Category Archives: Student Loans

Useful information about student loans.

Default

Understanding Default

NEVER ignore delinquency or default notices from your loan servicer.  If you don’t make your monthly loan payments, you will become delinquent on your student loan and risk going into default. Contact your servicer immediately if you are having trouble making payments or won’t be able to pay on time. Learn about federal student loan default: Find out what may happen if you default, what steps you can take to keep your loan from going into default, and what your options are for getting out of default.

http://studentaid.ed.gov/repay-loans

Manage Student Loans

Three Rules for Managing Student Loans Smartly

Whatever the expenditures are for, if you overspend, you’ll over-borrow. Unless you’re managing ALL your money wisely, you may indirectly be mismanaging your student loans, which will impact your lifestyle for years while you pay them off.

 

                                Borrow Only What You Need, Only When You Need It

Remember: the amount you borrowed is not the  amount you’ll have to repay.  By the time you finish paying off your student loans, you’ll probably end up paying around 30% more (in interest) than the amount you borrowed (depending on how many years you take to pay the loans off). If you don’t plan for this, your student loan payments may be much larger than you expected and take a bigger chunk out of your paycheck than you’re prepared to pay.

 

    1. When Calculating How Much Student Loan Money You’ll Need, Ask Yourself These QuestionsCan I reduce my expenses (the answer is almost always yes)?
      Can I work more during the school year without jeopardizing my grades?
      Can I work more during the summer or find a higher-paying job?

Keep track of what you owe in student loans and use an online calculator to estimate what your payments will be at today’s interest rates (while keeping in mind that rates could continue to go up).

 

  1. Use Your Student Loan Money to Finance Your Education, Not Your LifestyleMany college students honestly believe they are managing their student loans well. They keep the money separate from their other funds and use it only for tuition, books, and fees. In reality, many students who do exactly that are actually NOT using their student loans wisely. Why? Because when you’re in college, unless someone else is footing your entire bill, every dollar you spend unnecessarily will be a dollar you’ll have to borrow later, which means another dollar plus interest you’ll have to repay. If you could have used some of your own money for tuition and books, you wouldn’t have to borrow as much.

Loans

Remember those loans you took out to help pay for school? The six months of your grace period gave you the time you need to make sure you know how many Federal Stafford Loans you have, what your monthly payment amount will be, where to mail your payment, and when to start paying the loans back.

When it’s time to make payments on your loans, you will work with one or more loan servicers. See if you have loans with servicers besides Nelnet by logging in to nslds.ed.gov. You’ll need your PIN.

For loans serviced by Nelnet, you can view all of your loan details by logging in to Nelnet.com. We’ll also send your monthly student loan billing statement around three weeks before your payment is due.

What to Do and Expect While You’re In Grace

  • Log in to Nelnet.com to update your contact information, see your due dates and payment amounts, and view other loan details.
  • About halfway through grace, when you log in to Nelnet.com, the Payment Schedule for your student loans with Nelnet will be available in the left hand navigation under Payment Schedule.
  • Explore your repayment plan options—if you don’t choose a specific repayment plan during your grace period, your loans will be on the Standard Repayment Plan, but you can change your repayment plan to better fit your budget at any time.
  • See if you have loans with other servicers at nslds.ed.gov. You’ll need your PIN.
  • Review your Nelnet student loan billing statement. It arrives about three weeks before your first payment is due. You can choose to receive paper or eStatements by logging in to your account at  Nelnet.com. See a sample Nelnet statement.

Things to Keep in Mind While in Grace

Special Considerations for PLUS and GradPLUS Loans

For Federal GradPLUS Loans for graduate and professionals students, your payments are postponed until six months after you graduate or drop below half-time status as a student. This postponement is called a six-month deferment, not a grace period.

Federal PLUS Loans for parents don’t have a grace period, and you’ll begin making payments approximately 60 days after the school(s) receives all of the loan funds. However, you can postpone payments while you or your student is in school—but the loan will continue to accrue interest. If you haven’t yet pursued this option, you can request this postponement (called a Parent PLUS Borrower Deferment) directly from us by calling 888.486.4722.

For both of these loan types, we’ll send your monthly student loan billing statement around three weeks before your payment is due. When you start making payments, your loan is considered to be in repayment.

Please log in to Nelnet.com to view when payments are due for these and any other kind of federal student loans that are serviced by Nelnet.

