Student Default Management What? Who? How?

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1 Student Default Management What? Who? How? 1

2 The Student Loan Puzzle WTI Financial Aid Contents Where do I stand? Who has my loans? Forbearance and Deferment Consolidation Default Helpful Tips Resources Where do I stand? Know who and how much you owe Go to to Contact your servicer to see exactly how much you owe and to whom. determine the repayment plan that is right for you and to change if necessary. Some options are: Note that you may have multiple loan servicers or need to make multiple payments to one servicer. Graduated Income-Sensitive Income-based Extended Create a budget and set up an automatic payment plan to ensure your loans will be paid on time. Pay more than the minimum to sav e money by paying less interest. 2

3 Who has my loans? Contact information for loan servicers Fed Loan Servicing (PHEAA) Nelnet Sallie Mae Who has my loans? Cont. Contact information for loan servicers Student Loan Servicing Center (ACS) Great Lakes Educational Loan Services Deferment vs. Forbearance There are options if you can t make payments DEFERMENT FORBEARANCE A deferment allows you to temporarily postpone making payments on your loans for the following reasons: Unemployment In-School Economic Hardship Military Graduate Fellowship/Rehabilitation Public Service Parental Leave/Working Mother Forbearances are not automatically granted they are typically allowed at the lender s or servicer s discretion Payments are temporarily lowered or suspended Interest will accrue even on subsidized loans 3

4 Consolidation Consolidation can help make payments more manageable by combining several student loans into one loan with one monthly payment. You must apply for consolidation Consolidation will give you a fixed interest rate for the life of the loan The interest rate will never be higher than 8.25% You can use an online calculator to see what your new payment and interest rate would be Check with Financial Aid to see if this would be a good option for your individual situation What happens if you don t pay? Going into Default will negatively impact your life Defaulting on your student loans (failing to make a payment for 270 days) has serious consequences: It will be reported to consumer credit agencies affecting your credit score Your tax refund can be taken Your wages can be held back You might receive calls from collection agencies at home or work Ineligible for deferments and forbearances as well as future financial aid Professional licenses may not be renewed Official transcripts can be withheld Federal government may pursue litigation Helpful Tips Update your contact information with your lenders/servicers and WTI Financial Aid anytime there is a change If you can, pay the interest on your loans even when you are not in repayment Use your 6-month grace period to get your finances in order and create a budget You have 24/7 access to your loan information online..make sure you create an online account with your servicer! 4

5 Additional Resources National Student Loan Data System (NSLDS) Web Site Federal Student Aid PIN (reset or retrieve your PIN number) For general information about student aid For information on Direct Loans Student Loan Repayment Plans and Calculators msofrepay.jsp Free Annual Credit Report Direct Consolidation Loans Federal Student Aid Ombudsman WTI Office of Financial Aid wants to help you be successful! Contact Angela Aaron or any Financial Aid Representative if you have questions about your loans or need assistance in any way Ideas? Questions? Comments? 5