Student Loan Information

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Student Loan Provisions

Federal regulations regarding student loans can often be confusing. Therefore, we have laid out the student loan provisions in a table format for your review. However, please refer to your promissory note for exact details.

Student Loan Repayment

If you wish to estimate your monthly payment amounts after graduation, please use the chart listed below.

Estimated Monthly Loan Payment Table
Total Loan Balance Number of Payments 5% 7% 9% 10%
2,000 36 59.94 61.75 62.67 64.53
2,625 48 60.45 62.86 64.08 66.58
3,000 72 48.31 51.15 52.60 55.57
4,000 108 46.07 50.03 52.08 56.31
5,000 120 53.03 58.05 60.66 66.08
6,000 120 63.64 69.66 72.80 79.29
7,000 120 74.25 81.28 84.93 92.50
8,000 120 84.85 92.89 97.06 105.72
9,000 120 95.46 104.50 109.19 118.93
10,000 120 106.07 116.11 121.33 132.15
12,000 120 127.28 139.33 145.59 158.58
15,000 120 159.10 174.16 181.99 198.23
17,000 120 180.31 197.38 206.26 224.66
20,000 120 212.13 232.21 242.65 264.30
22,500 120 238.65 261.24 272.99 297.34
26,000 120 275.77 301.88 315.45 343.59
30,000 120 318.20 348.32 363.98 396.45
35,000 120 371.23 406.38 424.65 462.53
40,000 120 424.26 464.43 485.31 528.60
45,000 120 477.29 522.49 545.97 594.68
50,000 120 530.33 580.54 606.63 660.75
60,000 120 636.39 696.65 727.97 793.00
70,000 120 742.46 812.76 849.29 925.00
80,000 120 848.52 928.87 970.62 1057.00
90,000 120 954.59 1044.98 1091.95 1189.00
100,000 120 1060.66 1161.08 1213.28 1321.00
Note: The interest rates are variable for Direct Loans and Federal Family Education Loans and are adjusted once a year, on July 1. The other Federal loans have fixed interest rates and remain the same throughout the life of the loan.

Repayment Provisions

Please select the loan type from below to view its general repayment provisions.

Grace Periods, Deferments and Forbearances

To determine whether you are eligible for any deferments or forbearances, please contact the lender of specific loan. For instance, contact the Department of Education's Direct Loan Servicing Center for your Direct Loan. If you are not sure whom to contact or how to contact them, contact the Financial Aid Office at the school that awarded you the loan(s). In the case of a deferment, for instance, the borrower is expected to make the request to the Direct Loan Servicer, the lender, or the school, depending on the type of loan.

Student Loan Cancellation

Cancellation of a student loan means that the borrower does not have to repay the loan. Typically, student loans are eligible for partial or full cancellation only if the borrower becomes permanently and totally disabled, or in the case of death. The Student Loan Cancellation Table gives general cancellation provisions by loan type. For detailed information on cancellation provisions for your loans, please refer to your promissory notes or contact your loan servicer.

 

Defaulting on a Loan

What is default?
Default occurs when a borrower becomes past due in making the payments on his or her loans.

Maintaining a good credit history is an important responsibility of any borrower. It is extremely important and beneficial that you develop a habit of meeting your payment schedule.

If facing a large amount of debt, you may be tempted to skip or delay some of your student loan payments. Your loans are reported to a national credit bureau and are treated like any other form of credit. Remember, a poor credit report will negatively affect your financial reputation for many years; it could keep you from obtaining a car, a mortgage, or even a credit card. Moreover, your report could be requested and used as a basis for hiring by your employers; or property, casualty, and life insurance companies could even use it as a basis for refusing to underwrite your personal property. Therefore, it is most important to do all you can to make your loan payments in a timely manner.

How will I know if I'm in danger of defaulting?
If you miss a payment, your lender will send you a letter reminding you that your payment is late. If your account remains past due, the lender is required to send you warning notices to remind you about your obligation to repay your loans and of the consequences of default.

If you fail to make loan payments on time or if you default on your loans, the consequences are serious:

Don't let this happen to you!

