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 Pennsylvania Highlands Community College can assist you with the Federal Stafford Loan, for more information on the Federal Stafford Loan, please click here. Below you can find general information on federal loans.


Loan Repayment

When you borrow money for your education, you sign a promissory note legally obligating you to repay the loan according to stated terms and conditions. When the time comes for repayment, usually after your education is complete, meeting your student loan obligation promptly helps you earn a good credit rating, which follows you throughout your life.

If you don't repay your loans, you will suffer serious consequences.

  • You will be ineligible for future financial aid.
  • You may not be able to obtain more credit, (i.e., to buy a car or house).
  • You may be turned down for a credit card.
  • You will forfeit your tax refunds.
  • Your employer can be ordered to garnish your pay (i.e., withhold what you owe from your paycheck).
  • You will be sued and will owe collection fees and attorney fees, in addition to repaying your loan.

Remember, you must repay your student loans, EVEN IF

  • You don't graduate or otherwise complete your education.
  • You can't find a job after graduation.
  • You aren't satisfied with the education you received.

Grace Period

After you graduate, leave school, or drop below half-time enrollment (less than 6 credits), you have a grace period (a period of time before you have to begin repayment). The grace period will be six months for a Federal Stafford Loan (If you’re a parent reading this and you have a PLUS Loan, you don’t have a grace period—repayment generally must begin within 60 days after the loan is fully disbursed.)

Know your Loan Information

  • Total amount borrowed
  • Lender and servicer of your loans
  • When your grace period ends
  • Amount of payments
  • Payment due dates

The U.S. Department of Education’s National Student Loan Data System (NSLDS) contains the status of your loans, balance amounts, and the agency who services your student loans. The agency that services your student loans is where you will be sending payments. To view this information, log on to www.nslds.ed.gov


Loan Forgiveness

In some circumstances such as certain kinds of teaching service and total and permanent disability, a student may have their obligation to repay their federal student loan removed. For more information about forgiveness, cancellation or discharge of federal student loans, please click here.

Having Trouble Making Payments?

If you have having trouble making payments, contact your loan servicer immediately!!!

They have several options that may help. You may qualify for a deferment or forbearance. There are also several different repayment plans that may lower your monthly payment.


Deferment

A deferment is an approved temporary suspension of loan payments based on certain events or criteria. A deferment enables borrowers under certain conditions to postpone loan repayment for specified periods of time. You must apply for a deferment through your loan servicer. If you have a subsidized Stafford Loan or Perkins Loan you will not accrue interest during a deferment. If you have an unsubsidized Stafford Loan you are responsible for the interest during the deferment. You can make interest payments or choose to have the interest capitalized. You must continue to make payments on the loan until you are notified that the deferment has been approved.
Deferments can be granted for students who are:

  • Enrolled at least half time at a postsecondary school
  • Studying in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled
  • Unable to find full time employment
  • Experiencing economic hardship

Forbearance

Forbearance is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. You can receive forbearance if you’re not eligible for a deferment. Unlike deferment, however, interest accrues, and you’re responsible for repaying it. Forbearance is granted in increments of one year. You must apply for forbearance with your loan servicer. You must continue to make loan payments until you have been notified that the forbearance has been granted.


Loan Consolidation

Loan consolidation is a debt management tool to allow you to pay off multiple student loans with one new consolidation loan. Loan consolidation allows you to extend your repayment period from 10 years up to 30 years depending on the amount of money you have borrowed.

Advantages of Consolidation

Loan consolidation has many advantages:

  • A fixed interest rate calculated as a weighted average of your individual loan interest rates rounded up to the next higher 1/8 of a percent.
  • If you consolidate during your grace period you will also be eligible for an interest rate reduction of .60%.
  • Multiple payments will be condensed into one payment to one servicer.
  • Your monthly payments will be smaller because the repayment term is extended.

Disadvantages of Consolidation

There may be some disadvantages to consolidation including:

  • A longer repayment term will increase the amount of interest you pay over the life of the loan.
  • You may also lose some deferments and Stafford Loan benefits. Some deferments that are available with a Stafford Loan do not carry over to a consolidation loan.
  • Be sure to check your eligibility for loan forgiveness programs, as you may lose these options when consolidating.

