Important answers to commonly asked legal questions from New Jersey residents

Getting a medical degree is becoming more and more expensive, and can run up crushing student loan debt. But it doesn't stop after four years of medical school! There's your internship and residency as well, which can really put a crimp in your ability to pay your CLASS student loan's from New Jersey's Higher Education Student Assistance Authority (HESAA).

Wouldn't it be great if you could defer payment until after your internship and/or residency has been completed? Luckily, you can! Medical students can get a deferment while an intern or resident, but there are some conditions that need to be met.

• You must be currently participating in an eligible internship or residency program of supervised training that is required by a State licensing agency prior to certification for professional practice or service.
• You must provide certification from the appropriate State licensing agency attesting to the necessity of the internship or residency.
• You must provide certification from the organization with which the internship or residency is being undertaken which specifies:
  • Acceptance of the borrower into the internship or residency program; and
  • Anticipated beginning and completion dates of the program.

Just remember that a deferment or forbearance is just a short term solution to your situation, a bandage on the wound. You will need to find a more permanent solution at some point.

Looking for a long term solution? Then check out the information in my free book, Paying for Your Classes with a CLASS Loan: A Survival Guide to HESAA. It will tell you about all of your options and which one might work for you!

If you live in the southern New Jersey area and need more personalized assistance with your situation, then feel free to call my office at 856-432-4113 to schedule an appointment or contact me by e-mail. You need to act now; the longer you wait, the fewer options are available!

Making payments on your New Jersey CLASS student loan can be tough enough, but what if you are temporarily disabled due to something like an auto accident or a work-related accident? What if , as a result, you can't work for a while?

Luckily, you can get a deferment if you are unable to work and earn money or attend school during a period needed to recover from injury or illness. To qualify, you must submit a request and provide HESAA with a statement from a physician, who is a doctor of medicine or osteopathy, and is legally authorized to practice, certifying that you are temporarily totally disabled.

Once HESAA receives your request for a deferment and all required documentation, it will notify you regarding the deferment's authorization. But there are things to bear in mind:

• The deferment begins on the date your qualifying status is certified to begin and ends on the date your qualifying status is certified to end.
• Maximum allowable time periods for all deferments except full-time and half-time study at an eligible institution shall not exceed six months for loans with a 10-year repayment term, 18 months for loans with a 15-year repayment term, 24 months for loans with a 20-year repayment term, 30 months for loans with a 25-year repayment term and 36 months for loans with a 30-year repayment term for an unemployment deferment, and for each of the remaining deferments, as established by the Authority.
• Deferments for NJCLASS loans with a 10-year repayment term are limited to unemployment deferments.

Deferments are, at best, temporary solutions to your student loan repayment problem. You are going to need something more permanent if you are going to survive long term.

Better Solutions

If you want a long term solution, then check out the information in my free book, Paying for Your Classes with a CLASS Loan: A Survival Guide to HESAA. It will tell you about all of your options and which one might work for you!

If you live in the southern New Jersey area and need more personalized assistance with your situation, then feel free to call my office at 856-432-4113 to schedule an appointment or contact me by e-mail. You need to act now; the longer you wait, the fewer options are available!

If you have a CLASS loan from New Jersey's Higher Education Student Assistance Authority (HESAA), it can be very difficult if you don't have a job upon graduation or become unemployed later in the repayment period. But can you get a break from making payments while jobless? Sometimes!

Deferments

If you are unemployed, you can seek a deferment, but there are conditions:

• You must be currently unemployed and conscientiously seeking but unable to find full-time employment.
• You may be granted up to a six-month deferment upon your initial request if you provide acceptable proof of eligibility for unemployment benefits or a signed written statement describing your conscientious search for full-time employment. The statement must include:
  • Proof that at least three attempts were made to gain employment;
  • The names, addresses and phone numbers of the possible employers contacted;
  • The name of the contact person at each possible employer; and
  • A certification of registration with a public or private employment agency.
• For all requests beyond the initial request, you must provide a signed written statement describing your conscientious search for full-time employment during the preceding deferment period. The statement must include the documentation, contact information and certification specified above.
• In order to remain eligible for the deferment, you can't restrict your job search to specific fields, positions, or salaries.

