Loan Repayment and Exit Counseling

Borrowers who have incurred high student loan debt should plan to maximize their financial effort to pay down their student loan debt as quickly as possible. Despite your best intentions, repaying sizable student loan debt within the confines of a standard, 10-year repayment schedule (which all borrowers are given initially) may not be realistic.

Depending on the types of student loans borrowed and other qualifications, some student loan repayment plans offer longer repayment periods of up to 25 years which helps to lower the expected monthly payments. Some of these plans offer loan forgiveness if an outstanding balance remains at the end of the prescribed repayment period. You can learn more about all of the federal student loan repayment options here. 

It should be noted that, although some of the federal loan repayment plans will provide for extremely low monthly payments, there are some drawbacks to these plans. The longer the repayment period, the longer it will take for you to pay off the principal amount of the loan and the more interest you will pay. Although income-driven plans such Income-Based Repayment (IBR) or Pay As You Earn (PAYE) offer loan forgiveness on any remaining balance at the end of the full repayment term, the amount of loan forgiven is considered taxable income based on current federal tax rules. This “taxable event” could lead to a fairly sizable tax bill the borrower will be required to pay the year in which the loan forgiveness occurred. Income-driven repayment plans are gaining popularity because they provide affordable payments for those with considerable student loan debt, however borrowers will need to develop a savings plan that will provide them the ability to pay the additional taxes on the loan amount forgiven should they utilize one of the loan repayment plans that have this forgiveness provision. 

Borrowers are encouraged to use the Dental Loan Organizer and Calculator (DLOC) to track their student loan debt and estimate their monthly payments. DLOC is available at https://www.aamc.org/services/first-for-financial-aid-officers/dental-loan-organizer and is available through the partnership between the American Association of Medical Colleges and the American Dental Education Association. In order to use DLOC you must be an enrolled dental student and you must create an account) with the AAMC. Students who have borrowed federal student loans can import them from NSLDS (National Student Loan Data System – NSLDS.ed.gov) which is a federal website that tracks a borrower’s federal student loans. Students that have private loans or loans from family can also enter the terms of those loans in DLOC. Once all loans have been entered and the borrower has entered their immediate post-dental school plans, DLOC will calculate monthly payments under each of the five possible federal repayment plans, total cost of the loans and estimated loan forgiven.

Aside from the loan forgiveness offered by IBR, PAYE, and REPAYE repayment plans, there are a number of loan forgiveness or loan repayment programs offered at both the federal and state levels. Public Service Loan Forgiveness (PSLF) provides federal loan forgiveness to qualified borrowers who work in the public/non-profit sector which can include many hospitals or community health centers. Qualified borrowers’ loans are forgiven after 10 years of employment in the public/non-profit sector and the amount forgiven IS NOT a taxable event like it is under IBR or PAYE.  For more information on the Public Service Loan Forgiveness program, visit the Federal Student Aid website.

The National Health Service Corps has a loan repayment program and some states have private-, state- or federally-funded loan repayment programs usually in return for service in under-served areas.  A comprehensive list of these programs can be found at www.explorehealthcareers.org (navigate to “Dentistry”, then “Dentist”, then click on “Resources” tab, then select “Funding Opportunities”).

The Tufts Loan Repayment Assistance Program (LRAP) is a university-wide program that helps selected Tufts graduates working in public service pay a portion of their annual education loan bills. The purpose of the Tufts Loan Repayment Assistance Program (LRAP) is to encourage and enable Tufts graduates to pursue careers in public service by reducing the extent to which their educational debt is a barrier to working in comparatively low-salaried jobs in the non-profit and public sectors.

Learn more about the Tufts LRAP program.

For online exit counseling for Federal Stafford/Direct Loan and Grad PLUS/Direct Grad PLUS Loans, please visit the Federal Student Aid website. 

Students who have received Tufts Loan, Health Professions Student Loan (HPSL), Loans for Disadvantaged Students (LDS) or Federal Perkins Loan while enrolled at Tufts are required to complete an online exit counseling session for these specific loans. Repayment of these loans is managed by Tufts University’s Student Loan Office which is part of the Student Financial Services Department on Tufts’ Medford campus. Tufts contracts with a third party loan servicer, University Accounting Services (UAS), who services these loans on Tufts’ behalf. UAS merely acts as a billing agent and can process deferment forms for Perkins, HPSL or LDS loans. For Tufts Loan deferment, requests for forbearance or to request a change in your repayment schedule on Tufts Loan, Perkins, HPSL or LDS you must contact the Tufts Student Loan Office (studentloans@tufts.edu or 617-627-4605). Changes of address can either be given to UAS or the Tufts Student Loan Office.

