Discuss a repayment plan with your lender. -- You have several ways to repay your loan by making monthly installment payments on your account
.
Standard Repayment – fixed monthly payments of at least $50 with up to 10 years to repay in full.
Graduated Repayment – monthly payments will begin low and increase gradually over time.
Extended Repayment – lowers monthly payments over a longer period of time and has a predictable payment schedule.
Income Contingent and Income-Sensitive Repayment – monthly payments are calculated as a percentage of your income
Monday, January 25, 2010
Thursday, January 21, 2010
Payment Relief
Get Payment Relief
If you have trouble making your student loan payments, contact your loan servicer immediately. You may qualify for some form of payment relief. And it's important to take action before you incur late fees or your credit is affected.
Types of relief
A deferment is a temporary suspension of loan payments for specific situations such as returning to school, unemployment, disability, or military service. You have a right to defer repayment for certain defined periods.
Forbearance is a temporary postponement or reduction of payments for a period of time, as you and the lender or holder of your loan may agree, because you are experiencing financial difficulty.
Graduated payment plans provide short-term relief through low, interest-only payments followed by standard principal and interest payments.
Income-sensitive or income-contingent payment plans offer payment relief with payments that are a specific percentage of your gross monthly income.
For more information on graduated, income-sensitive, or income-contingent payment plays,
Federal interest subsidies
These options will provide you with payment relief and help you maintain a good credit rating. If you qualify and apply for federal interest subsidies on your loan during deferments, you loan balance will not increase during the deferment period because the government will be making interest payments on your behalf. However, if you do not qualify for federal interest subsidies on your deferment, or if your loan is in forbearance, your loan balance will increase by the amount of unpaid accrued interest.Issues in obtaining relief
It is import to act quickly if you find your student loan payments hard to handle. If you default, or fail to make your loan payments as scheduled, you risk very serious consequences. Your school, the financial institution that made or owns your loans, your state education loan guarantor, and the federal government can all take action to recover the money you owe. They may notify national credit bureaus of your default, negatively affecting your credit record. You could find it difficult to borrow money to buy a car or a house, and you would be inellible for additional federal student aid if you decided to return to school. The financial institution that owns your loans may ask your employer to deduct loan payments from your paycheck (garnish your wages), and your state and federal income tax refunds could be withheld ( tax offset) and applied toward the amount you owe. Also, delayed payment and collection activities could increase the cost of your loan.
So, if you’re having trouble with loan payments, don’t wait! Contact your loan servicer immediately.
If you have trouble making your student loan payments, contact your loan servicer immediately. You may qualify for some form of payment relief. And it's important to take action before you incur late fees or your credit is affected.
Types of relief
A deferment is a temporary suspension of loan payments for specific situations such as returning to school, unemployment, disability, or military service. You have a right to defer repayment for certain defined periods.
Forbearance is a temporary postponement or reduction of payments for a period of time, as you and the lender or holder of your loan may agree, because you are experiencing financial difficulty.
Graduated payment plans provide short-term relief through low, interest-only payments followed by standard principal and interest payments.
Income-sensitive or income-contingent payment plans offer payment relief with payments that are a specific percentage of your gross monthly income.
For more information on graduated, income-sensitive, or income-contingent payment plays,
Federal interest subsidies
These options will provide you with payment relief and help you maintain a good credit rating. If you qualify and apply for federal interest subsidies on your loan during deferments, you loan balance will not increase during the deferment period because the government will be making interest payments on your behalf. However, if you do not qualify for federal interest subsidies on your deferment, or if your loan is in forbearance, your loan balance will increase by the amount of unpaid accrued interest.Issues in obtaining relief
It is import to act quickly if you find your student loan payments hard to handle. If you default, or fail to make your loan payments as scheduled, you risk very serious consequences. Your school, the financial institution that made or owns your loans, your state education loan guarantor, and the federal government can all take action to recover the money you owe. They may notify national credit bureaus of your default, negatively affecting your credit record. You could find it difficult to borrow money to buy a car or a house, and you would be inellible for additional federal student aid if you decided to return to school. The financial institution that owns your loans may ask your employer to deduct loan payments from your paycheck (garnish your wages), and your state and federal income tax refunds could be withheld ( tax offset) and applied toward the amount you owe. Also, delayed payment and collection activities could increase the cost of your loan.
So, if you’re having trouble with loan payments, don’t wait! Contact your loan servicer immediately.
Sunday, January 17, 2010
Rehabilitating Your Loan
Rehabilitate a Loan
Under the loan rehabilitation program you and your loan holder (or the Department of Education if you have a defaulted Direct Loan) agree on a reasonable and affordable payment plan for nine (9) payments over a ten month period (Perkins Loan requires nine (9) consecutive monthly payments). In most cases, you sign a rehabilitation agreement specifying payments and responsibilities. A loan is rehabilitated only after you have voluntarily made the agreed-upon payments on-time and the loan has been purchased by a lender. Outstanding collection costs may be added to the principal amount.
