Managing Student Loans

Managing Student Loans


– Welcome to the webinar for VISTAS on managing student loans. Thanks so much to
everyone who’s joining us, and looking through the
chat it seems like we have a wide range of
participants with us today. Some of you are even into your second year as a VISTA member or
leader, so thank you so much for continuing to do service with us. Others of you have been
here for 11 months, so you’re almost wrapping up your service. And some of you have been here for only two to three months, maybe four. What you’ll find today is
that all of you will be able to benefit from the
information in this webinar because student loans can
be daunting to navigate. As a VISTA member, you
have many options available for managing student loans
both during and after service. This session outlines
several options to postpone, repay, and reduce your
federal loan payments. We’ll also discuss programs
unique to federal service that could eliminate your
loan balances altogether. And a quick note. While we do discuss the Education Award during this webinar, for those
of you who want more tips regarding the ed award specifically, we have another webinar
coming up focused solely on the Education Award in January. Again, I’m Molly Pelzer,
training coordinator for AmeriCorps VISTA,
and I’ll be your host. I’m joined today by Jessica
Knight and Endi Clark from Education Northwest. Together, we’ll be
providing online support during the presentation, and also facilitating your questions. Now it’s my pleasure to
introduce today’s prenters, presenters, excuse me, from
the VISTA member Support Unit who will be presenting
about student loans. ShaVonne is a native of Dallas, Texas and is an AmeriCorps VISTA alumna. She serves as an AmeriCorps VISTA member in Arlington, Texas, and ShaVonne joined the VMSU staff in 2013. Calvin is from Waco, Texas. He served two terms of AmeriCorps NCCC as a field team leader and
later as a support team leader on projects throughout
the Midwest and Northeast regions of the U.S. Since wrapping up his NCCC service, Calvin has worked for CNCS,
first at NCCC headquarters, and currently with the VMSU. We are also joined by
Taryn, who will be sharing some information about taxes. Taryn served with
AmeriCorps NCCC in class 10, the Sacramento Pacific
region, and class 11, the D.C. capital region, as well as with AmeriCorps VISTA in Boston. She is currently a program officer in the Pennsylvania State Office. Now I am going to turn
things over to ShaVonne. ShaVonne, welcome to the webinar. – Thanks, Molly. I just wanted to say it’s great to be able to have this webinar today. As a former VISTA member,
I can definitely attest that the information
that will be shared today would definitely guide our VISTAs and alums on the right path
to manage your student loans. To start off, we’re gonna
start off by looking at the most common type of student loans. Then we will explore
some specific programs to help members eliminate
their student loans long-term. At the end of the
presentation, we will open up the conversation and take
questions during the Q&A. So, let’s go ahead and jump right in. As a VISTA, there are
three important factors to consider when thinking
about student loans. First, the types of loans you will have will impact the programs
that you’re eligible for. Second, your decision to select
either the Education Award or the stipend will impact some of your loan repayment options. Third, your future career plans
will impact the possibility of having your loan
balance forgiven long term. During the presentation, we will address all of these factors. To start out, we’d love to know what type of student loans you all have. Please look on the right
side of your screen and you’ll see a poll pop up. Please take a moment to share with us what type of student loans you have if you know what they are. The loan options include
federal direct loans, Federal Perkins loans, private loans, both federal and private, I don’t know, and I don’t have any loans for those people who are wonderful. (laugh) So please, go ahead and take a second to look at that and fill that out. – [Molly] Yep. And even though it gives you a time limit of about five minutes, the sooner you guys get your answers in, the better because then we’ll be able to
take a look at what types of loans you have, or maybe don’t have. And then we’ll be able to
continue with the presentation. So, we’ll give you just
another couple minutes and as ShaVonne mentioned,
your options are federal direct loans
which includes subsidized, unsubsidized or plus; as well
as Federal Perkins loans, private loans, both federal
and private, I don’t know, and then the lucky I don’t have any loans. So the poll has ended and
we will give just a minute for those results to pop up, and then we will talk through them. Just one more second, and there we go. So it looks like, ShaVonne,
the majority of people in the webinar today, 83 of
you have federal direct loans. The next most popular category is both federal and private loans. Now, we have a few people that don’t know and we have a few people that
have Federal Perkins loans, private loans, and a couple
that don’t have any loans. Great. So we are gonna touch
on all of these topics for the most part, right ShaVonne? – [ShaVonne] Oh, yes. – [Molly] Excellent. – [ShaVonne] Thanks, Molly. Alright, so many of
the programs we will be talking about today will only apply to specific types of loans. So it’s important to know which types of loans that you have. Let’s start off by clarifying
some key differences between student loan categories. Broadly, we will be talking about either federal or private loans. In the case of all federal
loans, funds are borrowed from the federal government,
and the most basic difference lies in who administers and
distributes those funds. For federal direct loan
programs, the lender is directly the U.S. Department of Education. Within this category of federal loans, there are several different
programs as you can see in the first column, including subsidized, unsubsidized, and parent PLUS. With Federal Perkins loans, the lender is actually the school itself. While the government still
provides and backs those funds, it is the schools and
universities that administer the loan funds to the student. Finally, private loans are
those borrowed and administered through private lending institutions. Some of these include loans from Discover, Sallie Mae, or loans administered
by a bank or credit union. Throughout this presentation,
please be mindful which loans are eligible
for a given program. Now, let’s talk about the options for postponing student
loans during service. To start, we’d love to
know how many of you have already put your loans
into forbearance or deferment. Please take the time to answer the poll. Question located on the right
side of your screen again. We definitely appreciate
everyone’s participation in completing this poll,
and we’re looking forward to reviewing and discussing the results. So we’d just like for
you to take a few seconds and submit your answer
so we can get an idea of whether your loans are
in forbearance or deferment. – [Molly] And I saw in the
chat, Shavonne, earlier that some folks have already started talking about forbearance. I know we have some questions
already about forbearance. I know that will be a popular option. But forbearance, deferment,
no, I don’t know, or I don’t have any
student loans currently. So again, we’ll touch
on all of these topics. And just a couple more seconds
and then our poll will close and we’ll be able to get
a pulse on what we have for our status for most of you. So it looks like responses
should be coming in in just a minute. And as soon as those pop
up, we’ll review them. And let’s see. Alright, so ShaVonne it looks
like we have quite a few who have already put their
loans into forbearance. Quite a few haven’t taken any action yet, so I think it’s great that they’re with us on the webinar today
and we can talk through what they should do. A number of folks have already
worked on their deferment, and some don’t know. One person doesn’t currently
have any student loans. And then we also have some who
unfortunately didn’t answer, but we’ll be able to work through all of those options today. – [ShaVonne] Awesome. Alright, thanks Molly for helping me out. Alright, for those of you who
selected the Education Award as your end of service benefit, you can put your federal student loans into a state of forbearance
with the National Service Trust so that you don’t have
to make loan payments while you’re serving as a VISTA. I’m gonna refer to this as
national service forbearance. Most federally-backed
student loans qualify for national service loan forbearance. For example, federal direct loans and direct consolidation
loans can be placed in national service forbearance. However, there are two exceptions to this. Parent PLUS loans and
Federal Perkins loans are not eligible for
national service forbearance. Private student loans also do not qualify for national service forbearance. Similarly, if you chose a stipend as your end of service benefit instead of the Education Award, you are also not eligible for forbearance. In both cases, you will want
