Repaying Your Loans

 

 American Student Assistance Partnership

Prescott College Office of Financial Aid partners with American Student Assistance Partnership (ASA) ® to help students and their families navigate federal student loan repayment once they leave school. ASA is a third party servicer that assists federal student loan borrowers who attended Prescott College. The 16 dedicated ASA staff are fully versed in the various repayment options as well as deferment and forbearance options.

 

SALT

Prescott College has teamed up with SALTSM, a new membership program, to help alumni manage their money and student loans.   In addition to the money management resources described below, this is also a resource for you to use when you enter repayment on your Federal Student Loans.  SALTSM was created by American Student Assistance, a nonprofit organization, to help Prescott College students and recent alumni like you become more financially savvy. This program rewards you for making smart money decisions, and we’re providing all of its services to you—including your membership—free of charge.

 

As part of your free membership, you will have immediate access to expert student loan counselors. A student loan counselor can be reached at 877.523.9473 or loanhelp@saltmoney.org to help keep your student loans on track.

 

SALT has real, live counselors who can help you avoid delinquency or default by showing you: 

  • Your different loan repayment options.
  • What to do if you can’t afford your payments.
  • Where to find your student loan information.
  • Whether loan consolidation is right for your situation.

 

SALT counselor can be reached Monday – Thursday, 8:00 a.m. - 10:00 p.m., Friday, 8:00 a.m. - 5:00 p.m., and Sunday 11 a.m. to 10 p.m., all times Eastern Standard Time.

 

To active your SALT membership clicks on the link below or contact SALT’s Member Support team at 855.469.2724.

Activating your SALTSM membership allows you take advantage of members-only features, like:

  • Interactive money management tools that show you how to take control of your finances.
  • A personal dashboard that tracks all of your federal student loans from Prescott College in one place.
  • Loan advice from SALT’s expert counselors.
  • My Money 101—a self-paced, online resource that teaches you practical money management strategies for budgeting, credit cards, banking and more.
  • Access to thousands of jobs and internships to jumpstart your career.
  • Exclusive benefitsthat help you save and spend smart.

Repaying Your Loans

Consequences of Default

Default 

Default occurs when a borrower's payments to their lender become more than 270 days delinquent. After the 270 days the lender files a claim with the guarantee agency for reimbursement of the borrower's outstanding loan balance. Per federal regulations, the lender must document the servicing of the loan(s) by the lender. Once the guarantee agency determines the loan has been correctly serviced, they will purchase the loan(s) from the lender. Most federal student loans issued through Prescott College have been guaranteed by EDFUND.

What Are the Consequences If I Default? 

The consequences are serious and long term:

  • Loans may be assigned to a collection agency. 
  • A defaulted loan is reported as a collection account to national credit bureaus. 
  • The borrower may experience credit problems. 
  • Problems may occur with securing collateral, cure periods, foreclosures and mortgage insurance denial. 
  • Right to deferment is lost. 
  • Eligibility for further financial aid is stopped until the loan(s) is paid in full or is in repayment and the borrower has met all requirements for additional financial aid. 
  • The borrower's school may withhold academic transcripts. State and federal tax refunds may be "offset" (withheld) to repay the defaulted student loan(s). 
  • Wages may be garnished

Loan Discharge 

Consider loan discharge/forgiveness of your student loan if you meet the federally mandated requirements. If you are eligible for loan discharge, your student loan will be forgiven and you will not have to repay the loan. Contact your lender for more information.

Possible Reasons for Student Loan Discharge 

  • Total and permanent disability 
  • Death 
  • Closed school 
  • Bankruptcy 
  • False certification 
  • Unpaid refund

For more information on student loan discharge please visit the FSA web site.

Free Resources for You

 

American Student Assistance PartnershipPrescott College has teamed up with SALTSM, a new membership program, to help alumni manage their money and student loans.   In addition to the money management resources described below, this is also a resource for you to use when you enter repayment on your Federal Student Loans.

 

As part of your free membership, you will have immediate access to expert student loan counselors. A student loan counselor can be reached at 877.523.9473 or loanhelp@saltmoney.org to help keep your student loans on track.

 

SALT has real, live counselors who can help you avoid delinquency or default by showing you: 

 

  • Your different loan repayment options.
  • What to do if you can’t afford your payments.
  • Where to find your student loan information.
  • Whether loan consolidation is right for your situation.

 

SALT counselor can be reached Monday – Thursday, 8:00 a.m. - 10:00 p.m., Friday, 8:00 a.m. - 5:00 p.m., and Sunday 11 a.m. to 10 p.m., all times Eastern Standard Time.

 

To activate your SALT membership, click on the link below or contact SALT’s Member Support team at 855.469.2724.

Activating your SALTSM membership allows you take advantage of members-only features, like:

 

  • Interactive money management tools that show you how to take control of your finances.
  • A personal dashboard that tracks all of your federal student loans from Prescott College in one place.
  • Loan advice from SALT’s expert counselors.
  • My Money 101—a self-paced, online resource that teaches you practical money management strategies for budgeting, credit cards, banking and more.
  • Access to thousands of jobs and internships to jumpstart your career.
  • Exclusive benefitsthat help you save and spend smart.