Loan rehabilitation offers the following:
The 9 voluntary on time payments you make while rehabilitating your loans will be subtracted from the maximum repayment term of your loan.
Rehabilitating your loan(s) removes the default status of previously defaulted loans at completion of the process. National credit bureaus are notified when the loan is no longer considered in a default status.
Title IV Program including any remaining eligibility for deferment or forbearance, from the date of the rehabilitation.
Repayment plans available to other borrowers with the same loan type may be available to you, depending on your qualifying status.
Please keep in mind:
The amount of your monthly payment after rehabilitation may be more than the amount you paid while you were rehabilitating your loans.
Any interest outstanding at the time your loan is rehabilitated will be added to your current outstanding principal balance, increasing the total amount you owe. Collection costs may also be added to your principal balance, increasing the total amount you owe.
Delinquencies reported before the loan(s) defaulted will not be removed from your credit report.
Make sure that you understand the differences in loan rehabilitation for the different loan programs. For questions on rehabilitation of Perkins loan, please contact your school directly to establish an agreement. Please keep in mind that schools often contract with companies to service Perkins Loans. In those instances, the servicing agreement will be made with the borrower by the company acting on behalf of the school. It takes 9 consecutive loan payments to rehabilitate a Perkins loan. For FFEL loans, at the completion of the schedule of rehabilitation payments, a participating lender must agree to purchase the defaulted loan and assume servicing of your loan. You must continue making payments during this time.
Under the loan rehabilitation program you and your loan holder (or the Department of Education if you have a defaulted Direct Loan) agree on a reasonable and affordable payment plan for nine (9) payments over a ten month period (Perkins Loan requires nine (9) consecutive monthly payments). In most cases, you sign a rehabilitation agreement specifying payments and responsibilities. A loan is rehabilitated only after you have voluntarily made the agreed-upon payments on-time and the loan has been purchased by a lender. Outstanding collection costs may be added to the principal amount.
Loan rehabilitation offers the following:
The 9 voluntary on time payments you make while rehabilitating your loans will be subtracted from the maximum repayment term of your loan.
Rehabilitating your loan(s) removes the default status of previously defaulted loans at completion of the process. National credit bureaus are notified when the loan is no longer considered in a default status.
Title IV Program including any remaining eligibility for deferment or forbearance, from the date of the rehabilitation.
Repayment plans available to other borrowers with the same loan type may be available to you, depending on your qualifying status.
Please keep in mind:
The amount of your monthly payment after rehabilitation may be more than the amount you paid while you were rehabilitating your loans.
Any interest outstanding at the time your loan is rehabilitated will be added to your current outstanding principal balance, increasing the total amount you owe. Collection costs may also be added to your principal balance, increasing the total amount you owe.
Delinquencies reported before the loan(s) defaulted will not be removed from your credit report.
Make sure that you understand the differences in loan rehabilitation for the different loan programs. For questions on rehabilitation of Perkins loan, please contact your school directly to establish an agreement. Please keep in mind that schools often contract with companies to service Perkins Loans. In those instances, the servicing agreement will be made with the borrower by the company acting on behalf of the school. It takes 9 consecutive loan payments to rehabilitate a Perkins loan. For FFEL loans, at the completion of the schedule of rehabilitation payments, a participating lender must agree to purchase the defaulted loan and assume servicing of your loan. You must continue making payments during this time.
Thursday, January 14, 2010
Ways to Prevent Loan Default
Top Ten Ways to Prevent Defaulting on a Student Loan
1. Understand your rights and responsibilities regarding your re.payment obligation as well as your repayment options.
2. Borrow for college expenses only. Borrow only the amount you need and only what you can reasonably expect to be able to repay.
3.Keep all records regarding your loan. Make copies of all letters, canceled checks, and any forms you sign.
4.Notify your lender or servicer when you have a change of address, phone number, or name, or if you change schools or your enrollment status.
5.Seek help as early as possible if you have any difficulty maintaining your student loan repayment arrangement.
6.If you have any questions, talk to your lender or student loan guarantor about the particular terms of your loan.
7.Keep credit card debt to a minimum or avoid credit card debt completely.
8.Create and maintain a budget that is within your monthly income.
9.Consider making nominal student loan payments while in school. This will reduce the amount you owe after graduation.
10.Make loan payments on time.
1. Understand your rights and responsibilities regarding your re.payment obligation as well as your repayment options.
2. Borrow for college expenses only. Borrow only the amount you need and only what you can reasonably expect to be able to repay.
3.Keep all records regarding your loan. Make copies of all letters, canceled checks, and any forms you sign.
4.Notify your lender or servicer when you have a change of address, phone number, or name, or if you change schools or your enrollment status.
5.Seek help as early as possible if you have any difficulty maintaining your student loan repayment arrangement.
6.If you have any questions, talk to your lender or student loan guarantor about the particular terms of your loan.
7.Keep credit card debt to a minimum or avoid credit card debt completely.
8.Create and maintain a budget that is within your monthly income.
9.Consider making nominal student loan payments while in school. This will reduce the amount you owe after graduation.
10.Make loan payments on time.
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