Under the Federal Family Education Loan (FFEL) Program, after your student loan is placed in default by the holder of the loan, an insurance claim for the amount of the loan is paid by the guaranty agency (the organization that administers the FFEL Program for your state) to the holder of the loan. To find [...]
Federal education loans that are eligible for consolidation into a Direct Consolidation Loan
The following federal education loans are eligible for consolidation into a Direct Consolidation Loan: Direct Subsidized and Unsubsidized Loans Federal Subsidized and Unsubsidized Stafford Loans Direct PLUS Loans and Federal PLUS Loans Direct Consolidation Loans and Federal Consolidation Loans Guaranteed Student Loans Federal Insured Student Loans Supplemental Loans for Students Auxiliary Loans to Assist Students [...]
Your student loan may be discharged (forgiven) if you become totally and permanently disabled
* Your student loan may be discharged (forgiven) if you become totally and permanently disabled. If a physician (doctor of medicine or osteopathy) certified that you are totally and permanently disabled and you meet other requirements during a 3 year conditional discharge period your loan(s) may be discharged. It is important to note that: You [...]
What is Federal Pell Grant?
A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor’s or a professional degree. (In some cases, however, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.) Pell Grants are considered a [...]
How is the amount of payment calculated under the ICR plan
The ICR Plan is designed to keep payments affordable. Generally, borrowers pay the lesser of: the amount they would pay if they repaid their loan in 12 years, multiplied by an income percentage factor that varies with their annual income, or 20 percent of their discretionary income (AGI minus the poverty level for their family [...]
About Income Contingent Repayment (ICR) Plan
The ICR Plan gives borrowers the flexibility to meet their obligations without causing them financial hardship. Monthly payments are based on borrowers’ annual Adjusted Gross Incomes (AGI), loan balance and family sizes. Income is obtained from the Internal Revenue Service (IRS) or from an Alternative Documentation of Income Form (discussed below) submitted by the borrowers. [...]
What are the repayment plans?
When repaying a Direct Consolidation Loan, you may choose from as many as four repayment plans with various term selections. * Standard Repayment Plan: You will pay a fixed amount each month until your loan(s) are paid in full. Your monthly payments will be at least $50 for up to 10 to 30 years, based [...]
Can I change repayment plans?
Most borrowers may change repayment plans at any time. However, borrowers who are required to repay under the ICR plan must make three consecutive monthly payments before changing to another plan. There is no limit to the number of times borrowers may change plans. A borrower may change to the ICR plan at any time. [...]
What are the consequences of student loan defaulting?
Borrowers who fail to make a payment on time are considered delinquent on their Direct Consolidation Loans. Borrowers who do not make payments for 270 days are in default. Defaulting has severe and long-lasting consequences, as follows: * The Department of Education can immediately demand repayment of the total loan amount due. * The Department [...]
Can I delay processing of my consolidation application?
Yes, you can delay the processing of your Direct Consolidation Loan until closer to the end of your grace period end date if any of the loans you want to consolidate are in a grace period. Normally, when you consolidate your existing loan(s) into a new Direct Consolidation Loan, you will be required to start [...]