to explore loan deferment. And we will talk about this
in the next few slides. The most immediate benefit
of having your loans in forbearance is that you don’t have to make loan payments. However, even in forbearance
your federal loans will continue to accrue interest. So another great benefit of
national service forbearance is that once you complete
your entire year of service, you can ask CNCS, which is the corporation for national community service, to pay off the accrued interest. There are a few things to know about the interest accrual payments. First off, it does not
happen automatically. You will need to submit a request on the My AmeriCorps website to have the interest paid for you. The interest accrual payment
is an additional benefit to the Education Award. This payment does not come
out of your ed award balance. The interest accrual payment
is considered taxable income, so you will need to report
it as such and be prepared to pay the tax on the payments. But we’ll come back to
tax implications in a bit. Forbearance does have its limits, so let’s review a few things
you will want to keep in mind. National service forbearance
is only an option if you chose the Education Award. Forbearance and interest
accrual payment are contingent upon successful completion
of your term of service. If you end service early
you will not only forfeit the Education Award,
but also the forbearance and interest accrual payments. This means you will owe
your lender for any interest that accumulated during
your forbearance period. VISTA members who extend their service are not eligible to
receive an Education Award during the extension period. During an extension, you are only eligible for the end of service cash stipend. Since the Education Award
option is not available, requesting forbearance for existing loans and interest accrual are not available. Let’s say you get to
the end of your service and you decide to stay
on for three more months to wrap up your project. For those three months,
you’re only eligible to receive the end of service stipend which accrues at $125 a month. Once you enter this extension period, you are no longer in a period of national service forbearance,
and your lender may begin to request repayment. Please remember forbearance
is not guaranteed. If you have not already done so and would like to put your
federal loans into forbearance, you can find the request form on your My AmeriCorps account shown here. When filling out the
request form, if your lender is not listed, click on
institution knock downs and follow the directions. You should expect to see in your account if your request was
accepted by your lender within three to five business days. Now while we’re on this
topic, this is also where you will request to have the
interest that accrued during that forbearance paid off after your service is complete. Typically, the interest
accrual payment will also take three to five
business days to process. Make sure you follow the
process and timeline carefully so as to avoid fees or late payments. A request forbearance can be
made the old-fashioned way through paper, but please be advised that it will take significantly
longer to process. If for whatever reason you would like to fill out a paper request, please call the National Service Hotline directly and they can guide you
through the process. Now let’s take a moment to
talk through a scenario. As we’ve mentioned, you can
only put loans in forbearance if you’ve selected the Education Award. However, as a VISTA you can earn only up to two Education
Awards in your lifetime. So let’s say that you love VISTA so much you wanna serve a third term. What are your options? If you opt for the cash
stipend, which is shown in the first column,
you would receive $1,500 at the end of service. But you wouldn’t be able to
put your loans into forbearance with the National Service Trust. And you wouldn’t be able to request to have the interest paid off. You may be able to put your loans into deferment with your
lender, but you’d still have more interest accumulating. Your other option is to opt for “Zero” value Education Award. This means you wouldn’t receive
the education award funds, but you would be able to keep
your loans in forbearance with the National Service Trust, and have the interest paid
off at the end of your term. The important thing to
consider in this situation is whether having your loan
interest for the year paid off by the National Service
Trust, would that be worth more than a $1,500 end of service stipend? If so, the “Zero” value Education Award might save you more than the cash stipend. For those of you with
private student loans or for those who select the cash stipend who don’t qualify for
national service forbearance, there is an option you
can explore as well. It’s generally known as loan deferment. Deferment differs from
forbearance in a few ways. First, you can request deferment
directly from your lender. Different lenders may use
various names for this, so you might need to
explore with them first. Basically, you want to
request that they temporarily defer your payment due
to economic hardship created by your low income
during your year of service. Secondly, not all lenders
offer loan deferment. And if you find that your lender doesn’t, you’ll want to explore options to lower your monthly payments. The third difference between
loan deferment and forbearance is that deferment may not offer an option to pay off the interest that accrues while the loan is in deferment. For federally subsidized loans,
accrued interest may be paid by the Department of Education
if the loan is deferred. Check with your lender for
specifics, and remember like forbearance, deferment
is not guaranteed. Now let’s transition to loan repayment. Once you’re no longer able
to postpone your loans during service, there are several options to repay and reduce your payments. Right now we’re gonna talk
about these options separately, and then later on in the
presentation we’re gonna go ahead and talk about ways you can
combine some of these options to get the most out of your benefits. Loan consolidation is a
process that allows you to combine one or more
federal student loans into one new loan. As a result of consolidation,
you will have to make only one payment each month
on all your federal loans. And the amount of time you have to repay your loan could be extended. Some benefits of loan
consolidation include: lower monthly payments,
centralized payments, potential for better interest rates, and access to alternative repayment plans. You can apply for a
direct consolidation loan through studentloans.gov. The process also offers both
electronic and paper options. Private education loans are not eligible for federal direct consolidation. Since most private education
loans do not compete on price, a private consolidation loan
is merely replacing one or more private education loans with another. The main benefit of consolidation is obtaining a single monthly payment. Since consolidation resets
the term of the loan, this may reduce the monthly payment; at a cost, of course, which may increase the total interest paid over
the lifetime of the loan. For more information on
private loan consolidation, visit the link we’ve
placed in the chat window. For those who have federal direct loans, you may want to consider some of the income-driven repayment options that are available through the government. Essentially, an
income-driven repayment plan adjusts your monthly loan payments as a fixed percentage of
your income and family size. To qualify for an
income-driven repayment plan you need to have some degree
of financial hardship, meaning the balance on your loans needs to represent a significant
portion of your annual income. Basically, they want to
make sure that payments are about 10-20% of your annual income which would be less than
a standard repayment plan. You can enroll in an
income-driven plan at any time and you payment will only
go up once your income… If you enroll right now
while you’re in service, the payments under an
income-driven plan could be as low as $0 or $5 since
VISTAS live at poverty level. The upside to an income-driven plan is that your monthly payments are lower. Costs are much lower. Another benefit is that these
payments plans are set up to forgive the balance of your loan after 20-25 years,
depending on which program you are eligible for. However, remember one limit to be aware of is that if you stretch out the time over which you are gonna repay the loan, more interest will accrue
and you might end up paying back more in the
interest in the long run. There are three income-driven
repayment plans offered through federal student aid. First you have the
income-based repayment plan, which is known as IBR, pay as you earn repayment plan, and income contingent repayment plan, which is also known as ICR. The differences between
the plans lie in the year in which you took out your student loans, as well as your annual
