Student Borrower Information

As a college student, it is important to be well informed before making crucial decisions such as accepting a loan. There are many components that need to be taken into consideration. We have provided important information for you to think about before accepting or taking out a loan.

How much funding do I really need?
Are you able to pay anything out of pocket? Keep in mind that any loan funding you take will eventually have interest added to the principal amount.

 

What is the interest rate?

2020-2021 Academic year Federal Loans have variable interest rates based on education level and type of loan.

 

Is the interest rate fixed or variable?

Federal loan interest rates are fixed but private lenders may have variable rates.  A private loan could start at a 2% interest rate but over time this could go up as high as 10+%.

 

Other things to consider:
  • What are the terms of repayment?
  • Do I need to start paying immediately or is there a grace period?
  • Are there income-based repayment plans?
  • Can I make payments on the loan while in school?
  • Are there any penalties for paying off early?
  • Can I afford to pay down the interest while I am taking classes?

For more information on federal loans visit studentaid.gov.  For information on private loans and various lenders visit www.elmselect.com

 

Student Loans Repayment

All your work has paid off! Now it is time to pay back your loans. You must ask yourself, who do I have to make the payment to, well it depends on who is your Loan Servicer. We have provided information about Loan Servicers and the time period which you have until you must begin making payments towards your loans

Loan Servicers

loan servicer is a company that handles the billing and other services on your federal student loan. The loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help. –www.studentaid.ed.gov

Common Loan Servicers that contract with the Department of Education:

  • CornerStone
  • Fed Loan Servicing (PHEAA)
  • Granite State-GSMR
  • Great Lakes Educational Loan Services, Inc.
  • HESC/Edfinancial
  • MOHELA
  • Navient
  • Nelnet
  • OSLA Servicing

For contact information for these loan servicers please visit: https://studentaid.ed.gov/sa/repay-loans/understand/servicers#my-servicer

 

When do I have to pay back my loans?

Federal Direct Subsidized and Unsubsidized Loans have a 6-month grace period.  This means that your payments will begin 6 months after you graduate or separate from the university.

Federal Perkins Loans have a 9-month grace period. Loan payments begin 9 months after you graduate or separate from the university.  Perkins loans are paid back to the university (the university is your loan servicer and often works with a partner called ECSI).  *This program has been discontinued by the Department of Education.  The last awards were offered at the start of the 2017-2018 academic year.  

Default on Student Loans

Defaulting on student loans can have a serious and negative impact on your credit and ability for future borrowing. For a loan made under the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan Program, you are considered to be in default if you do not make your scheduled student loan payments for at least 270 days (about nine months). For a loan made under the Federal Perkins Loan Program, the holder of the loan may declare the loan to be in default if you do not make any scheduled payment by the due date.

Consequences of default can include, but are not limited to, the following:

  • The entire unpaid balance of your loan and any interest you owe becomes due immediately.
  • You lose eligibility for additional federal student aid.
  • Your default will be reported to credit bureaus, damaging your credit rating.
  • Your tax refunds or federal benefits can be withheld and applied towards the balance and/or your wages can be garnished.
  • Your loan holder can take you to court.

For more information on the impacts of default please visit: https://studentaid.ed.gov

What are my options if I am in default on my loans?

There are three main options for getting your loan(s) out of default.

  1. Pay your loan balance in full, including any interest or fees.
  2. Loan Rehabilitation: This is an agreement between you and your loan servicer where you will be required to make 9 voluntary, reasonable and affordable payments for 10 consecutive months. Under loan rehabilitation your loan servicer will determine a reasonable monthly payment amount based on your discretionary income and family size.
  3. Loan Consolidation: You can apply to consolidate your defaulted federal student loans (including Perkins loans) into a new Direct Consolidation Loan through the Department of Education.  If you choose to consolidate you must either agree to repay the new Direct Consolidation loan under and income-driven repayment plan, or make three consecutive, voluntary, on-time, full monthly payments on the defaulted loan before you consolidate it.

For more information on any of these options, you can contact your loan servicer, visit https://studentaid.ed.gov.