Remember, if you're having trouble making your payments, call your lender or school immediately. There are a number of options that may be available in circumstances of financial hardship, such as special payment plans or loan forbearance, which is an arrangement to reduce or postpone monthly payments for a specified period during which interest still accrues. In any case, your lender will work with you to help you avoid the serious consequences of default.

 

National Student Loan Data System (NSLDS)

The National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for student aid. It receives data from schools, agencies that guaranty loans, the Direct Loan program, the Pell Grant program, and other U.S. Department of Education programs. NSLDS provides a centralized, integrated view of Title IV loans and Pell grants that are tracked through their entire cycle, from aid approval through closure.

You can use the NSLDS web site to make inquiries about your Title IV loans and/or Pell grants. The site displays information on loan and/or grant amounts, outstanding balances, loan statuses, and disbursements. This information could be up to 60 days old based on the last update.

 

Personal Financial Planning

There are several key concepts that you should understand as you embark on your journey through personal financial planning.

As you look forward to graduation and perhaps beginning your first full-time job, there are many important steps that you will need to take to be sure your financial life is the best it can be.

Student loans may only be used for educational expenses and the loans must be repaid.

Please take your time and read through the pages contained in the interview. There is a lot of beneficial information offered regarding your future finances and student loans.

 

Keeping Good Financial Records

Keeping good records is one of the most important steps you can take to insure effective money management.

Consider these questions about your student loans:

  1. Do you know how much money you have borrowed through this year?
  2. Did you actually receive all of these funds?
  3. Do you have copies of all of your promissory notes?
  4. Who is your lender for each of your loans?
  5. Are you charged interest on any of these loans while you are in school?

All of this information should be at your fingertips. First, gather together all of the financial papers you may have, including promissory notes, entrance/exit interview letters, Student Account Receivable statements, award letters, bank statements and acknowledgments of loan money that has been credited to your student account. Once you have all this information in one place, take the following steps to organize it:

Step 1: Match Loan Amounts to Promissory Notes
Match the amount of dollars you have received to your promissory notes by loan type. If you are missing notes, contact your school/lender for copies. Remember, whether you have a copy of your note or not, the student loan must be repaid.

Step 2: Make Files
The next step is to make separate files for each academic year that you received loans. Place all award letters, loan payment acknowledgments, Student Accounts Receivable statements, entrance interviews and general loan information in these folders. Place copies of your promissory note(s) in a separate folder. If you have any multi-year promissory notes, you may want to make copies for each academic year.

Step 3: Make a Student Loan Log
On the log you will list the year in which you took out the loan, the type of loan, the loan amount, its interest rate, the minimum amount of monthly payment and the lender’s telephone number, address and e-mail if applicable. This log will bring together information from all your loan records for easier future access.

The following are two examples of entries:

Year Loan Type Loan Amount Int. Rate % Pay Amount Lender's Name & Telephone Number Lender's Address
1998 Perkins Loan $1,500 5.0 $40.00 School Credit & Collections
888-555-8898		 123 Washington
Chicago, IL 60606
1999 Federal Direct Loan $1,000 6.32* $50.00 Fed. Direct Loan Service Center
(800)848-0979		 P.O. Box 4609
Utica, NY 13504
* 1999 Federal Direct Loans had a 6.32% variable interest rate with an 8.25% cap.

 

Managing Your Finances

Use a Budget to Plan Expenses
A budget is a planning tool used to compare your income to your expenses. By using a budget, you can determine how much money you will need to spend in order to finish school and attain your degree.

To complete an estimate of your budget, use the Salary and Budget Calculator.

  1. Specify a Budget Period
    When developing a budget or using a planning worksheet, remember that all expenses and resources you list must be for the same period of time that reflects your academic period, such as 9 or 12 months.

  2. Estimate Your Expenses
    To determine your expenses, you will need to collect some basic financial information. Your checkbook, school bills, and other monthly bills are good places to look for examples of your expenses. For other expenses such as personal items, clothing, and entertainment, keep a day-to-day record of your expenses for a month to help you make reasonable estimates.

    Tuition and fees generally do not change over a year and are considered fixed expenses. Other costs, such as housing, books, food, transportation, and supplies can change under different conditions and are called "variable expenses". You will need to gather amounts for each of these classifications of expense, making best-guess estimates for variable expenses.

