Planning for the Future

students at commencement

 

Repayment

National Student Loan Data System (NSLDS) provides a list of all information needed to verify who will be servicing your federal loans.  Their website is http://www.nslds.ed.gov.  After logging into the site, you will be able to see the name and contact information for the servicer of each of your loans, as well as the Title IV Loan(s) and grant(s) amounts, outstanding balances, loan statuses, and disbursements taken during enrollment.

Exit Counseling needs to be completed after graduation or being enrolled less than half time for your loans, which can be found on www.studentloans.gov.

Consolidation occurs when a borrower with multiple loans requests that all of the loans be consolidated into one loan.  This may benefit the borrower because there will be one loan with one lender, possible lower payments, and a fixed interest rate.  Keep in mind that since all of your loans will now be one loan, which may require a longer repayment period with more interest that will accrue.   It is important to research the party that will be consolidating your loans, and determining if this option will help make your monthly payments.

Stafford Loans
Stafford Loans will begin repayment six (6) months after graduation, or when the student becomes enrolled less than half time.  The repayment term may extend up to ten (10) years, or depending on the amount owed and type of repayment plan selected, may be extended up to twenty-five (25) years. 

Unsubsidized Stafford Loans begin accruing interest once they are disbursed.  If possible, paying the interest when it accrues will help to keep the principle balance of the loan close to the original balance once the loan comes into repayment.  Interest notices are often generated quarterly by the servicer or the amount can be given by the customer service department of the servicing company.  The servicer will contact you with a repayment disclosure statement during your grace period to notify you of the repayment terms.

Perkins/Nursing  Loans
The Federal Perkins/Nursing Loan becomes payable nine (9) months after leaving the University, or when the student is no longer enrolled at least half time.   This loan is payable directly to the school every three (3) months, with a 5% interest rate.  There is no penalty for prepayment, which may reduce you interest costs throughout the life of the loan.

The owner of these loans is Villanova University, and the servicer is ACS, A Xerox Company.

Exit Counseling must also be completed for a Perkins or Nursing Loan.  This counseling can be found on the Campus on Call website (Perkins/Nursing Exit Interview).

PLUS Loan
The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement.  For Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and for an additional six months after the student ceases to be enrolled at least half-time.

Interest begins to accrue after the loan is disbursed, and continues during all periods, including deferment.  If the interest is not paid during this time, it will capitalize at the end of the deferment period.

The parent will also be able to view the servicer information on www.nslds.ed.gov, and will be notified by the servicer of the repayment obligations with a disclosure statement.

Private Alternative Loans
Repayment terms for a Private Loan will be determined by you and the lender (the bank or other institution that provides the money for the student loan) of the loan.  The servicer will contact you about your repayment terms with a repayment disclosure statement during your grace period, so it is important to always keep your contact information up-to-date with them.  In some cases, the lender will be the servicer, or these administrative duties may be fulfilled by a third party. 

A Private Loan may not have the same options as a Federal Loan if you are having difficulty making payments.  If a situation arises that an on-time payment may not be manageable, it is important to contact your servicer immediately to avoid any negative consequences of delinquency or default.

Trouble making payments
If you are having difficulty making your payments, you should contact your servicer immediately!  The servicer will help determine the best solution to your current situation, and explain the options available to you based on your loan program. 

Below are some options that you may want to speak with your servicer about if you are having difficulty making payments.

  • Changing your due date to coincide with your paycheck may help to keep payments made on time.
  • Lower Payment Options may be available to you for both Private and Stafford Loans.  It is important to contact your servicer to see if you loan is eligible for a lower payment option.
  • A deferment is a period of time during which your loan holder suspends you regular loan payments.  The interest may be paid on Subsidized Loans by the government during a time of deferment.  For Unsubsidized Loans, you should try to pay the interest as is accrues during the deferment in order for the interest not to capitalize at the end of the deferment. 

Common types of deferment are listed below:

o   Enrollment in school (at least half-time)

o   Study in a graduate fellowship program

o   Rehabilitation training program for disabled individuals

o   Unemployment

o   Economic Hardship

o   Military Service

  • Forbearance is an arrangement to postpone a payment for a limited and specified period of time.  Interest will accrue on all loans during forbearance.  Any interest that is not paid will capitalize at the end of the forbearance, and will be added to the principal balance of the loan. 

Common types of forbearance include:

o   Temporary Hardship

o   In-School Forbearance

o   Economic Hardship

o   Natural Disaster

o   Military Service

Although some of the deferments and forbearances allow you to place your loans on hold for a few months at a time, they should be used in moderation.  There is a time limit to each deferment and forbearance, and once the maximum time has been spent, you will no longer be eligible for them again. 

Difficulty making payments can lead to your account becoming delinquent, and further continuation of delinquency can lead to default of your loan.  Default occurs if you fail to make payments according to the terms of your Master Promissory Note. 

When your account is delinquent, you will receive phone calls and letters from your servicer to notify you of the missed payment.  If the payment or other arrangements are not made, this can lead to credit reporting and possible outsourcing of your loan to an outside collection agency.  Default occurs when your loan reaches 270 days of delinquency.  If your loan were to default, you will run the risk of having the account balance due in full, could be sued, ineligible to receive future student loans if you return to school, income tax seizure, payments being taken from your paycheck, and I9 credit reporting.

If you are already in default, contact your servicer for options that you may have.

Debt Management Links

Resources

The following tools will help you calculate your monthly loan payments. Note that they are only recommended as resources and should not be used to yield true repayment figures.  A breakdown of each repayment option can be found on the website www.studentaid.ed.gov.

Repayment Calculator – for Standard, Extended, and Graduated Repayment

Income-Based Repayment Calculator

Income Contingent Repayment Calculator

Net Price Calculator

Additional Links

www.aessuccess.org

www.accessgroup.org/calculators

www.finaid.org/calculators

Servicers for Federal Loans:

Aspire Resources Inc. - Phone: 855-475-3335 - Website: www.AspireResourcesInc.com

CornerStone - Phone: 800-663-1662 - Website: www.MyCornerStoneLoan.org

Direct Loan Servicing Center (ACS) - Phone: 800-848-0979 - Website: www.myedaccount.com

Department of Education Student Loan Servicing Center (ACS) - Phone: 800-835-4611

EdManage - Phone: 855/479-0490 - Website: www.EdManage.MyEdLoan.com

ESA/Edfinancial - Phone: 855/337-6884 - Website: www.edfinancial.com/DL

FedLoan Servicing (PHEAA) - Phone: 800/699-2908 - Website: www.myfedloan.org

Granite State – GSMR - Phone: 888/556-0022 - Website: www.gsmr.org

Great Lakes Educational Loan Services, Inc. - Phone: 800-236-4300 - Website: www.mygreatlakes.org

KSA Servicing - Phone: 877-292-4825 - Website: www.ksa.myedloan.com

MOHELA - Phone: 888-866-4352 - Website: www.mohela.com

Nelnet - Phone: 888-486-4722 - Website: www.nelnet.com

OSLA Servicing -  Phone: 866-264-9762 - Website: www.osla.org

Sallie Mae - Phone: 800-722-1300 - Website: www.salliemae.com

VSAC Federal Loans - Phone: 888-932-5626 - Website: www.VSACFederalLoans.org

One-to-two weeks after the first disbursement, parents/students will receive a mailing notifying them of their selected loan servicer.