income and household size. There is a detailed chart
found on StudentLoans.gov and we will drop a link in
the chat box for you to see. To apply, you must submit
an application called the income-driven repayment plan request. You can submit this application
online at StudentLoans.gov or on a paper form which you can obtain from your loan servicer. If you select with the Education Award, once your year of service is complete, you can begin using your Education Award to make payments on any
federal student loans. You start the process of
using your Education Award through the My AmeriCorps.gov portal. Once you have completed
your term of service, you will be able to access
a link from your home screen to create an Education
Award payment request. You will have access to a form where you will enter the payment
type, the amount authorized, and then the institution where
the payment will be directed. When you click on submit,
a notice will be sent electronically to your
educational or loan institution. A record of your request will appear in your account home page. The school of the loan
holder will complete their portion of the form and return it electronically to CNCS. They will fill in the amount
for which you’re eligible if the request is for
current educational expenses, or they will provide the
payoff amount and the loan type if the request is for student loans. Once you initiate this request, a payment generally takes place within 48 hours. Note, this process can not be automated. So you will have to create a request for each payment that you wish to make. If for some reason the institution denies your request for payment, they
should have entered comments or an explanation for
the reason of the denial. Any time you use the Education Award, you will need to remember
that it will be taxed. So now we’re gonna go ahead and pause and check in about tax liability. Molly, can you start us off? – [Molly] Great, thank
you so much, ShaVonne. So, our next topic is usually one that raises a lot of questions: taxes. As you all know, the Education Award and any interest payments
made on your behalf during your service is all
considered taxable income. And I’m really sorry that
I might be the bearer of this frustrating
news, but unfortunately that’s just the way the system works. So, we’re here to help guide
you to make good decisions as you use your Education Award. So as we move through this
next section of the webinar, please remember that we’re
approaching the topic of taxes as it specifically
relates to your Ed Award and we won’t be able to address questions about taxes in general. Our next speaker, Taryn, is an expert on the topic of taxes and
also in VISTA service. Remember that Taryn served both as a VISTA and an NCCC member. She currently works at the
Pennsylvania State Office as a program member and
volunteers a lot in her free time. So, Taryn, welcome to the webinar. What can you tell us about taxes? – [Taryn] Thanks, Molly. Hi, everyone. I’m happy to be a part of this call today to talk about everyone’s
favorite topic, taxes. But having used both
of my Education Awards to pay off some student
loans along with helping to prepare taxes as a VITA volunteer, I think that this information
is important to understand as well as to be better-prepared to use your Education Award, and
to pay the pertinent taxes. The first big piece of
information to take away is that any use of the Education Award is considered income that is taxable. You will be taxed on the
amount that it was used for the tax year that it was used. This does mean so that if a year goes by and you do not use any
of your Education Award, you will not have to pay taxes on it. Your Education Award is
only taxed as you use it. In a given year, if
you use less than $600, you will need to report
it on your tax return. If you use more than $600,
a 1099-MISC form posts to your My AmeriCorps account
by January 31st each year for you to include with your tax return. As ShaVonne mentioned earlier,
interest accrual payments are also considered taxable
income and will need to be reported during the year
you receive those payments. If your interest accrual
payments were over $600, you should expect to have a 1099-MISC form that is automatically generated. Let’s pause for a moment
and consider tax liability. VISTAs tend to have a lot of
questions about tax liability. We understand that folks
would like a specific estimate for their tax liability when
using the Education Award, so we’d like to clarify
why it’s not possible to give a standard, universal estimate. This is because your tax liability depends on several personal and
situational factors. What we can show you is a
list of those primary factors that impact tax liability so
you can make your own estimate. As a general rule, your tax
liability will always be tied to your income during a given year. The Education Award is considered income, so when you use it it will be added to whatever your annual
income is for that year. For a given year, they use all or part of your Education Award. What you owe in taxes will be dependent on the five factors listed here. Your total annual income, plus the amount of Education Award you
use, along with tax credits and deductions based on your
own personal circumstances gets you to your total taxable income. That total taxable amount then gets taxed at the federal tax rate and then taxed at the state tax rate of where
you earned the income in. These are just the most basic factors, but as you can see, there are many unknown variables going on. Let’s take a look at
how this might play out in some hypothetical examples. Let’s start with a few scenarios
for a hypothetical VISTA who’s just finished service in 2014. And let’s say this VISTA had
$10,000 of income in 2014. And for 2014 in one
version of the scenario, they use a part of their
Education Award, or $500. And then in the other
version in the second column, they use the entire award, $5,730. In both cases, they have about $8,000 in credits and deductions. But as you can see, the added income from using the entire
Education Award increases the overall taxable income. Even though the taxable
income has increased, the member still at the
10% federal tax rate. Again, a VISTA using his or her Ed Award directly after service could
have a similar situation in that the annual income is
low; in this case $10,000. And using a portion of the Ed Award vs. using all of the Ed Award
results in being taxed in the lower tax bracket. Let’s take a look at what
could happen a few years later. In another scenario to
consider, they had spent a few years after service. And this VISTA is now
making $40,000 at a job where they are still paying
taxes throughout the year. They then decide to use
their entire Education Award that year for the full
$5,730, which is added to their taxable income for that year. The total income is now $45,730 and after subtracting credits
and deductions from that, you can see that the
taxable income of $37,730 has brought the VISTA
into a higher tax bracket. So, more taxes to pay. It depends on your own personal situation to decide when you want to
use the Education Award. Having lower income vs. higher income and using part of the Education Award, or using the full amount. As you can see, taxes are
complicated and very personal. One way to estimate your own tax liability is to download a recent 1040 form and estimate filling it out
with the most recent tax rates in your own estimated
information for the coming year. When making a decision about
using your Education Award, we suggest you first test this out to plan for your tax liability. The 1040 form comes with instructions and the irs.gov website also has resources to get you started. I’m talking about resources. Here’s the slide on resources. When it comes time to
filling out your tax return, there are lots of different
programs available online and in person that can help. For those with an income
less than $53,000, you can receive free, in-person tax prep through VITA: Volunteer
Income Tax Assistance. I personally have been a
VITA volunteer for 10 years and I highly encourage
VISTAs to look it up and to use VITA in your area. Often the organizations
that run VITA tax prep sites also can assist you with resource sharing and making sure your tax
questions get answered. If you don’t have any
questions but want a quick and efficient way to file your taxes, freefile is a great
online option to consider. Essentially, many well-known tax preparers like TurboTax and H&R
Block have free versions of their software available for those with household income less than $60,000. If you visit the freefile
page on the IRS website, you’ll see these providers as well as many other approved freefile services. When it’s time to file your return, you simply choose a
freefile service provider, download their software,
and it’ll walk you through your filing process. At the end, you’re able to
submit your return to the IRS. Again, freefile services
are available for those with a household income
of $60,000 or less, and we’ll drop a link in the