Students who must complete an online exit session for Tufts Loan, HPSL, LDS or Perkins Loan receive an instructional email from UAS that provides the link to begin the online session. You may also access the online session by going to https://www.uasconnect.com/. 

Click here to access Tufts Loan, HPSL, LDS or Perkins Loan account information managed by University Accounting Services (UAS).

If you’ve received a Tufts Loan and wish to postpone payment because you are enrolled in school at least half-time, participating in an internship or residency or are experiencing financial hardship, click here for a Tufts Loan Deferment Form. (Note: Only Tufts Loans borrowed after 7/1/2007 are eligible for in-school or internship/residency deferment. Borrowers with Tufts Loans borrowed prior to that day can apply for financial hardship deferment).

The Financial Aid Office provides an updated summary of student loans borrowed on an annual basis. The summary is included in the student’s financial aid award packet and provides a breakdown of the loan type, loan amount and the academic year in which the loan(s) was borrowed. A final summary is provided as the student completes financial aid exit counseling which occurs just prior to graduation or when the student withdraws or drops below half time status. By reviewing this information on at least an annual basis, you can keep tabs on your level of debt. Remember you may have student loans from college that would not be included in the annual summary. The National Student Loan Data System (www.NSLDS.ed.gov) is also a source of information for borrowers that provides a borrower’s loan history for all federal student loans (with the exception of HPSL and LDS loans). So if you’re not sure if you borrowed loans while in college, NSLDS will help you figure that out. NSLDS will also provide contact information for your lenders and loan servicers. 

It’s the student’s responsibility to track their student loan lender/loan servicer’s name, address and other contact information. The Financial Aid Office will provide this to a borrower during the borrower’s financial aid exit counseling session but realize you might need to contact your loan servicer while enrolled. If the borrower obtained any non-certified student loans, such as a residency, relocation and board examination loan or direct to consumer student loan, the Financial Aid Office would not have record of any of these loans. 

Like any creditor, your student loan lenders/loan servicers need to know where you are in order to send billing statements to you.  You’re still responsible for your student loan payments even if you should never receive a bill from your lender/loan servicer. Borrowers can easily find themselves delinquent on student loan payments should they not notify their loan servicers of any change of address. While enrolled in school, students tend to have address changes more often and, as a result, will often use their parent’s address as their main billing address for their student loans. This is fine as long as the student has timely access to this mail and, when their living situation becomes more stable, updates their address information accordingly with their loan servicers. It’s especially important to establish contact with your loan servicers to update your contact information once you’ve graduated, dropped below half time status or have withdrawn from school as well as throughout repayment. 

Since students will often borrow a number of types of student loans, it can be difficult to keep all the various loan terms straight.  A good rule of thumb is to review the basic terms of your loans each time you receive an Award Notification Letter. The Financial Aid Office’s website provides a brief description of each loan – interest rate, interest accrual, repayment and deferment options. This periodic review will help you remember why certain loans are considered more favorable than others so you’ll know which loans you should try to pay off more quickly than other loans because they’re more costly. Of course during the student’s financial aid exit counseling session, the terms of all student loans will be reviewed but if you’re just hearing this information for the first time expect to be very overwhelmed during your exit counseling session. Taking a little time each year to refresh your memory and get reacquainted with your student loan terms will save you some anxiety.

You can usually obtain access to your student loan accounts online through your loan servicer’s website. You’ll need to register to request a username and password.  We encourage you to obtain online access as soon as you borrow the loan or, at the very least, as you enter repayment on the loan. Your loan servicer’s website is a wealth of information too. You can usually download deferment forms or request forbearance as well as make payments online. Essentially online access allows you to get information on your student loans when you need it, at any time of day, without having to wait in queue on the phone.

