International Loan Repayment Spring 2016 Overview Understanding loan

International Loan Repayment Spring, 2016

Overview ● Understanding loan types ● Responsibilities as a borrower ● Repayment Timing ● Repayment Options ● Late payments, delinquency, defaults and enforcement ● Change in Contact Information ● Q&A …………………………………………………………………… 2

Understanding Loan Types US Private Loans with a cosigner • Terms differ depending on lender • Check loan promissory note for specific terms • Accrued interest paid by borrower or capitalized at repayment • Generally, repayment period is 5 - 20 years depending on loan balance and lender • Generally 6 -month grace period depending on lender • Interest rate is variable or fixed for the life of the loan depending on lender …………………………………………………………………………………………………………………………… 3

Understanding Loan Types Columbia Institutional Loans: ● Need-based loans awarded as part of the scholarship consideration process. No interest accrued while you were in school or during grace. Repayment begins six months after you leave school and loans carry a fixed rate of 5% and is set on a 10 -year repayment. • Grace period clock starts on June 1 • The loan servicer is ACS www. acs-education. com or call (800) 826 -4470. Manage your account, pay online, update contact info, etc. • Carson (2% first 5 yrs, then 5% for remaining 5 yrs) • Harrison • Hurok • Interschool • Noblett • Whittemore …………………………………………………………………………………………………………………………… 4

Understanding Loan Types Prodigy Loan • Variable rate tier was quoted when you first applied • Accrued interest paid by borrower or capitalized at repayment • Generally, repayment period is 7 -10 years depending on when you borrowed • 6 -month grace period …………………………………………………………………………………………………………………………… 5

Responsibilities as a borrower ● The Prodigy Loan program is funded by investors in our community that support the school by lending to our international students. – Non-payment harms the community and puts future funding opportunities at risk ● On-time payment of your monthly loan obligation is expected from all student loan borrowers. ● Investors receive a reasonable return and are able to support schools beyond charitable giving. Prodigy Finance is then able to originate and service the loans to students. Borrowers are then able to complete their degrees at top schools and succeed in addressing their financing gaps. – Prodigy is starting to see some of their borrowers become investors once their loans are repaid. …………………………………………………………………… 6

Repayment Timing ● Early settlement is possible at any time ● Your first payment will be due November 28, 2016 and then on the 28 th of each month – payments received after the 28 th are considered late and subject to late fees ● Payments can take up to 10 working days to clear depending on from where and how you are paying – please coordinate payment at least 10 days before the 28 th of the month to allow transfer time. ● The amount due per month will vary as the US Libor rate changes and your loan is repaid, please see your statement for the due amount ● Allow for currency fluctuations between statement and payment ● Allow for transfer costs deducted i. e. ensure net amount is paid into Prodigy ● Prodigy recommends the use of an automated monthly transfer from your account. Debit order functionality will be available soon. – Your loan term is 10 years (120 months) of repayment and you can prepay at any time …………………………………………………………………… 7

Repayment Options ● The following 4 options are available for payment. Please see your statement for account specific details: – Direct Wire transfer into Prodigy’s HSBC accounts o Country specific options exist to limit your exposure to currency fluctuations o Wiring / Transfer costs apply – Fly. Wire o Benefits of Fly. Wire § Online access from anywhere in the world (using PC or mobile) § Direct transfers in your own local currency at competitive rates § Online support while you make your payment o How it works: § Visit www. prodigyfinance. peertransfer. com § Select the currency that your loan is in to make the payment § Select the country from where you are making your payment § Select the payment option § Enter your Loan Reference Number from your statement § Prodigy will receive your payment within 3 business days …………………………………………………………………… 8

Additional Repayment Options – Transferwise o. Paid into a local US Transferwise bank account o. Currency conversion and transfer fees costs apply, therefore ensure that total payment takes these costs into account o. May take up to 10 days to process – must coordinate payment well in advance to ensure payment is received by the 28 th of each month – Worldpay o. For some countries not covered by options 1 and 2 o. Currency conversion and transfer fees costs apply, therefore ensure that total payment takes these costs into account o. Can take substantially longer to clear into their account – must coordinate payment well in advance to ensure payment is received by the 28 th of each month …………………………………………………………………… 9