chat to the different programs. If you do have lots of
questions about your taxes, we suggest you connect
directly with someone from the IRS or tax professional. We realize that this is an
important topic for VISTAs, but please be aware that we are not able to give you personal tax advice. To walk through your specific scenarios, you need to speak to someone at the IRS. While it may sound daunting to do, there are several ways
you can contact the IRS and ask the tax questions. The irs.gov website has a
help and resources section and there are a number of
FAQs to get you started. If you want to speak
with someone directly, whether in person or on the phone, there is a link to find a local IRS office or a tax payer assistance center in their “contact us” section. You can also call to make an appointment or speak with someone over the phone. Of course, the resources we mentioned are specific to federal taxes. If you have questions also
about your state taxes my best advice is to look up your state’s Department of Revenue and
contact them directly. And I’d like to now turn
it back to ShaVonne. – [ShaVonne] Thank you so much, Taryn. That was definitely
very helpful, and I hope that many people were able to
get some pointers from that. So let’s go ahead and talk
about some important information just looking ahead towards the future and the possibility of
eliminating student loans balance. To start, take a moment to think about your future career goals. Let’s see. Are many of you all interested
in a public sector career? If so, please share what types of public sector careers interest you. You may enter your ideas into the chat box and make sure you send
to all participants. – [Molly] Yea, and those
public sector careers can be through a variety of options. Some are coming in already. We’ve got non-profit management, city or federal government,
service coordinator, grant writings, social
work, registered dietitian. More social work coming in. More non-profit. Some government. We’ve got national park service, and, wow, someone has already signed up to work with the FDA after her VISTA
year which is fantastic. Also great to see we’ve got some going into tribal government,
Department of Interior, educational, non-profit,
non-profit management, veteran’s bureau. So we’ve got a lot coming in. So go ahead and share your responses if you haven’t already. We’ve got an AODA counselor, public house, state department, university teaching, non-profit sector, etc. So, ShaVonne, it does seem like we’ve got quite a few participants interested in some public sector careers. – [ShaVonne] That’s excellent. Well, there’s definitely
multiple federal programs that go above and beyond what
the VISTA program offers. So, when (mumbles) with our benefit, it helps to maximize the value
of your Education Awards. We’re gonna talk about public
service loan forgiveness. And that is a program
that encourages graduates to choose a career in public service. It applies only to federal direct loans, so if you have Parent Plus
loans or Perkins loans you may wanna consider consolidating them to take advantage of PSLF. If you consolidate, please keep in mind that only payments that you make on the new direct consolidation loan will count toward the PSLF. If you make 120 on-time
full monthly payments while employed by a qualifying
public service organization, the remaining balance of your
federal loans are forgiven. Only payments since
October 1st, 2007 count because that’s when the
PSLF program first started. The balance forgiven is not
considered taxable income. The employment and loan
payments don’t need to be consecutive, so you could work in public service for a few years, then take a corporate
job, and then go back to non-profit work. Only the payments made during your time in public service employment
count towards the 120. But this gives flexibility
in how your career proceeds. So let’s go ahead and take a quick look at what types of employers qualify as public service employment. To begin, in order to qualify it does need to be full-time employment. Public service employers
include any local, state or federal government organizations, non-profit organizations as
long as they are not partisan, political organizations, or labor unions, public schools, libraries,
and related organizations. Some more examples of
public service employment that qualify includes:
emergency management, military service, public
safety, as well as law enforcement services,
public health services, public interest law services,
early childhood education, public service for
individuals with disabilities, and the elderly. To apply for PSLF, you
will need to document your qualifying public
service employment as you go. So each year, or at least
each time you change jobs, you will need to complete the PSLF employment certification form. Have your employer verify it, and then submit the form
to FedLoan Servicing which is part of the
Department of Education that manages PSLF. FedLoan Servicing will review
your employment certification and let you know whether it qualifies, if information is missing, or if they need additional documentation. They will also let you know how many qualifying payments you have made. Just an FYI for currently serving VISTAs and VISTA alums who who like to document their VISTA service term as qualifying public service employment. Please submit the PSLF form to the VMSU via the National Service Hotline fax. Once received, the VMSU will
certify the employer’s section of the form based on your
VISTA term information and return the forms back to you to submit to FedLoan Servicing for processing. After making your 120th
qualifying payment, you can submit the PSLF application form to request forgiveness of the
balancing or direct loans. More information can be found online and that website will be given to you. We’ll include the link and the resources we share after this session. So now I’m gonna turn
things over to Calvin, and he’s gonna discuss how
he’s personally made the most of the programs to reduce
student loan burden. Calvin? – [Calvin] Hi, thanks ShaVonne. Hello, everyone. I just wanted to get on and share sort of some personal experience and kind of speak to my own situation in hopes that maybe it’ll shed some light
on the entire process, and how I’ve been able to combine the income base repayment,
the public service loan forgiveness, the Education Award and forbearance and all of that. So, I personally used public
service loan forgiveness and income base repayment to
manage my student loan down. I have about $24,000 in student loan debt, and before taking advantage
of income base repayment my payments were about $250 a month. I served for two years with AmeriCorps, during which my loans were
in a period of forbearance. After my two years of service, the salary at my first job was about $30,000. Using income base repayment, I was able to get my payments down to
a manageable $100 a month. As my salary has increased
a little bit since then, my payments have gone up slightly. But with public service loan forgiveness, I will still end up
paying significantly less than the full $24,000 over
the course of my ten years, or 120 payments. From my time serving in
AmeriCorps, I was able to claim 12 months of credit towards public service loan forgiveness. I’m gonna say PSLF from here on out because that’s a lot of words to say. PSLF, using my Education Award. And in my current career working for the Corporation for
National Community Service, I’m working to have my loans
forgiven in the next few years. So, while serving I took advantage of the national service forbearance
and the interest payments to reduce the burden of
living on a fixed stipend. However, if I would’ve
known better or had all of the information that I have now, I might’ve done things
a little differently. First of all, I wouldn’t have
put my loans into forbearance and I would’ve applied
for income base repayment during my service year so
that I could get credit towards my 120 payments while
paying virtually nothing. Because VISTA members, as mentioned… because VISTA members
live at poverty level, under income base repayment
your payments can be as low as 0 or $5. So I defiinitely would’ve done
that had I known before-hand. I wouldn’t have gone into
a period of forbearance and I would’ve just paid them. So what that means is,
because my loans were not in an act of status repayment
and I was not making payments, I can’t get credit for my actual service, but I was able to claim 12
credits using my Education Award. What I’ve learned is that the distinction between earning public service
loan forgiveness credits from paying out of your pocket each month and earning credits by
using your Education Award are very different. The distinction is very important. Because you can only receive a maximum of 12 public service
loan forgiveness credits from payment using the Education Award, even you make over 12 payments. This is something that is a little tricky, so I’ll try to repeat in a different way. If you use your Education
Award to make payments on your student loans,
