Graduate Programs Exit Interview

Every student who borrows from federal and/or institutional loan funds must participate in an exit interview with the MUSM Financial Aid Office before graduating or withdrawing from MUSM. During this interview, the borrower confirms the total sum borrowed, the source of each loan, repayment provisions (deferment, forbearance, cancellation), the amount of each loan, the date repayment begins, and the length of the repayment period.

Loan Deferment

While attending MUSM, the student is responsible for obtaining deferments for student loans received prior to matriculation at MUSM. Loan deferment forms should be submitted to the MUSM Registrar for completion.

After graduation or withdrawal from MUSM, the student is also responsible for requesting deferment and forbearance for the loans received while attending MUSM. Some of the deferment and/or forbearance options available are for full-time student status, participation in an accredited residency program, and active duty military service. The length of the deferment or forbearance varies depending upon the loan program. Each borrower should carefully investigate all the deferment or forbearance options available for each loan before borrowing.

Loan Consolidation

Loan consolidation is the combining of multiple federal education loans into a single debt. The new consolidation loan replaces the old loans so borrowers are, in essence, refinancing their education debt. Borrowers can use consolidation to stretch the payback period from the standard ten years up to thirty years.

Consolidation loans can reduce monthly payments and simplify bookkeeping and check-writing chores, but extending the repayment time will almost always increase the total amount the borrower will pay in interest.

Loan consolidation is available under the Federal Family Education Loan Program (FFELP), for borrowers with outstanding loans obtained under this program, and under the William D. Ford Direct Loan Program, for borrowers who have at least one Direct Loan or are unable for some reason to obtain a consolidation loan under the FFELP program. Under the direct consolidation program, borrowers receive their consolidation loans directly from the federal government. Both programs offer a range of parallel repayment strategies. The four basic repayment plans are:

1. Standard repayment plan - Ten-year payback with level payments
      

2. Extended Repayment Plan - Equal installments paid monthly for up to thirty years
      

3. Graduated repayment plans - Monthly payment amounts start low and are increased at specified intervals
      

4. Income Contingent repayment plans - The size of the monthly payment is based on the borrower's income and loan balance.

Both programs charge a variable rate that is adjusted annually and tied to the three-month Treasury Bill rate with a maximum of 8.25%.

Borrowers should exercise care in consolidating their loans. Under some consolidation programs, borrowers can lose deferment benefits or interest subsidies. Married students should be cautious about consolidating their loans together since each spouse must agree to be liable for repaying the total amount of the consolidation loan and for repaying the loan regardless of any change in marital status. Borrowers who want to minimize the interest cost of their loans should choose repayment terms that enable them to pay off their loans quickly.

For additional information on Direct Loan Consolidation see http://loanconsolidation.ed.gov/