  3. Calculate Your Income
    To estimate your income for the time period, you will need to consider all of your resources. Use the same budget period that you used in figuring your expense budget, such as 9 months or 12 months.

    Include family assistance, grants and scholarships, savings, earnings, loans (including student loans for which you have been approved), and any other income.

    Your financial aid award letter, pay stubs, and bank account statements will help you in calculating your available resources.

  4. Determine the remaining balance
    The difference between your income and your expenses determines any remaining balance. This balance helps you to decide if you actually need all the loan money you are eligible to borrow.

    Negative Balance
    If the balance is a negative dollar amount, you do not have enough resources to cover your expenses. You will need to explore new financial resources and re-evaluate your expenses with a goal of reducing them. Many expenses depend on individual lifestyles and can be adjusted to reflect your available resources.

    You may also consider meeting with a staff member in the Office of Student Financial Aid to review other options, such as other sources of financial aid for which you qualify.

    Positive Balance
    If the balance is a positive dollar amount meaning that your total resources are greater than your total expenses--then you should also see a financial aid counselor. You may be able to reduce the amount of your loans, even if you've already received some of the funds. Remember that if you can lower the amount you borrow now, you will have less to repay later.

 

Establishing & Maintaining Good Credit

Credit has become an integral part of life in America today. You can rely on the convenience of credit cards and the flexibility of spreading out payments for major purchases. In an emergency, like an illness or job loss, credit can keep you afloat until the crisis has passed.

Credit can become a problem, however, if you overuse it. It is very easy to lose sight of the real cost of the things you are buying when saying, "Charge it". You need to establish credit, but you also need to use it wisely.

When you apply for a credit card or a loan at a bank, the creditor will check your credit history. Your credit history is one of the most important elements in your financial life!

For most creditors, the information on your credit report is all they will ever know about you. If it is blemished or if there is a mistake on it, the consequences could be serious. Bad credit will affect your ability to get certain jobs, buy a car, buy a home, rent an apartment, or get a credit card.

By taking out student loans to cover the cost of your education, you have already taken a step towards establishing a credit history. Each of your student loans are reported to a national credit bureau at the date of disbursement. Because your credit report is so important, the Federal Fair Credit Reporting Act allows you to see what is in your credit file with any credit bureau and to raise questions about any information included there.

Here are some ways to build upon a good credit history:

What is a co-signer?
If you ask a friend or relative to co-sign a loan, that person is legally responsible for the loan if you don't make payments. Think carefully about asking a friend or relative to co-sign your loan.

How will lenders view your credit history?
Potential lenders, such as banks, credit and charge card companies, and stores, evaluate your income, debts, savings, other assets, and your promptness in paying bills. The Federal Equal Credit Opportunity Act prohibits lenders from denying credit on the basis of sex, race, color, religion, national origin, age, marital status, because all or part of the applicant's income comes from public assistance, or because the applicant has exercised a right under the Consumer Credit Protection Act. This law gives applicants the right to know the reasons why, if they were ever denied credit.

Some creditors use scoring systems that compare an applicant's financial situation and other factors to those of their current credit users to predict who will be a good credit risk. In addition, the item or service being financed may help determine whether you qualify for a loan, since the product (a car, for example) is "security", that will be returned to the creditor if you default on the loan.

 

Reducing Your Debt

Even if your budget is balanced and you estimate enough resources to cover your expenses for the school year, you should continually be looking for ways to reduce the amount of money you must borrow. Borrowing less now will leave you with more money for your living expenses in the future.

In addition to reducing your expenses to a reasonable level, another means of lowering your loan requirements is to seek non-loan sources of financial assistance that do not need to be repaid. Scholarships and part-time employment are two excellent options.

Scholarships
Many organizations award special scholarships based on a range of qualifications. These may be based on simple criteria such as residency in a particular community or as complex as meeting specified academic qualifications. Finding scholarships for which you qualify may take some time, but the results can be very worthwhile.

Some of the places to search for and inquire about available scholarship funds include:

Part-Time Employment
A sure way to help pay for college and to avoid excess borrowing is to work part-time. Not only will you be covering expenses, but you will gain valuable work experience. Be careful, however, not to overload your study time with work; part-time employment should be part-time.