Indexed Adobe PDF (Spring 2011-Full Version) - SUNY Orange

Financial AidCHOOSING A REPAYMENT PLANYou will have a choice among several repaymentplans:• Standard ten-year repayment• Repayment extended to 25 years for those withover $30,000 worth of student loans• Graduated repayment with payments increasingover the years• Repayment based on incomeYou are free to change your plan at any time duringthe loan process.CONSOLIDATION OF MULTIPLE STUDENTLOANSEven if you have taken out student loans at othercolleges, they can all be consolidated, along with yourcurrent loan, into one loan with one monthlypayment. Consolidation will usually extend the loanrepaymentperiod, but note that such an extensionresults in additional interest costs. For additionalinformation on loan consolidation, see theconsolidation website athttp://www.loanconsolidation.ed.gov/.THE REPAYMENT PERIODThe length of the repayment period varies with theplans. If you don’t select any particular repaymentplan, you will automatically be put in the standardplan with fixed monthly payments for up to 10 years.This plan saves you the most money over time becauseit doesn’t have interest added during an extendedrepayment period. Another plan starts with lowrepayment amounts and slowly increases the amountover time. No matter what plan you are in, you canchange your plan at any time. Click on RepayingYour Loans at http://www.loanconsolidation.ed.gov/MAKING PAYMENTS ELECTRONICALLYInstead of mailing in a check every month, carefullytimed to meet the due date, you can opt for anelectronic debit account in which your bankautomatically make your monthly payments directlyout of your checking or savings account. Your firstrepayment bill will explain how to sign up for thisoption. A big advantage of making automaticrepayments is that there will be a reduction in yourinterest rate of 0.25% during any period in which yourpayments are made electronically.DIFFICULTY MAKING PAYMENTSIf you have trouble making your loan payments,contact the Direct Loan Servicing Center. You maybe able to arrange for deferment or forbearance onyour account.‘Deferment’ can postpone loan repayment for agiven time period if the student meets the followingqualifications: Student is enrolled at least half-time incollege, or student is unemployed and/or is eligible for‘economic hardship’, or student is in military service.In the case of a Subsidized Loan, interest does notaccrue during deferment.‘Forbearance’ is for those who do not qualify fordeferment, yet are temporarily unable to make loanrepayments. Arrangements can be made with theDirect Loan Service Center to extend the time tomake repayments, or stop making payments, ortemporarily make smaller payments.Deferment and forbearance are two kinds ofarrangements you can make with the Direct LoanService Center. Unless you make such anarrangement, you risk going into ‘default’—which hasserious consequences. (Students who are already indefault are not eligible for deferment or forbearance.)To apply for deferment or forbearance athttp://www.loanconsolidation.ed.gov/, Click onContact Us, then Manage Your Account, thenDeferment Request or Forbearance Request.Your loan becomes ‘delinquent’ when your paymentis not received by the due date. The Service Centerwill send you a reminder if your payment is late, and,if your payment is still not received, warning noticeswill be sent to you.NOTE: If you are delinquent, contact the DirectLoan Service Center immediately to learn how to bringyour account current. Late fees may be added and youraccount reported to one or more credit bureaus—butthis is better than going into default.PLUS LOANS FOR PARENTSThe Direct Loan program offers low-interest loansto students and parents and is funded by the USGovernment, not a bank. PLUS loans for parents aredesigned to help parent borrowers assist theirdependent children with their educational expenses incollege, year by year. https://studentloans.gov/myDirectLoan/index.action:APPLYING FOR A PLUS LOAN• Parent can apply online:www.parentplusloan.com/apply• Parents who have never taken out a Direct Loanbefore need to complete online a MasterPromissory Note (the online version is aneMPN) in which they commit to repay the loanhttps://StudentLoans.gov.• Parents who have previously taken out a DirectLoan for the same child do not sign anotherMPN28 www.sunyorange.edu Spring 2011