Get Ahead on Payments

Some borrowers choose to start making payments before their grace period ends. You will save money if you make payments on your student loans while in grace—this will lower your overall balance and maybe even shorten your loan term.

Consolidation, Repayment Plans, and Options to Postpone Payments

If you have federal student loans through multiple lenders, consider consolidating them into one loan so that you only have one monthly payment rather than multiple.

Nelnet also offers various repayment plans that could potentially spread your payments over a longer period of time or lower them based on various criteria.

If you don’t think you’ll be able to start repaying your loans, consider deferment or forbearance.

Military Options

If you’ve been called to active duty military service, you may qualify for a grace period of up to three years. If you return to school following the military service, you may qualify for additional grace time as well. If you’re unsure whether you are in your grace period or repayment, contact us

Loan Repayment

Repay your Direct Loan / Federal Stafford Loan

Here are a few details about repaying Direct Loans and Federal Stafford Loans:

  • After you stop attending school at least half time, withdraw, or graduate, a 6-month grace period begins. You receive only one grace period per loan.
  • Repayment begins after the grace period ends, with your first payment usually due 45-60 days later.
  • The maximum repayment period ranges from 10-25 years, depending on the repayment plan.
  • Payments are expected each month.
  • The minimum monthly payment is generally $50, but this amount may be different depending on your loan balance and your repayment plan.
  • You may prepay your loan at any time without penalty. Prepayment may substantially reduce the amount of interest you pay.

Repayment plans

Below are brief explanations of the variety of repayment plans available to Direct Loan and Federal Stafford Loan borrowers.

Standard:

  • Minimum monthly payment is $50, but may be higher depending on balance.
  • Maximum repayment period of 10 years

Graduated:

  • Begins with lower payments that increase over time
  • Maximum repayment period of 10 years
  • More interest accrues over the life of the loan because the principal balance decreases at a slower rate.

Income-contingent for Direct Loans:

  • Adjusted payment amount based on gross income and family size
  • Payments cannot be lower than your monthly interest amount
  • Eligibility and payment amount adjusted annually
  • More interest accrues over the life of the loan because the principal balance decreases at a slower rate.
  • If you do not repay your loan after 25 years, the unpaid portion is forgiven. You may have to pay income tax on any amount forgiven.

Pay as You Earn for Direct Loans:

  • Available to new borrowers if:
    • you have no outstanding  balance on a Direct or FFEL Program loan as of October 1, 2007 or have  no outstanding balance on a Direct or FFEL Program loan when you obtain  a new loan on or after October 1, 2007, and
    • you receive a  disbursement of a Direct Loan or a student Direct PLUS loan on or after  October 1, 2011, or you receive a Direct Consolidation Loan based on an  application received on or after October 1, 2011 (unless your loans repaid by the Direct Consolidation Loan make you ineligible because of the criteria in the preceding bullet).
  • Payment is not more than 10 percent of the amount by which your adjusted gross income exceeds 150 percent of the poverty line for your family size.
  • If your monthly payment amount is not enough to pay accrued interest on a Direct Subsidized Loan, the Department of Education will pay the remaining interest for a period of three years.
  • Eligibility and payment amount adjusted annually.
  • More interest may accrue over the life of the loan because the principal balance decreases at a slower rate, resulting in paying more money over the life of the loan.
  • Any outstanding loan balance after 20 years is forgiven. You may have to pay income tax on any amount forgiven.

Income-sensitive for Federal Stafford Loans:

  • Adjusted payment amount based on gross income
  • Payment is the greater of your monthly interest amount or 4 percent of your gross monthly income
  • Eligibility and payment amount verified annually
  • More interest accrues over the life of the loan because the principal balance decreases at a slower rate.

Income-based:

  • Available for payments made on or after July 1, 2009
  • Adjusted payment amount based on income and family size
  • Payment is not more than 15 percent of the amount by which your adjusted gross income exceeds 150 percent of the poverty line for your family size.
  • If your monthly payment amount is not enough to pay accrued interest on a Direct Subsidized Loan / subsidized Federal Stafford Loan, the Department of Education will pay the remaining interest for a period of three years.
  • Payments re-evaluated annually
  • More interest may accrue over the life of the loan because the principal balance decreases at a slower rate, resulting in paying more over the life of the loan.
  • Any outstanding loan balance after 25 years is forgiven
    • Very few borrowers will have  a remaining balance after 25 years.
    • The amount forgiven may be  taxable.
  • Estimate payment under the income-based repayment plan.