Some loan servicers will give you the option to receive an electronic billing statement. This might be easier for some borrowers especially if their address is expected to change frequently. Depending on your loan servicers, electronic payments can usually be made on a month-to-month basis or you may be able to schedule the payments for a number of months in advance. These types of electronic payments are initiated by you on an ad hoc basis and are especially useful if you’re making the payment really close to the payment due date whereby a payment by check through regular mail might cause the payment to be considered late.

The other type of electronic billing is referred to as ACH payments. ACH (Automated Clearinghouse) payments are made when you authorize the loan servicer to take the payments out of your bank accounts on a specific date each month. Borrowers opting for ACH will sometimes be provided with an interest rate reduction on their loan. ACH helps facilitate on time payments which can lead to additional interest rate reductions on student loans depending on the borrower benefits that the lender provided on the loan. 

Borrowers might be a little apprehensive about setting student loan payments up with ACH. Some might be worried that too much money would be withdrawn while others are concerned over the security of their account information. We encourage borrowers to discuss their concerns with their loan servicers before agreeing to participate in ACH. Of course, when payments are due money has to be in the borrower’s bank account. Depending on your income and when you are paid, you need to make sure there are adequate funds available for payments when they’re due. Realize that you are usually given a choice of payment due dates (such as the 7th, 14th, 21st or 28th of each month) and can change the payment due dates with your loan servicers if necessary. When setting up ACH, you authorize the loan servicer to withdraw a specific dollar amount each month. They’re unable to withdraw more than that. If you wanted to make an additional payment towards your loan, you can usually do that electronically on an ad hoc basis or by sending a paper check. 

One thing borrowers might want to consider if choosing to pay their student loans electronically (either on ad hoc basis or through ACH) is setting up a separate bank account from which ONLY student loan payments will be made. Transfer or direct deposit money into that checking or savings account each month to cover all student loan payments scheduled for that month. The statement your bank provides you on a monthly or quarterly basis will be a nice record of all your student loan payment transactions which won’t be mixed with other transactions.

The majority of student loans have a grace period after you’ve graduated, dropped below half time or have withdrawn. This short period of time, typically between 6 months and a year depending on the loan program, gives the borrower time to find a job and get their living situation settled. During this time you should be creating a budget anticipating student loan payments. You need to be careful to not live beyond your means in light of monthly student loan payments coming due. You will need to develop an effective repayment strategy by considering all the different repayment options that are available on your student loans. What’s suitable for you is going to be based on your net income, how much student loan debt you have and what your other expenses are such as rent/mortgage, transportation, insurance and other living costs. The goal should be to repay your student loans as soon as possible paying down less favorable loans as soon as possible.

Once you develop a plan, monitor it to make sure it’s realistic. Know that, if necessary, your plan is flexible but always keep in mind that the priority is to repay student loans. The first few years of repayment, when your income is usually at its lowest point, will most likely be the most difficult time to manage student loan payments. After that, you’ll hopefully feel less burdened by student loan payments and realize additional discretionary income (that income that you have to spend AFTER student loans and taxes are paid!). It will be up to you, of course, where that additional discretionary money is spent. With many borrowers needing to opt for 25 year repayment schedules or income-based repayment schedules to make repayment of student loans more feasible shortly after graduation, recognize that you don’t want to be nearly 60 years old by the time you pay off your student loans. As you begin to realize additional discretionary income, you should begin making overpayments towards student loans. Remember there’s no penalty for paying off your student loans earlier than expected. You can also consider formally changing your repayment schedule by contacting your loan servicer(s). Realize that, as your income increases, you may need to change your repayment schedule if you’ve selected an income-based repayment schedule.

There are, at times, regulatory changes affecting repayment of student loans. Although your loan servicers should be able to counsel you on any changes in federal regulations affecting repayment of student loans, you can use the Financial Aid Office and our website as a resource.

If you’re running into trouble financially where you’re overburdened by student loan payments, don’t procrastinate in getting help. Remember you can usually adjust your repayment plan to make the payments more affordable or, if you feel it’s only a temporary financial setback, you can contact your loan servicer(s) to request forbearance. Remember if you’ve borrowed Tufts Loan, HPSL, LDS or Perkins Loan, you need to contact the Tufts University Student Loan Office if you need to adjust your repayment schedule on either of these loans or to request forbearance. They can be reached at studentloans@tufts.edu or by calling 617-627-4605.