Student Loans Overview - RightCapital Help Center

Explore Student Loans in RightCapital

Need additional information for clients with student loans? This article includes facts and information that will help you to understand the nuances of your client's student loan debt. Click the following links for more details on entering student loans into RightCapital or using the Student Loan module.

Federal Student Loans

RightCapital allows users to designate the student loan type to evaluate the eligibility for income-driven repayment plans and loan forgiveness options. Federal loans will provide the most flexibility for planning opportunities in RightCapital.

The government offers Federal student loans with terms and conditions set by law. These loan types include many benefits, such as a fixed interest rate, income-driven repayment plan options, and eligibility for Public Service Loan Forgiveness (PSLF), which are not typically offered with private loans.

Loan Servicers for Federal Loans

When modeling student loan planning opportunities in RightCapital, specific data is needed to evaluate future strategies. These data points include loan type, payment plan, loan origination date, and the standard ten-year payment. Clients can contact the loan servicer to obtain the relevant details if this data is unavailable on the loan statement.

A loan servicer is a company assigned to handle federal student loan debt on the government's behalf. The loan servicer will assist your client with tasks related to their federal student loans. If the client's circumstances change at any time during their repayment period, the loan servicer will be able to help. If the client is unsure of their loan servicer, look for the most recent communication from the entity sending bills for the client's loan payments.

Private Student Loans

Private loans entered into RightCapital will not be eligible for income-driven repayment plan options or Public Service Loan Forgiveness (PSLF) eligibility. Planning opportunities with private loans typically involve consolidation or refinancing options.

Private organizations such as banks, credit unions, and state-based or state-affiliated organizations offer private loans. These loan types have terms and conditions that the private lender sets. Private student loans are generally more expensive than federal student loans.

Below is a graph that outlines different types of student loans and categorizes them by federal and private lenders.

Student Loan Repayment Plans

Student loans can be repaid in various ways depending on the client's situation. RightCapital allows users to input and propose four common student loan repayment plans. The standard repayment plan will use fixed payments to pay off the loan within ten years. The three additional income-driven repayment plans (IBR, PAYE, & SAVE) are designed to make student loan debt more manageable by reducing monthly payments. Income-driven repayment (IDR) plans can lower monthly payments or provide relief when the outstanding federal student loan debt represents a significant portion of the client's annual income.

The plans may seem similar, but each has distinct pros and cons. If the client didn't choose a repayment plan, the loan servicer will automatically place them on the Standard Repayment Plan. Below are the details for each student loan repayment plan available in RightCapital.

Standard Repayment Plan

Repayment Plan	Eligible Loans	Monthly Payment and Time Frame	Eligibility and Other Information
Standard Repayment Plan	• Direct Subsidized and Unsubsidized Loans • Subsidized and Unsubsidized Federal Stafford Loans • All PLUS loans • All Consolidation Loans (Direct or FFEL)	Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).	All borrowers are eligible for the plan. You'll usually pay less over time than under other plans. Standard Repayment Plan with a 10-year repayment period is not a good option for those seeking Public Service Loan Forgiveness (PSLF). Standard Repayment Plan for Consolidation Loans is not a qualifying repayment plan for PSLF.

Repayment Plan

Eligible Loans

Monthly Payment and Time Frame

Eligibility and Other Information

Standard Repayment Plan

• Direct Subsidized and Unsubsidized Loans

• Subsidized and Unsubsidized Federal Stafford Loans

• All PLUS loans

• All Consolidation Loans (Direct or FFEL)

Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

All borrowers are eligible for the plan.

You'll usually pay less over time than under other plans.

Standard Repayment Plan with a 10-year repayment period is not a good option for those seeking Public Service Loan Forgiveness (PSLF).

Standard Repayment Plan for Consolidation Loans is not a qualifying repayment plan for PSLF.

Saving On A Valuable Education (SAVE)

Repayment Plan	Eligible Loans	Monthly Payment and Time Frame	Eligibility and Other Information
Saving On A Valuable Education (SAVE)	• Direct Subsidized and Unsubsidized Loans • Direct PLUS loans made to students • Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL made to parents)	• Your monthly payments will be 5% of discretionary income for undergraduate loans, 10% for graduate loans, and a weighted average for borrowers with both. • Payments are recalculated yearly based on your updated income and family size. • You must update your income and family size each year, even if they haven't changed. • Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).	• Any Direct Loan borrower with an eligible loan type may choose this plan. • You'll usually pay more over time than under the 10-year Standard Plan. • You may have to pay income tax on any amount that is forgiven • Good option for those seeking PSLF.

Repayment Plan

Eligible Loans

Monthly Payment and Time Frame

Eligibility and Other Information

Saving On A Valuable Education (SAVE)

• Direct Subsidized and Unsubsidized Loans

• Direct PLUS loans made to students

• Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL made to parents)

• Your monthly payments will be 5% of discretionary income for undergraduate loans, 10% for graduate loans, and a weighted average for borrowers with both.

• Payments are recalculated yearly based on your updated income and family size.

• You must update your income and family size each year, even if they haven't changed.

• Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).

• Any Direct Loan borrower with an eligible loan type may choose this plan.

• You'll usually pay more over time than under the 10-year Standard Plan.

• You may have to pay income tax on any amount that is forgiven

• Good option for those seeking PSLF.