Financial Hardship Forbearances

What about forbearances? Well, HESAA may also, at its discretion, grant you periods of forbearance. It will only be granted if both the borrower and co-borrower qualify for the forbearance. It may be granted for situations including, but not limited to, economic hardship (as defined for federal student loans). But again, there are conditions.

• The maximum allowable time period for economic hardship forbearance cannot exceed six months for loans with a 10-year repayment term, 18 months for loans with a 15-year repayment term, 24 months for loans with a 20-year repayment term, 30 months for loans with a 25-year repayment term and 36 months for loans with a 30-year repayment term.
• In granting a forbearance, HESAA permits a temporary cessation of principal payments and temporarily permits payments of interest only, or a temporary cessation of both principal and interest payments. Interest continues to accrue during all forbearance periods.

More Information

Looking for a more long term solution to your CLASS loans? Then check out the information in my free book, Paying for Your Classes with a CLASS Loan: A Survival Guide to HESAA. It will tell you about all of your options and which one might work for you!

If you live in the southern New Jersey area and need more personalized assistance with your situation, then feel free to call my office at 856-432-4113 to schedule an appointment or contact me by e-mail. You need to act now; the longer you wait, the fewer options are available!

Yes, you can. Whether it is for undergraduate or graduate school, people borrow money to cover the cost of attendance at that school, and those costs can include many different things. A U.S. Department of Education publication, Your Federal Student Loans: Learn the Basics and Manage Your Debt states that,

"you may use the money you receive only to pay for education expenses at the school that awarded your loan. Education expenses include such school charges as tuition, room and board, fees, books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer."

For additional information, you should talk to someone at the financial aid office at your school.

Many people think that for graduate school, housing is not included. This is not true. Sometimes the best graduate or professional school is in another state, and you will need housing and accommodations while classes are in session.

As part of your fiunancial aid plan, you should carefully consider all of the costs of attendance at that school to be sure you have enough funds to cover them. As you can see from the quote above, many different things can be considered as a part of the cost, and you don't want to miss one.

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!

Effective on December 16, 2015, the Revised Pay As You Earn (REPAYE) plan helps borrowers of federal student loans with a third income driven repayment option. In effect, it extends the benefits of the PAYE plan, but does have some downsides.

The PAYE plan modified the Income Based Repayment (IBR) plan by shortening the repayment period from 25 to 20 years and lowering the cap on monthly payments from 25 years to 20 years. In addition, you would never pay more per month than a 10 year fixed repayment plan.

But this deal is not available to everyone. Older borrowers are out of luck. In order to qualify, you must not have any outstanding federal student loan balances as of October 1, 2007, and have taken distribution on a student loan after October 1, 2011. In essence, this plan was for newer borrowers, those in school at the time the program was released.

How is REPAYE Different Than PAYE?

What REPAYE does is make PAYE available to everyone by removing these restrictions. But there are some downsides that need to be considered, as there are some differences between PAYE and REPAYE. They are:

• There is no cap on the monthly payment equal to the payment on a 10 year fixed repayment plan; it will always be 10% of your disposable income. So if your income rises to the point where you can pay more than that amount, you will be required to do so.
• If you are married, your spouse’s income must be included in the calculations. Under IBR and PAYE, married couples can file separate tax returns, and borrowers can use only their Adjusted Gross Income (AGI). Under PAYE, you cannot.
• The 20 year repayment period in REPAYE only applies to undergraduate loans; loans for professional schools (e.g. law or medicine) or graduate schools have a 25 year repayment period. Under PAYE (and IBR for loans taken out after July 1, 2014) the repayment period is 20 years for all of them.