you can only receive 12 public service loan forgiveness credits. You can make 24 payments
using Education Award and they will still only
give you credit for 12. So, no matter the amount
of payments that you make with your Education Award, you
can only receive 12 credits. But if during my service I
had been paying on my loans for both years, I could’ve
receive 24 payment credits for those two years, plus an additional 12 from using my Education Award
for a total of 36 credits instead of just the 12
that I was able to receive by using my Education Award. So by using all the
resources available to me, I feel like I have a pretty
comfortable relationship with my student loan debt,
and I really feel confident in my ability to pay it
off with the least amount of financial burden. Thanks, ShaVonne, for
letting me speak for a moment but I’m gonna turn it back to you for information about Perkins Loans. – [ShaVonne] Thanks so much, Calvin. For those of you with Perkins Loans, I’d like to point out some
of the unique characteristics of these loans as they
relate to the Education Award and loan forbearance. Perkins Loans are not
eligible for IDR or PSLF. However, for each year of
VISTA service you complete, you can get 15% of your
Perkins Loans forgiven. To be worthwhile, your Perkins
Loan balance would need to be at least $37,000. If that’s the case,
here’s what you would do. You would select the cash stipend as your end of year benefit. Just FYI, you can’t get the Ed Award and a 15% loan forgiveness. It’s one or the other. You’d put your loan in deferment based on financial hardship. At the successful completion
of your VISTA term, 15% of your Perkins
Loan balance is forgiven and the Department of Education
will pay off the interest that accumulated while
your loan was in deferment. To learn more details
about options for VISTAs who have Perkins Loans, this is the link that will be posted in the chat window. So, we’ve covered a lot
of different programs and options for you all to consider. To wrap up, we’re gonna go
over some recommendations for making the most of your benefits. For those with federally backed loans, here’s some thoughts
on how to get the most out of what is available. While serving, you can apply
for income driven repayment, which is IDR, and get your
payments down to almost nothing. This is a great option
if you know that you want to participate in the PSLF
program and want to gain credit towards your 120 payments without actually having to pay anything. Applying for forbearance while in service is another great option to
put your payments on hold and have the accrued
interest taken care of at the end of your service. If you are earning a cash stipend, ask your lender about other
programs that they may have to help you manage your student loans. Consider a “zero” value Education Award for future terms of service
if you have already reached your maximum amount of
Education Award funds. This lets you have the
forbearance benefits that come with the Education Award while maintaining our two
Education Award maximums. No matter what the decisions in service, these benefits extend well
into your life after VISTA. When your service is over,
keep making IDR payments in order to receive
credit toward your PSLF. Using your Education
Award to make payments is a great way to help
transition out of VISTA service and into permanent employment. Payments from the Education Award must be done manually each month. Please remember this. Although you can make as many payments as you would like from
your Education Awards, you can only receive a maximum of 12 PSLF credits total
using the Education Award. When your 120 monthly
payments have been made, you will be able to apply
for loan forgiveness. The PSLF program started in 2007, so the earliest that anyone
could receive the benefit of forgiveness would be 2017. There are some immediate
next steps we recommend you want to take as a
followup to this session. First off, know what type
of loans that you have. Take a look at the
Education Award website. You wanna check with your lender if you haven’t already placed your loans in forbearance or deferment. Next, explore the
income-based repayment plan and public service loan
forgiveness program. Also, make sure your lender
is listed on our website. Here are some of the resources that we shared during this session. We have our website, which
is my.americorps.gov. You’re gonna submit
forbearance, interest accrual, and associate payment requests. We have studentloans.gov,
which is a great website for all things related to student loans. The irs.gov website, for
guidance and assistance on tax-related topics. myfedloan.org, which is
a website that you go for assistance with PSLF
processing and verification. We have National Service Hotline, which you can connect
with the VMSU as well in order to submit paper
requests for forbearance, interest requests, or any
benefit-related questions. – [Molly] Wow, well thank you so much ShaVonne, Calvin, and Taryn. We covered a lot of information, and I know that there’s a
lot of questions out there. Calvin has been very
busy in the Q&A panel. But before we get to the
Q&A section of the webinar, we really wanna know
what you guys thought. So, on the right side of your screen the poll just popped up where you can share feedback about this webinar. Please take a moment to answer
the questions right there. It just takes a couple seconds. Because we do review your responses, and we like to use this information to help us improve webinars and your input does help us. So, we have given you
guys a lot to think about. And now it’s time for your questions. Because we have a pretty good
audience for this session, we may not be able to
get to every question, but we will do our best. We’ll focus on questions that
will likely be of interest to the other audience members. And again, we might refer you to get… We might avoid questions that get into a lot of personal details, but we’ll refer you to the
National Service Hotline so you can get an answer tailored to meet your specific situation. You can ask a question using the Q&A panel located on the right side of your screen as many of you are already doing. But now I’d like to ask our operator Kim to come back on the
phone and remind us how to ask questions via the phone lines. – [Kim] Thank you. At this time, if you’d
like to ask a question please press *1, and please
record your name when prompted. If you’d like to withdraw the request, you may press *2. Once again, to ask a
question please press *1 and record your name when prompted. – [Molly] Okay. And while we wait to see if
we have any questions coming through via the phone, I’m gonna go ahead and have Calvin work with
me on some of the questions that have come into the Q&A panel. So, Calvin I know you’ve been pretty busy, but I think that we have some questions that would be good for everyone to hear. So the first one is from Crystal. And she says, “I put
my loans in deferment, “but my loans were federal direct loans “through Great Lakes. “I got told forbearance
is if I had no job, “and they considered AmeriCorps a job. “But I was able to put them in deferment. “Will I able to get the
tax accrued paid off?” And I think she means the
accrued interest paid off. – [Calvin] Right, so, the interest payment is only gonna be for loans that are in national service
forbearance through AmeriCorps. If you are in deferment with your lender, we don’t pay the interest that is accrued on that deferment. We only pay the interest that is accrued while you’re in a status of
national service forbearance with AmeriCorps. – [Molly] Alright. Thank you, Calvin. And here’s another
question about forbearance. I think this is gonna be
a popular topic for us. Anthony asks, “If our
loans are in forbearance “during our service here, can
we make a retroactive payment “using our Ed Award to receive
the 12 payments for PSLF?” Is that something they would need to do? – [Calvin] Yea, you actually can. And that’s how you get your 12 credits using your Education Award. If you’re in a period of forbearance, you’re not making payments
so you’re not earning those credits, but once
you’re done with your service and you’re back into
a period of repayment, the way that that works is, whatever your monthly payment is, you pay that times 12
using your Education Award. And that’s how you get 12 credits. So, for example, if your monthly
payment after your service was $100 and you paid $1200
of your Education Award towards that, that would
count for 12 credits because it’s like you’re paying 12 months of payments all at one time. – [Molly] Great. Thank you so much. – [Calvin] Yea. – [Molly] Alright. So we’ve got a question
from Erin, and Erin says, “We can’t put a loan into forbearance “if it’s in the grace
period, so are we losing out “on those interest repayments
or does it not matter “because the loan is in the grace period?” Seems like if the loan
was in the grace period would they be charging interest? I think that’s what she’s asking. – [Calvin] Right. I’m honestly not sure. I don’t know if you are earning interest while you’re in your grace period. – [Molly] That might be a
