Repaying Student Loans: Tips,

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Know your options and eligibility

government Collection powers and Limitations

405-789-2227

Locate and Review your Student Loan details

Access the national student loan Data system at http://www.nslds.ed.gov/nslds_sA/. Borrowers must request pin numbers to access their loan information. To request a pin number, log onto www.pin.ed.gov.

Alternatively, call the u.s. Department of Education Federal student Aid information Center at

1-800-4-FedaId.

For PrIvate student loans

locate and review all your loan documents. For additional information, contact the lender or collector. Your credit report also may have useful information.

Consider your Future education goals

Whether or not you intend to return to school is an important consideration in exploring your

student loan repayment options. in any case, however, you must always maintain a current and positive repayment status with your student loan obligations.

Be aware of Federal and private Lender Collection powers

Always be mindful of the federal government’s power to collect on federal student loans. Most importantly, remember that there is no time limit on the collection of a federal student

loan. Collection powers include:

• seizing tax refunds

• issuing administrative wage garnishments without a court order

• seizing federal benefits offsets

• Denying new grants or student loans to defaulted borrowers

• Reporting defaulted borrowers to credit reporting agencies

• Charging borrowers very large collection fees

For PrIvate lenders

Be aware that loans will usually go into default as soon as a borrower misses a payment. Collection time limits vary by state (usually six years after default). However, private lenders can sue borrowers and get a judgment. The time limit on enforcement of a judgment varies by state. The lender can renew the judgment in most states resulting in an unlimited amount

of time to try to collect.

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indicate whether loan is current or number of months delinquent; include reasons for nonpayment

monthly payment name of holder and/or

The national Consumer law Center (nClC) encourages student borrowers to consider the various student loan repayment options and associated eligibility requirements. You may find a repayment option that better fits your current situation, depending, of course, on your eligibility. The repayment options are listed in order of best solutions, for federal as well as private student loans. More detailed information is available on the nClC’s website www.studentloanborrowerassistance.org.

determine your eligibility for Loan Cancellation

The first option to explore is your eligibility for cancellation of your student loans.

loan CanCellatIon outsIde oF BankruPtCy

This is the most complete solution from the borrower’s standpoint, but availability is limited and based on specific eligibility requirements, as outlined below. if you think you may qualify, visit www.studentloanborrowerassistance.org for more information and “self-help” packets. Cancellation forms are available at www.ed.gov.

• CAnCEllATiOn OpTiOns FOR FEDERAl lOAns

School-related cancellations

- school closure

- False certification and identity theft - unpaid refund

Personal circumstances

- Total and permanent disability

(see self-help packet from www.studentloanborrowerassistance.org; www.ed.gov ) Profession-related options

- Teacher loan forgiveness - public service

- Military service

- Other

• CAnCEllATiOn OpTiOns FOR pRivATE lOAns

Review loan agreement for conditions; although cancellations are rarely available, negotiation with a lender may be possible

loan CanCellatIon and BankruPtCy

Both federal and private student loans are difficult, but not impossible, to discharge in bankruptcy. Borrower must prove undue hardship. Consult with bankruptcy attorney.

explore eligibility for deferment or other postponement

if you do not qualify for loan cancellation, investigate and consider all possible loan deferment or other repayment-postponement opportunities.

deFerment/PostPonement oF Federal loans

• DEFERMEnT OvERviEw

- see www.ed.gov and www.studentloanborrowerassistance.org for detailed information • DEFERMEnTs iF BORROwER is nOT in DEFAulT

- student deferment for at least half-time study - Graduate fellowship deferment

- Rehabilitation training program deferment

- unemployment deferment not to exceed three years

- Economic hardship deferment, granted one year at a time for a maximum of three years

- Military and post-active duty deferments • DEFERMEnTs wiTH pERkins pROGRAM OnlY

- Full-time service for law enforcement and corrections officers - volunteer service (peace Corps, etc.)

• FORBEARAnCE (less desirable than deferments because interest will accrue, but can be a good stopgap measure)

Discretionary (FFEL borrowers)

- poor health/other personal problems that affect your ability to make scheduled payments (for both FFEl and Direct loan) - Administrative forbearance for various reasons, such as loan administration (both FFEl and Direct loan)

Mandatory (FFEL borrowers)

- Borrower requests forbearance from the holder of the loan and provides sufficient supporting documentation for the request (see www.ed.gov and www.studentloanborrowerassistance.org for more information)

deFerment/PostPonement oF PrIvate loans

Look into ways to modify Repayment, including Loan Consolidation

if your loans are not eligible for cancellation or postponement, determine whether they are eligible for a modified repayment plan, including loan consolidation.

please refer to www.studentloanborrowerassistance.org for more information.

modIFIed rePayment oPtIons For Federal loans

• pRiOR TO DEFAulT

- standard Repayment plan - Graduated Repayment plan

- Extended Repayment plan (owe over $30,000/25 years to repay) - perkins loan Repayment (contact school for repayment information)

Income-based options

- FFEl income-sensitive Repayment (submit income information to lender; must cover accruing interest)

- Direct loan income-Contingent Repayment (submit recent tax return information) - income-Based Repayment

Loan consolidation to lower monthly payments

- Consolidate some or all loans as a strategy to lower monthly payments - Consolidate loans to participate in income-based repayment programs

- Direct loans (see self-help packet at www.studentloanborrowerassistance.org) • AlREADY in DEFAulT

Loan consolidation to get out of default - FFEl consolidation

- Make three consecutive, affordable monthly payments, or - Agree to an income-sensitive Repayment plan

- Direct loan consolidation

- Make three consecutive, reasonable and affordable monthly payments or, - Agree to pay under the income-Contingent Repayment plan, or

- income-Based Repayment plan

note: Avoid consolidating federal loans into private loans (will lose eligibility for special federal loan provisions)

Rehabilitation to get out of default

- FFEl or Direct loan rehabilitation (make nine monthly payments within 20 days of the due date during a period of 10 consecutive months)

modIFIed rePayment oPtIons For PrIvate loans

investigate Settlement or Compromise opportunities

After you’ve explored the possibility of loan cancellation, postponement or loan modification, consider whether settlement or compromise is a viable option.

settlement or ComPromIse oPtIons For Federal loans

• FFEl OR pERkins lOAns

- Department of Education can compromise on loans • DiRECT lOAns

- see Department of Education guidelines on www.studentloanborrowerassistance.org/

settlement or ComPromIse oPtIons For PrIvate loans

- negotiate with lender

it’s important to remember that regardless of whether your loans are federal or private, you’ll need to consider the tax consequences of a settlement, and you may want to seek some type of tax assistance. see iRs publication 4134. Consult Taxpayer Advocate, an independent system that helps taxpayers who have not been able to resolve problems through regular channels. Complete Form 911 or call 1-877-777-4778.

address/Challenge Collection actions

if your student loans are already in collection, you may elect to challenge the action.

• To challenge collection (tax refund intercept, wage garnishment, federal benefits intercept,

license revocation) seek legal assistance

• For collection agency issues see self-help packet, Collection Agencies and Your Rights:

Sending a “Cease Communication” Letter from www.studentloanborrowerassistance.org

• For possible legal claims, including Truth in lending violations for private loans, problem with

school, seek legal assistance

• For additional help, contact FsA Ombudsman of the Department of Education at

www.ombudsman.ed.gov

develop an action plan for Student Loan Repayment Solution

After reviewing the available student loan repayment options and eligibility requirements, take immediate action.

• Apply for pin

• locate and record student loan information, including outstanding balances

• visit www.studentloanborrowerassistance.org for more information

• Additional ______________________________________________________________________