopped. Payments will automatically stop when the total authorized amount has been paid each year. If [FORM NUMBER] is used, it should be attached to the payroll copy of the service agreement.
Annual Recertifications
This process should be similar to recertifications of retention allowances, in which the servicing human resources staff "suspenses" the effective date of the service agreement and follows up with the appropriate management official; the management official provides a statement that funds are still available for the entire calendar year and that each loan has been reviewed to ascertain whether or not it is in arrears or default. If the amount of the allotment(s) will not change, then a statement to that effect must be provided to the payroll office. If the amount of the loan repayment(s) will be different from the prior year, the new information must be provided. If the loan(s) is in arrears or default, then the management official must determine the appropriate course of action and inform the employee and the servicing human resources staff. If payments will be terminated, then the [AGENCY COMPONENT] must inform the employee, the payroll office, and the lender/note holder.
Interest Deductions
Employees may be able to deduct the interest on their student loans even though the interest is included in the total loan amount and paid by the agency. Employees should review Chapter 3 of the Internal Revenue Service Publication 970, which is available at www.irs.gov/pub/irs-pdf/p970.pdf.
References
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Sample Agency Plan 2
Purpose
This instruction provides policy and guidance for implementing the Student Loan Repayment Program. This program is intended to facilitate the recruitment and retention of highly-qualified employees by allowing agencies to repay part or all of their Federally insured student loans.
References
Title 5, U.S. Code, Section 5379
Title 5, Code of Federal Regulations, Part 537
Definitions
Student Loan: A loan made, insured, or guaranteed under parts B, D, or E of Title IV of the Higher Education Act of 1965; or a health education assistance loan made or insured under Part A of Title VII of the Public Health Service Act, or under Part E of Title VIII of that Act.
Loans covered under The Higher Education Act include such loans as:
Federal Stafford Loans -- including Federal subsidized, Federal unsubsidized, direct subsidized, and direct unsubsidized loans;
Federal Plus Loans -- Federal and Direct Plus Loans;
Federal Consolidation Loans -- direct subsidized, direct unsubsidized, and Federal Consolidation Loans;
Defense Loans -- made before July 1, 1972;
National Direct Student Loans -- made between 7/1/72 and 7/1/87;
Federal Perkins Loans.
Loans covered under the Public Health Service Act include loans made under:
The Nursing Student Loan Program;
The Health Profession Student Loan Program; and
The Health Education Assistance Loan Program.
Federal Direct Student Loan: The U. S. Department of Education is the lender for these loans. Direct loans include Federal Direct PLUS loans and Federal Direct Stafford loans.
Federal Family Education Loan Program: These loans are insured by the Department of Education. Loans are privately issued by a bank, credit union, or other lender that participates in the Federal Family Education Loan Programs.
Subsidized Loan: The U.S. Government pays the interest on the loan while the student is in school, during the 6-month grace period, and during periods of authorized deferment.
Unsubsidized Loan: The student is responsible for paying the interest accrued while the student is in school, during the 6-month grace period, and during authorized periods of deferment.
Coverage
The following are eligible for student loan repayment assistance:
Permanent employees;
Employees serving a term appointment with at least 3 years remaining on their appointment;
Employees serving in excepted appointments with non-competitive conversion to term, career, or career-conditional appointments (e.g., Presidential Management Interns, VRAs, and career interns);
Temporary employees under 5 CFR 315.704 who are serving on appointments leading to conversion to term or permanent appointments.
NOTE: Employees receiving a physicians' comparability allowance (PCA) under 5 CFR 595.105(e) are eligible. However, the amount of their PCA must be reduced by an amount equal to any loan repayment assistance received under this program.
Employees serving in confidential, policy determining, policymaking, or policy advocating positions (e.g., Schedule C employees) are not eligible.
Criteria for Payment:
Eligible employees may be considered for loan repayment assistance up to $10,000 per calendar year, with a $60,000 lifetime maximum for any individual. More than one loan may be repaid so long as the combined repayments do not exceed these limits. Assistance may be provided for both recruitment and retention purposes. Recommendations will normally be made by the immediate supervisor, and approval will be at the discretion of the next higher level.
Recruitment
Loan repayment may be authorized upon determination that, in the absence of loan repayment benefits, the agency would have difficulty filling a position with a highly qualified candidate. Evidence of need may be based on:
The success of recent efforts to recruit suitable candidates for similar positions, including such indicators as offer acceptance rates, the proportion of positions filled, and the length of time required to fill positions;
Recent turnover in the same or similar positions;
Labor market factors that affect the ability to recruit for similar positions;
Any special qualifications needed.