 

What Is SALT? 

 

SALTSM was created by American Student Assistance, a nonprofit organization, to help Prescott College students and recent alumni like you become more financially savvy. This program rewards you for making smart money decisions, and we’re providing all of its services to you—including your membership—free of charge.

Loan Forgiveness Programs

Teacher Loan Forgiveness 

The Loan Forgiveness for Teachers Program allows qualifying borrowers to have a portion of their Federal Student Loans forgiven. In exchange for teaching in a qualified low-income school for five years, up to $5000 (maximum) of your outstanding student loans are forgiven or cancelled.

Conditions for Eligibility

  • Loans must be made on or after October 1st, 1998. 
  • You must be employed as a full-time teacher for five consecutive years.  At least one year must be after the 1997-98 academic year. 
  • You must teach at a qualifying school. Certain conditions allow for interruption of teaching service. 
  • You must have an unpaid balance on your loan.

For more information on teacher loan forgiveness please visit the FSA web site.

Need More Time to Pay?

Deferments 

A deferment is a temporary way to delay making payments as a result of a specific situation. During a deferment, interest will not accrue on a subsidized loan. There are several types of deferments including Economic Hardship, in school, unemployment and rehabilitation training for the disabled. Deferments are not automatically granted. Contact your lender for proper policies and procedures.

  • Economic Hardship is the most common type of Deferment. You are eligible if you are receiving public assistance; have a high debt burden or are unemployed. You may also qualify if you have a low monthly income. 
  • In-School: You can also defer your loan if you are enrolled at least half time as a student at a Student Financial Aid-eligible school or you are enrolled full time at a school run by the federal government such as the military academies. 
  • If you received some or all of your loans before July 1993, you may qualify for a deferment if you are temporarily totally disabled or if you’ve engaged in certain public service activities such as service in the Armed Forces, the Peace Corps or as a teacher in shortage areas. You can also defer payment if you are temporarily disabled or returning to the workforce after having a child. 
  • Can't make a payment?

Forbearance 

Forbearance is another temporary delay or reduction of loan payments. Your lender may be able to approve forbearance due to personal financial hardships, illness, or six other circumstances, so you will want to contact your lender to discuss your personal situation. However, unlike a deferment, interest continues to accrue on the loan that you will be responsible for paying. If you are having difficulty making your payments, contact your lender and ask about various options to avoid delinquency.

Repayment Options

Important Points About Repayment

Loan Exit Counseling 

All students who borrow federal education loans are required to complete loan exit counseling.  This process will refresh you about your rights and responsibilities before you enter repayment. You can fulfill this federal requirement by completing the Direct Loan Exit Counseling online.

Updating Your Lender 

As a borrower, you are responsible for notifying your lender or servicer of changes in your name and address as well as any changes in your enrollment status including withdraw, graduation, or if you drop to less than half-time enrollment or change your school of attendance.

Grace Period 

You typically have six months after you leave school to begin repaying your student loans. During this grace period it’s important that you contact your lender and ask for a repayment plan. Federal law requires lenders to notify borrowers regarding the lender’s name and address, the date of their first payment, payment options and estimated loan balance during your grace period. You must begin making payments at the end of your grace period whether you have received a repayment schedule or not. If your first payment due date is drawing near and you have not received a payment schedule, you must immediately contact your lender or servicer. If you are unsure who your lender is, you can view your personal loan history at www.nslds.ed.gov.

Repayment Options

Depending on what you qualify for, your lender will give you the choice of several repayment plans including standard, extended, graduated or income sensitive. Repayment plans range from ten to twenty-five years. The most important differences between these repayment plans are your monthly payment amount; the length of the repayment term and the total amount of interest that you’ll be paying. Keep in mind, the longer your repayment plan is, the lower your monthly payment will be but you will pay more interest in the long run. It is important to thoroughly investigate your options before making a decision on your repayment plan.

Standard 

Provides fixed monthly payment amounts over a specific period of time. The monthly payment is no less than $50, and the repayment period is a maximum of 10 years (120 months). 

Extended 

The extended repayment schedule is limited to new borrowers on or after October 7, 1998, with an outstanding balance of principal and interest in FFELP loans totaling more than $30,000. The maximum repayment term is 25 years. 

Graduated 

A graduated repayment schedule allows your payments to start low and then incrementally increase, with up to 10 years to pay. The final payment amount will not exceed three times the original payment amount. 

Income Sensitive 

Income-sensitive payment amounts are based on a percentage of your gross monthly income and the amount you borrowed, but must at least cover interest. Repayment terms will vary based on the percentage you request, your income and the loan amount. 

Links to Tools and External Resources 

Consolidation 

Consolidation allows you to refinance any or all-eligible outstanding federal student loans and create on new loan with one monthly payment. The consolidated loan will have a fixed interest rate, new terms and may have an extended repayment plan of up to 30 years. Be aware however, once you have consolidated, you generally cannot consolidate again unless you borrow subsequent loans. Consolidation is only available for Federal loans. Alternative loans cannot be included in your federal loan consolidation. We suggest you talk with a lending institution for further information.

More information on consolidation.

Bookmark and Share