Extended:

  • Available to new borrowers on or after October 7, 1998, who have a minimum balance of $30,000 in loans
  • Payment amounts can be either fixed annually or graduated.
  • Maximum repayment term is 25 years
  • More interest may accrue over the life of the loan because the principal balance decreases at a slower rate, resulting in paying more over the life of the loan.

Difference between Loans

What’s the difference between Direct Subsidized Loans and Direct Unsubsidized Loans?

In short, Direct Subsidized Loans have slightly better terms to help out students with financial need.

Here’s a quick overview of Direct Subsidized Loans:

  • Direct Subsidized Loans are available to undergraduate students with financial need.
  • Your school determines the amount you can borrow, and the amount may not exceed your financial need.
  • The U.S. Department of Education pays the interest on a Direct Subsidized Loan

○     while you’re in school at least half-time,
○     for the first six months after you leave school (referred to as a grace period*), and
○     during a period of deferment (a postponement of loan payments).

*Note: If you receive a Direct Subsidized Loan that is first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

Here’s a quick overview of Direct Unsubsidized Loans:

  • Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.
  • Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive.
  • You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
  • If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).

Manage Loans while in school

10 Tips to Stay on Top of Your Student Loans While You’re in School

We know there’s a lot of information to take in when it comes to your student loans. Here are some tips to help you manage your loans, including ways to save you money while you’re still in school.

Reveal Stay Connected contentStay Connected

Throughout the life of your loan, we’ll share important information with you. To make things quick and easy for you, and to save a tree or two, we suggest a couple simple things.

TIP 1 Sign up for account access at mygreatlakes.org. You’ll be able to track your loans and get important information about them.

TIP 2 If your email address or other contact information changes, update your Account Profile. We want to be able to reach you, so we can help with whatever you need.

Reveal A Change in Plans? contentA Change in Plans?

No two students take the exact same route in school. Some attend full-time, others part-time, and still others change schools. Whatever you decide, make sure your school enrollment status reflects your changes. For example, if you take a leave of absence or attend school less than half-time, there are specific things you’ll need to know about starting to pay back your loan. We want to make sure you have all of the information you need in order to help you make decisions.

TIP 3 Update your school enrollment status.

Reveal Know How Much You Owe contentKnow How Much You Owe

It’s easy to lose sight of the total amount you owe on your student loans. Each time you receive an additional loan, keep track of the total to prevent any surprises after you leave school.

TIP 4 Check out the U.S Department of Education’s (ED) financial aid central database, called the National Student Loan Data System (NSLDS). It receives information from the key players in the student loan industry to provide you with information about all of your student loans, not just those serviced by Great Lakes.

TIP 5 Use ED’s payment calculator to estimate what your monthly payment amount might be after you leave school.

Reveal Smart Borrowing contentSmart Borrowing

One of the best ways to limit your overall student loan amount is to only borrow what you need.

TIP 6 Don’t borrow the maximum amount just because you can.

Reveal Make Payments While In School contentMake Payments While In School

A great way to hold down costs is to make student loan payments while you’re in school.

TIP 7 Making payments while you’re in school can reduce what you owe in the long run. Depending on the type of loan you have and when you make your payment, it will either be applied to your principal loan balance or the interest that’s accruing (building up). Either way, you will have that much less to pay when you are required to begin making regular payments.

TIP 8 To make it a little easier, sign up for Auto Pay to make automatic student loan payments, or make one-time payments online, by phone, or by mail.

Reveal Know About Your 1098-E Interest Statement for Taxes contentKnow About Your 1098-E Interest Statement for Taxes

During each calendar year, the interest you paid on your student loans may be tax deductible.

TIP 9 You’ll want to have your annual 1098-E Student Loan Interest Statement on hand when you prepare and file your taxes. Your statement is available each January from your mygreatlakes.org account. After logging in, select 1098-E from the Quick Links menu.

Reveal Expect It contentExpect It

TIP 10 We’re your student loan servicer and we’re here to help you. Expect outstanding customer service from us. We promise to deliver.

Loan Repayment

Your  loan repayment start date depends on the type of loan you borrowed. You are  required to begin making payments on time, even if you have not received a  payment notice or statement from your loan holder. If you do not receive a  payment notice, request one from your loan holder immediately.

To   find contact information for the loan servicer or lender for your loans, visit the National   Student Loan Data System (NSLDS®). You will need the PIN you established when completing the FAFSA to access your   information

http://www.dhe.mo.gov/ppc/studentloans/repaymentoptions.php