The REPAYE plan can be helpful to some people, but not for everyone. Anyone considering it should consult with a student loan professional to see if it is right for them, as every situation is different.

I Can Help

If you live in southern New Jersey and are looking for a more affordable repayment plan, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.

If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

Related Topics

• How to Tell If the REPAYE Repayment Plan is Right for You
• What is a Pay As You Earn (PAYE) Repayment Plan?
• What is an Income Based Repayment (IBR) Plan?

Are you looking to go to graduate school after college? How about medical or law school? If so, and you are looking for ways to pay for it, you should consider a Graduate PLUS loan from the U.S. Department of Education.

How Do I Get One?

Yes, the federal Department of Education lends money to graduate students as well! All you need to get one is be a graduate or professional degree student enrolled at least half time and meet the general eligibility requirements for federal student aid.

These loans are credit based, so a credit check will be done. Even if you have an adverse credit history, you can still get a loan. This can be done by either securing an endorser (i.e. a cosigner with a good credit history) or providing proof of extenuating circumstances relating to the adverse credit history.

If you still cannot get a loan, you may be eligible for additional unsubsidized loans if you have not reached the total lending limit.

Another great feature is that there is no maximum for this type of loan. You can get the difference between the cost of attendance and any other financial assistance received!

Can I Get an In-School Deferment?

Although the loan falls due once the funds are disbursed, the loan is placed into deferment while you are enrolled at least half time and for an additional 6 months after you graduate or drop below half time.

You should note, however, that interest will accrue during deferment and capitalize into principal unless you make arrangements to pay the interest during the deferment.

Graduate PLUS loans can also be repaid using any of the many repayment options offered by the Department of Education, including Income Based Repayment (IBR).

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!

Related Topics

• What is an Income Based Repayment (IBR) Plan?
• What is Interest Capitalization?

Has your child received all the qualifying loans and grants he or she can get? Is there still a balance due on the cost of attendance, and you do not have it in your bank account? If so, rather than go to a private or state loan, you should look into a Parent PLUS loan!

How Do I Qualify for One?

Yes, the federal Department of Education lends money to parents of students as well! All you need to get one is a child who is a dependent undergraduate student enrolled at least half time and meet the general eligibility requirements for federal student aid.

These loans are credit based, so a credit check will be done. Even if you have an adverse credit history, you can still get a loan. This can be done by either securing an endorser (i.e. a cosigner with a good credit history) who is not your child or providing proof of extenuating circumstances relating to the adverse credit history. If you still cannot get a loan, your child may be eligible for additional unsubsidized loans.

Another great feature is that there is no maximum for this type of loan. You can get the difference between the cost of attendance and any other financial assistance received!

Beware No Automatic Deferment!

Beware that the loan falls due once the funds are disbursed! There is no automatic in-school deferment, as with your child’s loans. However, you can contact your loan servicer to request a deferment.

In-school deferments can be requested while your child is enrolled at least half time and for an additional 6 months after your child is no longer enrolled at least half time. Also note that interest will accrue during deferment and capitalize into principal unless you make arrangements to pay the interest during the deferment.

Choose Parent PLUS Before Private!

These loans are a great way to close a “funding gap” for your child’s education. You should exhaust this option before considering any state or private loans. Parent PLUS loans can also be repaid using any of the many repayment options offered by the Department of Education, including Income Contingent Repayment (ICR).

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!

Related Topics

• Best Federal Aid Options for College
• Federal Grants Are Crucial to Your Financial Aid
• Why Federal Loans Are Better Than Private Loans

The U.S. Department of Education’s Stafford student loan program has both subsidized and unsubsidized loans, and knowing the difference between the two is very important. These differences affect eligibility, use (undergraduate or graduate school), and interest accumulation.

Eligibility. Subsidized loans are available only to those in financial need. This means that the school determines the amount you can borrow, and it cannot exceed your need.