Late Payments/Delinquency ● Failing to make a payment has an impact on your status and your credit history ● Economic Hardship: – If you are facing temporary financial difficulties, please simply contact Prodigy as soon as possible and they will be happy to work with you on your options. Normally a forbearance will be offered. ● Late payments: – Late fees will be charged to you and your status to the alumni community is listed as “late” ● 6 months of non-payment: – Results in being in default of the loan …………………………………………………………………… 10

Default While Prodigy will work with you to avoid default, it is important to note that their loans are enforceable in 150 countries. ● Regardless of the country you are in, there will be legal ramifications should there be a default. In addition, the following will occur: ● 1. Your default will be registered with your local credit bureaus and courts which can severely limit access to credit in the future, it can also affect your ability to find a job 2. Legal proceedings will take place at your expense and under international enforcement a public judgement will be made against you in your country of residence and in the UK 3. The full outstanding balance of your loan falls due immediately 4. Columbia will be informed of your default 5. Alumni who have invested their personal funds to provide you with a loan will be informed 6. Your local and regional alumni offices will be made aware of your default 7. Prodigy will pursue legal recourse via an specialised international collections agency, with local agents Please do not default. Prodigy will work with you if you are facing issues. …………………………………………………………………… 11

Contact Information ● Prodigy requires that you update their records as you change jobs, addresses, or any time your personal circumstances change. Simply email them at payments@prodigyfinance. com. – Email/Address/Phone o Email – they need a non-Columbia email address from you o Address & Phone – please make sure you update your physical mailing address if you have moved as well as if you change your phone number. – Family contact details o If your next of kin, significant other or contact information for other family members who are references changes, please contact Prodigy – Employment Details o If there are changes to your job title, position, company, sector, salary or bonus changes, please contact Prodigy ● Need more help? Prodigy Finance, payments@prodigyfinance. com, +44 (0) 207 193 2832 OR 718 407 2445 …………………………………………………………………… 12

Debt Management Before you choose your Loan Repayment Terms, you need a plan. ● Choose a repayment timeline to meet financial goals. ● When it comes to determining a repayment strategy to fit your needs, remember that a “one size fits all” approach does not work. ● Be sure to consult with your loan servicer and use the tools at your disposal. ● Repayment strategies are borrower-specific and tailored to meet the borrower’s financial goals, for example: o Pay student loan debt quickly o Pay higher rate debt first o Save to buy a house, start a family o Relocate, go into business, etc. o Working in public sector ● There are no prepayment penalties on student loans so please keep this in mind as your salary increases and as you consider your bonuses. …………………………………………………………………………………………………………………………… 13

Private Loan Repayment Considerations • • Managing variable rate private loans Interest Rate Monthly Payment Amount 3. 25% $335 5. 25% $398 7. 25% $466 9. 25% $540 Payment amounts can change monthly, quarterly, or annually, depending on the loan terms (Sallie Mae – monthly, Prodigy/Wells – quarterly) • Harder to forecast • Requires careful budgeting • Example above assumes a $59, 000 original principal and 20 year repayment …………………………………………………………………………………………………………………………… 14

Loan Assistance and Loan Forgiveness Programs ● Loan Assistance Programs (LAP) and loan forgiveness may be available if borrowers qualify and funding is available ● Programs typically are sponsored/funded by: • School of attendance • http: //www 8. gsb. columbia. edu/socialenterprise/careers/loanassistance • October 15 deadline • Employer • http: //www. nytimes. com/2016/03/26/your-money/medical-dental-401 k-now-add-school-loan-aid-to-job-benefits. html? smprod=nytcoreiphone&smid=nytcore-iphone-share ● Employers like Fidelity have begun instituting student loan repayment benefits, a policy likely to gain traction with American companies. …………………………………………………………………………………………………………………………… 15

I’m Still Not Sure What to Do! It’s ok. We’re here. ALL SUMMER. Set up a time to come and see us! finaid@gsb. columbia. edu (212) 854 -4057 111 Uris Hall …………………………………………………………………………………………………………………………… 16