This determination must be in writing and must document the criteria used to determine the amount of loan repayment benefits. Managers may consider the following criteria in deciding the amount:
The severity of the recruiting problem;
Salary levels reported in published salary surveys for comparable non-Federal positions;
The importance/criticality of the position to be filled and the effect on the agency if it is not filled or if there is a delay in filling it;
Current salary of the candidate;
Salary documented in a competing job offer;
The disparity in cost of living between the candidate's current residence and the proposed duty station;
The projected cost of further recruitment effort if the candidate does not accept the position;
The extent of the individual's past training and experience that serves to qualify him/her for the position;
Budget availability.
Each determination for recruitment purposes and the amount to be paid must be made before the employee enters on duty.
Retention
Loan repayment may be authorized upon determination that, in the absence of loan repayment benefits, the agency would have difficulty retaining a highly qualified employee. Evidence of need may be based on--
The unique or high qualifications of the employee or the special need for the employee's services that makes it essential to retain him/her;
The likelihood the employee would leave for employment outside the Federal service if he/she does not receive loan repayment benefits;
The extent to which the employee's departure would affect the agency's ability to carry out an activity or perform a function that is deemed essential to the Agency's mission.
This determination must be in writing and must document the criteria used to determine the amount of the loan repayment benefit. Managers may consider the following criteria in deciding the amount:
Salary levels reported in published salary surveys for comparable non-Federal positions;
Salary documented in a competing job offer;
The importance/criticality of the position and the effect on the agency if the employee were to leave;
The projected cost of recruitment and training associated with replacement of the employee;
The length of service of the employee with the [agency];
Budget availability.
Termination of Benefits
An employee receiving loan repayment benefits will be ineligible for continued benefits if he/she--
Separates from the agency for any reason;
Fails to maintain a fully satisfactory level of performance; or
Violates any of the conditions of the service agreement.
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Service Agreement
Before any loan repayment may be made, the employee must sign a written agreement to serve a minimum of 3 years with the employing agency, regardless of the amount of repayment authorized. This 3-year period will begin when the first payment is made to the holder of the loan. Any further repayment made after the initial agreement has been completed will extend the service agreement by 1 additional year for each additional payment made. A model service agreement is at attachment 1.
The agreement may specify employment conditions considered appropriate, such as, but not limited to, the employee's position and the duties he/she is expected to perform, work schedule, or level of performance. However, the service agreement in no way constitutes a right, promise, or entitlement to continued employment or noncompetitive conversion to the competitive service, nor does it limit management's right to take corrective or disciplinary actions as otherwise appropriate.
Failure to Complete a Service Agreement
An employee who, voluntarily or because of performance or misconduct, fails to complete the agreed-upon period of service must refund the full amount of benefits received during the initial 3-year period. Employees who fail to complete the period of service under a 1-year extension (e.g., 4th year, 5th year), must repay the amount of the benefits received in the extension year only. If an employee fails to reimburse the agency, the amount outstanding will be recovered from the employee under established debt collection procedures.
Waiver of Repayment
Repayment may be wholly or partially waived at the discretion of the [agency] if recovery would not be in the public interest or would be against equity and good conscience. In making this determination, the [agency] will take into account consistency, fairness, and the cost to the taxpayer of recovering monies owed to the government. A waiver may be considered, but is not automatic, when an employee accepts a position in another operating division of the [agency].
When an employee is separated by death or disability retirement, or is unable to continuing working because of disability evidenced by acceptable medical documentation, repayment is automatically waived.
Procedures for Making Loan Repayments
Payments will be made directly to the lending institution holding the loan on behalf of the employee. One payment will be made each year for the duration of the service agreement. Payments may be applied only to indebtedness outstanding at the time the agreement is signed, and no payment may be made before an employee enters on duty.
Loan repayment benefits made under this authority are in addition to basic pay. These benefits are subject to Federal income tax, FICA and Medicare withholding, and any State or local income tax that may be applicable. Tax withholdings will be deducted at the time payment is made.
Responsibilities
Employing offices will–
comply with merit system principles when selecting employees to receive loan repayment benefits and consider the need to maintain a balanced and diverse workforce;
ensure that their responsibilities under labor relations statutes and union agreements are fulfilled;
verify that a student loan is Federally insured and eligible to be repaid under this program (see Attachment 2);
verify the current loan balance at time of entrance on duty and any subsequent extensions of the service agreement (see Attachment 2);
reach agreement with the holder on terms of payment;
prepare the written justification for the loan and maintain case files (see Attachment 3); and
provide information needed to process the reimbursement request to the Program Support Office, Division of Payroll (see Attachment 4).
Servicing Personnel Offices will–
develop and disseminate policies governing the use of the loan repayment program and provide technical guidance to employing offices concerning its administration;
maintain a record of each determination made under this authority and retain the record for 3 years (files may be destroyed after 3 years); and
report annually to the Office of Human Resources the number of employees receiving benefits under this authority, their job classifications, and the amount of benefits.
Employees will–
be responsible for making loan payments on the portion of the loan that continues to be their responsibility;
be responsible for any income tax obligation resulting from the loan repayment benefit.
References
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