Pay As You Earn Repayment Plan (PAYE)

Repayment Plan	Eligible Loans	Monthly Payment and Time Frame	Eligibility and Other Information
Pay As You Earn Repayment Plan (PAYE)	• Direct Subsidized and Unsubsidized Loans • Direct PLUS loans made to students • Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL made to parents)	• Your monthly payments will be 10% of your discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan. • Payments are recalculated yearly based on your updated income and family size. • You must update your income and family size each year, even if they haven't changed. • If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return. • Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years.	• You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. • You must have high debt relative to your income. • Your monthly payment will never exceed the Standard 10-year Plan amount. • You'll usually pay more over time than under the 10-year Standard Plan. • You may have to pay income tax on any amount that is forgiven. • Good option for those seeking PSLF.

Repayment Plan

Eligible Loans

Monthly Payment and Time Frame

Eligibility and Other Information

Pay As You Earn Repayment Plan (PAYE)

• Direct Subsidized and Unsubsidized Loans

• Direct PLUS loans made to students

• Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL made to parents)

• Your monthly payments will be 10% of your discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan.

• Payments are recalculated yearly based on your updated income and family size.

• You must update your income and family size each year, even if they haven't changed.

• If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return.

• Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years.

• You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.

• You must have high debt relative to your income.

• Your monthly payment will never exceed the Standard 10-year Plan amount.

• You'll usually pay more over time than under the 10-year Standard Plan.

• You may have to pay income tax on any amount that is forgiven.

• Good option for those seeking PSLF.

Income-Based Repayment Plan (IBR)

Repayment Plan	Eligible Loans	Monthly Payment and Time Frame	Eligibility and Other Information
Income-Based Repayment Plan (IBR)	• Direct Subsidized and Unsubsidized Loans • Subsidized and Unsubsidized Federal Stafford Loans • All PLUS loans made to students • Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents	• Your monthly payments will be either 10 or 15 percent of discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan. • Payments are recalculated yearly based on your updated income and family size. • You must update your income and family size each year, even if they haven't changed. • If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return. • Any outstanding balance on your loan will be forgiven if you hadn't repaid your loan in full after 20 years or 25 years, depending on when you received your first loans. • You may have to pay income tax on any forgiven amount.	• You must have a high debt relative to your income. • Your monthly payment will never exceed the Standard 10-year Plan amount. • You'll usually pay more over time under the 10-year Standard plan. • You may have to pay income tax on any forgiven amount. • Good option for those seeking PSLF.

Repayment Plan

Eligible Loans

Monthly Payment and Time Frame

Eligibility and Other Information

Income-Based Repayment Plan (IBR)

• Direct Subsidized and Unsubsidized Loans

• Subsidized and Unsubsidized Federal Stafford Loans

• All PLUS loans made to students

• Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents

• Your monthly payments will be either 10 or 15 percent of discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan.

• Payments are recalculated yearly based on your updated income and family size.

• You must update your income and family size each year, even if they haven't changed.

• If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return.

• Any outstanding balance on your loan will be forgiven if you hadn't repaid your loan in full after 20 years or 25 years, depending on when you received your first loans.

• You may have to pay income tax on any forgiven amount.

• You must have a high debt relative to your income.

• Your monthly payment will never exceed the Standard 10-year Plan amount.

• You'll usually pay more over time under the 10-year Standard plan.

• You may have to pay income tax on any forgiven amount.

• Good option for those seeking PSLF.

Income-Driven Repayment Calculation

The following table illustrates how income-driven student loan payments are generated within RightCapital. The client's discretionary income is calculated by taking their previous year's AGI from their 1040 Taxes and Fees card and subtracting 225% of the poverty guideline amount based on their family size and residence state.

Taxation on Loan Forgiveness

After income-driven repayment plans have met their term limit, the remaining balance is forgiven if the loan hasn't been fully paid off.

Loan Type	Taxation
SAVE	Any outstanding balance on the client's loan will be forgiven if it hasn't been repaid fully after 20 years (undergraduate) or 25 years (graduate) when using SAVE. RightCapital will include ordinary income tax for any amount that is forgiven within the financial plan.
PAYE	Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years when using PAYE. RightCapital will include ordinary income tax for any amount that is forgiven within the financial plan.
IBR	Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years when using IBR. RightCapital will include ordinary income tax for any amount that is forgiven within the financial plan.

Public Service Loan Forgiveness (PSLF)

The PSLF Program forgives the remaining balance on clients' Direct Loans after they've made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. The amount forgiven will not be taxable income within the financial plan. Advisors can use the student loan planning module to identify opportunities for PSLF while illustrating the benefits within a proposed plan.

Loan Servicer Contacting Information

Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

Below is a list of Federal loan servicers and their contact information. These contacts can be used to gather additional details needed for an in-depth student loan analysis.

Loan Servicer	Contact
CornerStone	1-800-663-1662
FedLoan Servicing (PHEAA)	1-800-699-2908
Granite State – GSMR	1-888-556-0022
Great Lakes Educational Loan Services, Inc.	1-800-236-4300
HESC/Edfinancial	1-855-337-6884
MOHELA	1-888-866-4352
Navient	1-800-722-1300
Nelnet	1-888-486-4722
OSLA Servicing	1-866-264-9762
ECSI	1-866-313-3797
Default Resolution Group (also known as Maximus Federal Services,Inc.)	1-800-621-3115 (TTY: 1-877-825-9923 for the deaf or hard of hearing)