When considering consolidation, it is best to discuss all of these points with the loan servicer or lender you are consolidating with.

Eligibility

To be eligible for loan consolidation you must fit the following criteria.

  • Must be in repayment or grace period
  • PLUS loan borrowers can consolidate at any time once fully disbursed
  • Must have only one application pending

Eligible Loans include:

  • Federal Stafford Subsidized or Unsubsidized Loans
  • Federal PLUS Loans
  • Federal Perkins Loans
  • Federal Supplemental Loans for Students (SLS)
  • Federal Insured Student Loans (FISL)
  • Health Professions Student Loans
  • Nursing School Loan
  • Health Education Assistance Loans
  • Consolidation Loans*

*Existing Consolidation Loans are only eligible if you have at least one other eligible loan.

Ineligible Loans

Private or Alternative Loans are not eligible for consolidation. Other types of personal debt, including credit cards and car loans cannot be included in a consolidation loan.

How to Apply

To apply for a consolidation loan, contact your loan servicer or lender.


Repayment Plans

Borrowers may select or change their repayment plans at any time by contacting their loan servicer. Review the repayment plans below.

Overview of Direct Loan and FFEL Program Repayment Plans

 

Repayment Plan

Eligible Loans

Monthly Payment and Time Frame

Monthly Payment and Time Frame

Standard Repayment Plan

Direct Subsidized and Unsubsidized Loans

Subsidized and Unsubsidized Federal Stafford Loans

All PLUS loans

Payments are a fixed amount of at least $50 per month.

Up to 10 years

You'll pay lessinterest for your loan over time under this plan than you would under other plans.

Graduate Repayment Plan

Direct Subsidized and Unsubsidized Loans

Subsidized and Unsubsidized Federal Stafford Loans

All PLUS loans

Payments are lower at first and then increase, usually every two years.

Up to 10 years

You'll pay more for your loan over time than under the 10-year standard plan.

Extended Repayment Plan

Direct Subsidized and Unsubsidized Loans

Subsidized and Unsubsidized Federal Stafford Loans

All PLUS loans

Payments may be fixed or graduated.

12 - 25 years

Your monthly payments would be lower than the 10-year standard plan.

If you are a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.

FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans.

For example, if you have $35,000 in outstanding FFEL Program loans, and $10,000 in Direct Loans, you can use the extended repayment plan for your FFEL Program loans, but not for your Direct Loans.

For both programs, you must also be a new borrower as of Oct. 7, 1998.

You'll pay more for your loan over time than under the 10-year standard plan Repayment Plan.

Income-Based Repayment Plan (IBR)

Direct Subsidized and Unsubsidized Loans

Subsidized and Unsubsidized Federal Stafford Loans

All PLUS loans made to students

Consolidation Loans (Direct or FFEL) that do not include consolidated PLUS loans made to parents

Your maximum monthly payments will be 15% ofdiscretionary income, the difference between your Adjusted Gross Income and 150% of the poverty guideline for your family size and state of residence (conditions apply).

Up to 25 years

You must have apartial financial hardship.

Your monthly payments will be lower than payments under the standard plan.

You'll pay more for your loan over time than you would under the 10-year standard plan.

If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments and 25 years have passed, any outstanding balance on your loan may be canceled.

Income-Contigent Repayment Plan

Direct Subsidized and Unsubsidized Loans

Direct PLUS Loans made to students

Direct Consolidation Loans

Payments are calculated each year and are based on your annual income*, family size, and the total amount of your Direct Loans for up to 25 years.

* If you are married, your spouse's income is included.

Your monthly payments will be lower than the standard repayment plan.

You'll pay more for your loan over time than under the 10-year standard plan.

If you do not repay your loan after 25 years under this plan, the unpaid portion will be forgiven.

You may have to pay income tax on the amount that is forgiven.

Income-Sensitive Repayment Plan

Subsidized and Unsubsidized Federal Stafford Loans

FFEL PLUS Loans made to students

FFEL Consolidation Loans that do not include a PLUS Loan made to parents

Your monthly payment is based on annual income.

Your payments change as your income changes.

Up to 10 years

Your monthly payments will be lower than payments under the 10-year standard plan.

You'll pay more for your loan over time than you would under the 10-year standard plan.

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