In general, financial need is the difference between the cost of attendance and your Expected Family Contribution. With unsubsidized loans, you do not have to demonstrate need.

Use. Subsidized loans are only available for undergraduate school, while unsubsidized loans can be used by graduate students as well.

Interest Accumulation. This is where the names of the two loan types comes into play. With subsidized loans, the U.S. Department of Education pays the interest during the following periods, while with unsubsidized loans, you do:

• While you are in school at least half time
• For the first six months after you leave the school or graduate (the grace period)
• During a period of deferment of loan payments after you leave/graduate from the school

With an unsubsidized loan, the interest accumulates during these periods, and then capitalizes (is added to the loan principal) after the period is over.

As for the grace period, the interest that accumulates during the grace period on a loan that disbursed between July 1, 2012, and July 1, 2014, must be paid or it will capitalize.

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!

Related Topics

• What is an Expected Family Contribution?
• What is Interest Capitalization?
• Best Options for Federal Financial Aid

Anyone seeking educational financial aid from the federal Department of Education must fill out and submit the Free Application for Federal Student Aid (FAFSA) form. It becomes available each year in January and can be submitted online by going to www.FAFSA.gov.

This form is critical for not only your federal aid request, but for those offered by your state and school, as they also use the FAFSA form for information they need to see if you qualify. Therefore, it is very important that you find out their deadlines for filing, so that you are not too late and miss out. For federal programs, the deadline is June 30.

What Information Will I Need to Fill It Out?

All sorts of information is needed to fill out this form, including:

• Your name and Social Security number
• Your citizenship status and marital status
• Education level for each of your parents
• Your dependency status
• Your parents’ names, dates of birth, and Social Security numbers
• Parents’ Adjusted Gross Income for the previous tax year (if tax return filed)
• Parents’ earned income for the previous tax year
• Parents’ unearned income (e.g. SSI) for the previous 2 tax years
• Your adjusted gross income (and that of your spouse) for the previous tax year
• Your income (and that of your spouse) for the previous tax year
• Unearned household income for the previous 2 tax years

Income information can also be pulled electronically from your filed tax returns as part of the online process of filling out the form.

If you (or your parents) have not yet filed your tax return, you can use estimated income figures and then amend the FAFSA later with actual numbers once the return is filed.

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!

Related Topics

• Whose Income Do I Use If My Parents Are Divorced?
• How Do I Know If I Am a Dependent?
• Top 7 Mistakes You Can Make Filling Out the FAFSA

There are many financial aid programs offered by the federal Department of Education that can help students and families in financial need. One of those that is often overlooked is the Perkins loan program.

This program provides low interest loans (5% rate) both for college and graduate school to students with “exceptional financial need.” It is administered by the school as the “lender” and that is who is repaid after graduation. Not all schools participate in this program, so you should check with your school’s financial aid office to see if they do.

How Do I Know If I Am Eligible?

You are eligible for this program if you are

• an undergraduate, graduate, or professional student with exceptional financial need;
• enrolled in school full or part time; and
• attending a school that participates in the program

How Much Can I Borrow?

The amount you can borrow in this program depends on several factors, including

• your financial need
• the amount of other aid you receive
• the availability of Perkins funds at your school

This last one is very important, and because of it, you should apply for this loan as early as possible because once the funds run out, you will not get any of it, even if you qualify.

As to the amount you would receive, undergraduates can receive up to $5,500 per year, with a total cap of $27,500. Graduate or professional students (e.g. law or medical school), they can receive up to $8,000 per year, with a total cap of $60,000 (which includes the amount you received as an undergraduate).

More Information

If you are looking for more information about federal financial aid for college, then download my free book, Applying for Federal Financial Aid: The Definitive Guide for Students and Parents.

For more information about what happens after you graduate, get my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

You can also access the latest news on student loans, get answers to Frequently Asked Questions, and read articles in my Library. Continue to educate yourself as you go through the process of making smart decisions about college financing!