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Your Education and Taxes

https://www.mygreatlakes.org/educate/knowledge‐center/paychecks.html

Phoenix Seminary participates in the William D. Ford Direct Loan Program. Loans are serviced by designated Federal Loan Servicers and must be repaid. The above link will discuss education tax benefits that could benefit you.

Federal Direct Unsubsidized Loans are available to qualified students. Funds are transmitted electronically to the student’s tuition account. Interest on the Unsubsidized Direct Loan begins to accrue at the time of the first disbursement. Repayment of loans will begin six months after graduation or withdrawal from school.

Application: https://studentaid.ed.gov/sa/repay-loans

Federal Direct Student Loan Interest Rates and Fees

All Federal Direct Loan programs listed below will have the Direct Loan Fees listed deducted from the amount accepted prior to fund disbursement. Each May, the federal student loan interest rates for the following July through June period are set according to the yield of the 10‐ year U.S. Treasury note plus a fixed percentage.

The rates and fees for the loans first disbursed on or after July 1, 2015 and the interest rates for loans first disbursed after July 1, 2016 are shown in the tables below. The interest rate for a loan, once established, applies for the life of the loan – that is, the loan is a fixed‐rate loan. The new interest rates for the upcoming aid year are shown in the lowest table below:

Student Type
Loan Type
Direct Loan Fees
Graduate
Direct Unsubsidized
(disbursed prior to Oct. 1, 2016 / on or after Oct. 1, 2016)
Graduate
Direct Unsubsidized
(Loans First Disbursed 7/1/2015‐ 6/30/2016)

As a result of the Budget Control Act of 2011 the U.S. Department of Education has announced the following changes to Federal Student Loans:

  • Loss of Subsidized Loan Eligibility for Graduate and Professional Students

Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate students are no longer eligible to receive Federal Direct Subsidized Loans (loans in which the interest was paid on the borrower’s behalf while enrolled in school or within a grace or deferment period).

The annual loan limit for graduate and professional students remains unchanged but this amount will now be limited to Direct Unsubsidized Loans.

  • Termination of Direct Loan Borrower Repayment Incentives

This provision affects all discount fee rebates for both undergraduate and graduate level students.

The Budget Control Act also terminates the authority of the Department of Education to offer any repayment incentives to Direct Loan borrowers to encourage on‐time repayment of loans, including any reduction in the interest rate or origination fee, effective for loans first disbursed on or after July 1, 2012. As a result of this change, the up‐front interest rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will no longer be offered on any Federal Direct Loan with a first disbursement date that is on or after July 1, 2012 (this includes the Direct Parent PLUS / Grad PLUS Programs). The law continues to authorize the Department of Education to offer interest rate reductions to Direct Loan borrowers who agree to have electronic payments automatically debited from a bank account.

Loan Deferments, Reduction in class hours, Withdrawal from classes, LOA for any student with a Federal student loan(s):

You may request a deferment form directly from your Student Service Advisor (SSA).  Failure to submit timely deferment forms can result in additional capitalized interest, incorrect repayment dates and even default. If you have outstanding student loans you are required to submit correct deferment forms to your loan servicer. The seminary’s Financial Aid Officer will help you accomplish this requirement.

The ramifications of any reduction in credit hours must be discussed with the SSA prior to such action being confirmed by the Registrar. Any reduction resulting in less than half time attendance which is four (4) credit hours or the effective date of an official LOA (Leave of Absence) must be reported to the FAO who will then report the status change to NSLDS. Once this status change occurs, your 180-day repayment calculation will begin. For example, if you drop below half time, withdraw from all classes, or take an official LOA on 10/20/2015, then effective on 10/21/2015, your count begins and your 6 months (180 days) of grace period begins.  Interest will accrue during the 180 days, unless you choose to make interest only payments and repayment will begin no later than 30 days from the end of your 180 day count. If you return to school or add additional classes prior to the completion of 180 days, then NSLDS will again be updated. As a borrower, it is your responsibility to notify the FAO of any status change or return to school. Phoenix Seminary has measures in place to facilitate communications on student status changes, enrollment changes, and LOAs; however, ultimately it is the student’s responsibility to reach out and notify the FAO of what their intentions are regarding enrollment. It is highly recommended to consult with your Student Services Advisor and the FAO prior to making schedule changes to understand what effects the change may have on your scholarships and/or federal loans.

Create Your Student Loan Repayment Strategy

Six months after leaving school or dropping below half‐time enrollment, most students begin repaying their federal student loans. The following link will discuss repayment and strategies to help you plan effectively. https://www.mygreatlakes.org/educate/knowledge‐center/repayment‐strategy.html

Financial planning is recommended for all seminary students, our goal is to avoid a level of debt that is not feasible with your expected future earnings. Always review your current level of indebtedness, debt to income, and federal loan balances to be prudent in planning your future payments. The NSLDS student loan repayment calculator can help you plan more accurately.  Review this link: “Student Loan Calculators”  http://www.direct.ed.gov/calc.html. You are also encouraged to complete the financial awareness counsel offered by the Department of Education, Federal Student Loans. The link for this is: https://studentloans.gov/myDirectLoan/financialAwarenessCounseling.action?execution=e1s1

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