lender specific question. – [Calvin] Yea. – [Molly] Okay. Alright. Alright, well we will just keep moving on. So Amanda has a question. “If one payment equals one credit,” and this is about PSLF I think, “could a person make multiple payments? “i.e. using the Ed
Award and IDR payments?” – [Calvin] Hmm. Let’s see. Person make multiple payments. That’s a tricky question. I’m not entirely sure that I understand what the question is asking. – [Molly] Okay. Yea, so she went on to
explain in another followup making multiple payments in one month. So, I don’t know if it
would be double counted? – [Calvin] Right. I’m not sure, honestly. Again, I think that’s a
lender specific question. I think you’d be
duplicating efforts there. One payment with the… I think one payment is
sort of one payment. That’s a hard question. I don’t know, but I can do some research and get back to Amanda on that. – [Molly] Or Amanda could call the VMSU. – [Calvin] Yea, or you can
email us at [email protected] and we’d love to get in touch with you and contact you about that. – [Molly] Yea. Alright, so let’s see. Rebbecca has a question. “If he had used IBR or IDR
while in his year of service “instead of forbearance, then would he “have not received the interest payment?” And that might a question specifically about your situation, Calvin. – [Calvin] Yea, definitely. So I would not have received
the interest payment because my loans couldn’t have been in a period of forbearance. If they were in that
period of forbearance, which they were during
both of my service years, I did receive an interest
payment for both years. But if I would’ve been
paying, then no I would not have received that interest payment. – [Molly] Okay. Alright, and a question from Stephanie. “Is there anything to
do about Perkins Loans “in terms of deferment, forbearance, ” and income-driven repayment?” – [ShaVonne] So, let’s say
they contact the university since they are the ones
handling the Perkins Loans to see what options are available. I’m not 100% sure. – [Molly] Sure. So ShaVonne, it sounds
like Stephanie should maybe reach out to the institution and see- – [ShaVonne] Yea, to see
what options are available. – [Molly] Okay. Alright. Great. Alright, Amanda says, “I
was not aware of this. Not sure what of this is, but… “Was told before my PSO that I had “to declare my choice as
Education Award or cash stipend. “I chose cash because the Ed
Award isn’t a dent in my loans, “And once you choose
cash, you can’t change. “Is there anything I can do about this?” – [Calvin] There is not. Once you select the stipend
as your end of service option, there is no way for us to change that back to the Education Award. Now, if you select the Education Award at the beginning of your service, you have the first 10 months of service to change to the stipend. But once that change
to the stipend is made, there’s no going backwards. And if you’re started your
service and have been activated with the stipend, there’s no way for us to change you to the Education Award. – [Molly] Yea, and hopefully… We do deliver that message during the navigating your year
of service session at PSO. Usually VMSU comes on to talk about that. So, unfortunately that is
part of the presentation. So, let’s see. Anthony says, “In order
to obtain as many payments “on my PSLF during my year of service, “I should apply for the
income base repayment plan, “make payments during my year of service “that will likely be close to zero, “and do this without
using my Education Award?” Sounds like he is looking to see if that might be a good strategy to follow. What do you think, Calvin? – [Calvin] I think… honestly, as I’ve mentioned, and some of the other questions,
that’s what I would’ve done if I could do my service over again. I would’ve stayed in
a period of repayment, applied for income-base
and got my payments down to as low as I possibly
could and collected all of those payments. That would’ve been 24 payments towards my public service loan forgiveness. And then at the end of my service, use my Education Awards to get
that additional 12 credits. I think it’s a good strategy. But again, it’s gonna be what
is best for the individual. If you contact your loan holder and the income-based
repayment is still a payment that is not manageable
on your VISTA stipend, then maybe you do wanna
opt for the forbearance to make things a little easier for you. But if it is a payment that
you’re gonna be able to handle, I think it is a good idea
to get that payment down to zero, or $5, or $10;
however much it might be, and go ahead and make those payments and get that credit towards your public service loan forgiveness. – [Molly] Okay. And it looks like Jillian has a question along the same lines. “Is it worth it to do the
income-based repayment “and PSLF if she has
loans around $30,000?” – [Calvin] 100 percent,
it’s totally worth it. Anything that’s gonna
get your payments lower and possibly get it forgiven in 10 years. If you do 10 years of federal service, or, sorry, public service, and
you’re paying $100 a month; what’s that, that’s like $12,000 maybe? I don’t know, am I
doing that math correct? Probably not. But I think it is. I did the math for myself personally, and my loans are about $24,000. And over the course of my 10 years that I plan on doing a public service, I’m gonna end up paying
significantly less than that and be done with them by the time I’m 32. Which is gonna be great. – [Molly] Yea, that will be great, Calvin. Good job. – [Calvin] Thanks. (laughs) – [Molly] And let’s see. So Marissa has a question again. I think about the speaking
role that you had was, “was stated by one of our
speakers that he would not “have put his loans into forbearance “and instead started paying
off his loans through PSLF. “Does this mean if we put
our loans into forbearance “we can’t start making payments on them?” – [Calvin] That’s correct. That’s what a period of forbearance is. It’s a period of time where you
don’t have to make payments. That’s the entire point
of forbearance is that you’re not making payments on them. If you do want to make payments, you do have to get out of
that period of forbearance and enter a status of repayment. – [Molly] Okay. And Jaleesa would like to know more about a statement you made. She was under the impression that “any amount forgiven through PSLF “was indeed taxable income in the year “that you apply after your 120 payments.” Do you have any more
information on that, Calvin, or where they could go for
more details on that topic? – [Calvin] So as I was
answering questions, I actually looked up something
about income base repayment, and under income base repayment… That is a correct statement. I think I… I don’t exactly remember where I found it. I’m sure it was in the
studentaid.gov website. But it did say that any
amount that is forgiven after 25 years is taxable income. I don’t know if under public
service loan forgiveness if it works the exact same way. I imagine that it might. But that’s gonna be some
more in-depth research that we’re gonna have to do
to figure out that answer. So again, all of that
information is gonna be on the federal student aid website under income-based repayment, and it gives you all of the stipulations and all of the contingencies
involved with applying for income-based repayment and doing public service loan forgiveness. – [Molly] Okay. Great, and I’m just gonna take a break from our online questions and
check in with our operator to see if we have any
questions on the phone. – [Kim] I show no question. Again, as a reminder, if
you’d like to ask a question please press *1. – [Molly] Great, thank you. Okay. Sampti has a question. “Where is the lender list on the website?” Is there a more specific URL instead of just myamericorps.gov
that Sampti can go to? – [Calvin] Yea, definitely. If you go to edaward.gov, and
then on the right-hand side there’s a link that says school. And it’s got all kinds of stuff. And I’ll actually go
ahead and I will drop that into the chat box right now. I just found it. So there you go. That’s in the chat box. If you go there, it’ll tell you
about matching institutions, schools that accept the Education Award, title 4 schools, and trade schools. So that’s all gonna be the best resource for figuring out which institutions will accept the Education Award. – [Molly] Great. And Taryn, we have a tax question. So I’m gonna refer this
question from Dylan to you. And Dylan says, “Tax-wise,
would it be better “to use the Education Award to pay “in monthly installments
or all at once at the end?” – [Taryn] Well, that is a good question, and I think it depends on… It depends on a lot of things, but I feel like I can’t
good advice on it besides, I guess if you’re breaking
it in between two tax years that could be one thing
because then it would be income counted toward one tax year vs. another; whereas, if you do one
lump sump it’s obviously gonna be in one tax year. So I don’t think I can really
give a good answer to that. – [Calvin] If I may go
back to what you said in your presentation. Let’s say you start your
VISTA year in January, and you end in December. That’s one full tax year. And let’s say, so in December you use all of your Education Award. So you’ve made $12,000
roughly from your VISTA year, plus the additional $5,000. That’s gonna put you at about
$17,000 worth of income. Finance your credits. Minus your credits and
deductions, that’s gonna keep you in a really low tax bracket. If you decide to take a job and
you’re making $40,000 a year and then you use your Entire
Education Award that year, your taxable income goes up to $45,000 and that may put you in
a different tax bracket and have some different tax implications. I think it also goes back
to what Taryn was saying about how tax questions are very tricky because they’re very personal, and there’s so many factors involved
with those decisions that you decide to make. – [Molly] That’s right,
Calvin, and good advice from the both of you. Let’s see. So, Linda would like to know,
“When using the Ed Award “to pay loans after
service, can we specify “what we want the money to go towards? “For example, can we pay a large lump sum “towards the borrowed sum,
i.e. not towards the interest “vs. just paying a monthly payment?” – [Calvin] Right, and
that’s gonna be where you’re gonna have to be really
proactive on your end at getting in contact and staying in communication with your lender. Calling them and saying,
“Hey, I’m sending over “this $5,000 for my Education
Award that I earned. “I’d like it to go towards my principle “and not the interest that is accrued. “Is that something that can happen?” And they’ll let you know, “Yes,
we can allocate this payment “to go toward this, or no we can’t do that “and it’s gonna go towards this.” That’s where you kind of have to advocate on behalf of yourself
to your lender and say, “Hey, these are my intentions. “This is what I want to happen. “Can you make this happen?” – [Molly] Alright, thanks, Calvin. And, Kim, do we have any
questions on the phone yet? – [Kim] I show no questions,
and once again as a reminder if you’d like to ask a
question please press *1. – [Molly] Alright, we’ll keep cruising through questions online
because they keep coming in. You guys have been really great. So, thank you for your questions. Let’s see. So, Devaney says, “If I’ve
chosen the cash stipend option, “will I still have my interest paid?” Calvin, what do you think? – [Calvin] You will not,
because you aren’t in a period of forbearance because you
didn’t elect the Education Award. So if you elect the Education Award, you can put your loans into forbearance. And the forbearance is kind of the… That’s the key to getting
your interest paid. You have to be in a period of
forbearance through AmeriCorps in order for us to make
an interest payment. If you choose the cash stipend, you can’t request the forbearance so you can’t get the interest payment. – [Molly] Alright. And, let’s see. Connor says, “I have a Perkins Loan “that is way less than $37,000. “Is it better to put it in
forbearance or deferment?” – [Calvin] Ooh. I don’t know the answer to that question. – [Molly] Sounds like it
might be a personal preference for the most part and may depend on some other circumstances. – [Calvin] I think so. I think so, yea. – [Molly] Well, Betsy has
a question about deferment. ‘Is there no way to go
back from deferment?” Is there a way to stop
her deferment period? – [Calvin] Yea, I mean I think
you should call your lender and if you want to get
out of a deferment period and maybe go into national
service forbearance, I would call and say,
“Hey, I wanna take myself “out of deferment so that I can apply “this national service
forbearance that I’m working. “And that is a benefit of my service.” You should be able to cancel your period of deferment at any point you wish. You just have to communicate
that with your lender. – [Molly] Okay. And does the same hold
true for forbearance? – [Calvin] For the national
service forbearance? You can get out out of that forbearance at any point you wish. So if you’re currently
receiving the forbearance and after this session you’re saying, “Oh man, maybe I should go
into a period of repayment “and apply for the income-base “so I can get my payments down.” You can cancel your forbearance. Contact your lender, say,
“Hey, I’d like to come out “of this status of forbearance
and start making payments.” – [Molly] Alright. – [Taryn] Can I just add something, too? Yea, when I was a VISTA and
I had my loans in deferment, toward the end of my service I decided to consolidate my loans, and that took me out of my deferment. I had to start paying
it, so, if you do decide to consolidate during your
term it might take you out of whatever forbearance/deferment
period you’re in. – [Molly] Good advice, Taryn. Thank you for sharing that. Alright. Let’s see. So, Alexis would like to know,
“When should you fill out “the paperwork for the public
service loan forgiveness? “Can you do that after your service, “and is that when you
receive the full credit?” – [Calvin] Yea, definitely. So, if you are in the
middle of your service and you send the VMSU your
employment verification, we can only verify you up
to the date that you send it because we don’t know
if you’re gonna finish your service or not. We can’t say that yes, this
person completed a full term without you actually
completing that full term. So, the best time to do
that paperwork is probably after your service, and then submit your employment verification
to us here at the VMSU and we can get that done for you. It is retroactive, so
any payments or any… So any payments that you’ve
made while being employed in public service since 2007 can count towards your public
service loan forgiveness. I just wanna bring that back up. So if you’ve been working
in public service since 2007 and you’ve made payments on your loans at any point in that time, you are able to retroactively count those
as payments towards your 120. – [Molly] Great. Alright, so Calvin we got
another question for you and your scenario that you shared. Zach says, “It sounds like
the ultimatum is forbearance “and interest accrual vs. income-driven “or income-based repayments.” He’d like some advice on
some things to consider, or maybe an example of how
much he might be able to save depending on the different scenarios. So Calvin, you talked about
this but how did you ultimately make up your mind on which scenario you were going to follow? – [Calvin] So, when I
originally started my service, I knew that I wasn’t
going to be able to afford full payments on my loans. I wasn’t incredibly well-versed
in the Education Award and in the national service forbearance, and in income-based repayment. I didn’t know as much about
that stuff as I do now. So, aw, man. Some advice on some things to consider. I would consider how long do you want to be paying off your loans? How much do you estimate or think that your payments are
gonna be once you’re done with your service and have
maybe a better paying job, a better paying position. Think about how much your
payments are gonna be over the next 10 years. Next 10, 25 years if you just
do income-driven repayment and don’t do public
service loan forgiveness. That’s hard, but I really do
like the way that he put… That is the ultimatum. It’s, you either can
elect the Education Award and get the interest accrual payment and request the national
service forbearance, or you just make payments
throughout your year and get your end of service stipend. Those are the two options
that you have to weigh. If it’s gonna be more valuable
for you to have that $1,500 at the end of your service then that’s the option I would go with. But at the end of the day
it’s all personal finances, what you’re comfortable paying, future planning, and what your goals are. My goals are to get my student loan debt to get eliminated as
soon as I possibly can. So that’s why I’m doing a
public service loan forgiveness and income-based repayment
and all that stuff. – [Molly] And Calvin, how
many years do they have to use the Ed Award? Can you remind us on that? – [Calvin] Yea, so you have seven years to use the Education Award from the day that you finish your service. So seven years after
your last day of service, your Education Award is
available for you to use. – [Molly] Right, and
we’re gonna have a webinar on using the Ed Award in January. So there will be many
more details to follow on strategies around that. Taryn, we have a question from Emily about taxes and VITA sites. Emily would like to know
“if the people at VITA will “have information about our
taxes and paying off loans “so that they could
answer questions specific “to their individual situations”. – [Taryn] Good question. The people at VITA will have
resources to paying taxes, but they won’t be able… well, I mean it depends on
their experience, I guess, but they won’t probably
have all the information on paying student loans specifically. But they’ll have information
about if you do pay student loan interest and how that can be a deduction on your taxes. But for the most part, VITA
volunteers and the type of resources that VITA sites provide is more focused on your taxes. I don’t know if it
would be a good resource for how to pay off your student loans, but I feel like Calvin
mentioned a couple times that there are different
resources and websites that are related to
student loans out there. Maybe specific to your student loans. Might have some resources that
will help you pay that off. But VITA is more focused on paying taxes. – [Molly] And Taryn, if
someone does end up going to a VITA site for assistance,
how should they prepare for that meeting or what
should they take with them? – [Taryn] Well, if they prepare
to get their taxes done, a lot of VITA sites will
ask you to show a photo ID plus your social security card
and then all your tax forms. And then if you have
questions, know to have them outlined out so that while
they’re asking you questions about your taxes you can
kind of have a conversation about other taxes you might have. Because like I said, oftentimes
those sites have resources to other information, to other providers that they can point you
in that right direction. – [Molly] Okay. Great. Thanks, Taryn. And, Kim, I’ll check
back in with you and see if we have anyone on the
phone that would like to ask us a question. – [Kim] Thank you. We do have a question
from a Rebbecca Miller. Your line is open. – [Rebbecca] Hello. I just wanted a little more
clarification if I could. I’m in my second year,
so I can take my loan out of forbearance and do the 12 months that I could have for my
income-based repayment. But it would depend, I would
think, on how much interest I’m accruing this year. Is that correct that
that would save me money? – [Calvin] I think the saving
money portion comes, for me in my personal situation,
the saving money portion comes at the end once I
reached my 120 payments and the rest of my loans are forgiven. I’m not sure if it’s like
so immediate that you would see the benefit from that. Because if you’re making
payments and they’re $5… obviously you’re making $5 payments. That’s not much money, but
you’re not saving anything. So for me, definitely the
savings come at the end. Even if the interest is still
accruing while I’m repaying, at the end of that 10 years
it’s all gonna go away. So I’m only gonna pay the amount… I’m trying to think of
how to explain that. So even if the amount of my loans grows because of interest that has
accrued over my service year, at the end of 10 years I’m only gonna pay what I was gonna pay for that
10 years and nothing more. – [Rebbecca] Okay, so if I was
going to try and figure out the math for myself and my situation, you started saying that it
would be the monthly payment that I would be paying
for the extra year or two? Is that correct? – [Calvin] In regards to
using the Education Award to get credits? – [Rebbecca] Right, like
this year my loan was in forbearance and so I got the amount of interest accrued paid off and so that was an amount of money. But in the end, you’re
saying I will have a year or two of payments; so 12 or 24 payments, that I may have been
able to count instead. So if I paid $100 a month
like your example you used, that would be $1,200 for that last year and then maybe $1,200
maybe for the other year if I could get the two years of credit, the 12 credits
– [Calvin] Yea. – [Rebbecca] or whatever you’re saying. So really that’s $2,400 in
payments it would save me in the end as opposed to
how much interest I got paid toward my loan amount? – [Calvin] Yea, definitely. And that’s a great thing to consider is, how much is your interest payment and how much would your
normal monthly payment be. If the amount of the interest
payment is more than what you would’ve paid over that
year, then that might be the better benefit for you, you know? But if that interest payment is only $500 and you would’ve ended up
paying $1,200 in payments, then using the Education
Award to pay that $1,200 might be the best use of those funds. – [Rebbecca] Okay, alright so that makes more sense to me then. ‘Cause I don’t know how
much my payment might be in the end if I could take off a year now or if I could’ve taken off my 12 credits for the previous year. Is there a way for me to
find out how much my payment would be on the loans
that I have currently? – [Calvin] Yea, call
your lender and ask them. Say, “Hey, I wanna apply
for income-based repayment.” Or if you don’t, you
can ask them “how much “is one of my normal loan payments? “How much would a normal
loan payment for me be?” And then express to them
your intentions and say, “Hey, I have this Education Award. “I’m looking to pay for 12
months using my Education Award “to get this credit.” And they can definitely
guide you through that and they’ll be able to
tell you the exact amount that you’re going to need to
pay using your Education Award in order to get those 12 credits. – [Rebbecca] So hopefully in
theory that will be more money than what interest was
paid over the one year. – [Calvin] Yea, definitely. Yea. So that you’re getting the
most amount of benefit. – [Molly] Great, thank
you so much for talking through that, Calvin. I think that was helpful to everyone. But we are getting near
to the wrap-up time. And there’s one question
I wanna ask Taryn on taxes and then I think we’re going
to just talk really briefly about PSLF because
there’s a lot of questions coming in on that. So, Taryn, the question about taxes is, “Where can someone locate
information about tax brackets?” That information is typically publicized and set in stone each year, right? – [Taryn] It’s funny you ask. I was looking for that
information when coming up with some notes for this presentation and there’s a link in the
question/answer I think for a website that’s
irs.com, and it does have some information there. The irs.gov website seems
to be tricky at just posting what the tax brackets are. I don’t know why. But I know when I do taxes for people, I use a software program that kind of automatically does it for me. So I can’t roll it off the top of my head where the brackets… how the brackets line up. But I will say, if someone
does contact the irs.gov and speaks to someone, they can get a better answer and a
more confirmed answer. But there’s lots of websites
that if you just type in “2015 tax brackets” there’s a
lot of information out there. I don’t know if it’s 100% accurate, but it’s probably close to it. But again, I like to direct
people back to irs.gov to talk to someone specifically there. And they do have those taxpayer sites that will answer questions like that. – [Molly] Great, thank you Taryn. Makes sense, irs.gov since they deal with so many tax issues. Alright, so Calvin, we
still have some questions that we didn’t get to, but
the main topic is PSLF, public service loan forgiveness, as well as income-based repayments and federal loan consolidation. So, in the next 30 seconds,
what’s your best resource for people to go to with
questions on those topics? – [Calvin] So, I think
that the best resource is going to be the Department
of Education website. They are incredible. Literally all of the information is there. When someone calls the VMSU and
they have a question for me, if I don’t know the
answer that’s where I go to look and search for things. Their search features are very powerful. You just type anything in and you can find whatever you’re looking for. Also, the Education
Award, go to edaward.gov. That is also a great
resource for questions regarding the Education
Award specifically. If you wanna call the VMSU, you can call the National Service Hotline
and ask them questions. You can send emails to VMSU at cns.gov and someone will get back to you with answers to your questions. Honestly, your best friend in answering any of these questions is gonna
be the internet and Google, ’cause that’s how I find all my answers. I don’t really… None of this comes naturally. No one just knows all this stuff. You really have to do your research and kind of dig in deep and
find your answers there, because all the information is there. – [Molly] Great, well thank you so much. And I have to disagree with you, because I think this does come naturally to all of our presenters
since you guys have done such a great job of working
through a really heavy topic and one that’s really important. So, a virtual round of applause to ShaVonne, Calvin, and Taryn. And, thank you all again for
attending this webinar today. And we hope you can
join us for our next one which will be on
organizational partnerships and collaboration: Better Together. That is scheduled for October
28th at 2:00pm Eastern. And remember that we do
have another partner webinar coming up about the Education
Award in mid-January. And if you want to refer
back to this webinar, remember that within the
next few weeks it will go up on the VISTA campus. And you can access a recorded
version of the webinar, you can listen to all the Q&A,
and you can also get access to the resources that were shared as well. So, thank you so much to our presenters and our esteemed guests. And I hope everyone has a great day. And thank you so much for your service.

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