student loan repayment manual table of contents - Tufts University

Keep in mind that the Tufts Stafford Loan program ended effective June 30, 2008. During the 2008-09academic year, borrowers had to select their Stafford lender of choice who also offered borrower benefitson their federal loan products. Borrowers are encouraged to contact their loan servicers for these loans todetermine their borrower benefit programs. Again, these benefits stay with the loan provided the borrowermeets the criteria and the loan isn’t paid off through consolidation.Beginning with the 2009-10 academic year, Tufts University no longer participated in the Federal FamilyEducation Loan Program (FFELP) where students relied on private student loan lenders for their studentloans. That year, the university chose to participate in the William D. Ford Federal Direct Loan Programwhere funds are provided directly from the Federal government as opposed to the private sector.Beginning in the 2010-11 academic year, all colleges and universities in the country had to switch over tothe Federal Direct Loan Program. The FFELP program no longer exists yet any loans that remainoutstanding must obviously be repaid under the original terms of agreement outlined in the promissorynote. The borrower benefits, remember, are still tied to those loans. The Federal Direct Loan program alsoprovides borrower benefits. These are as follows:Borrowers receive an immediate origination fee rebate on Federal Direct Loans (.5%) and GradPLUS Loans (1.5%) upon the loan’s disbursement. The borrower retains the rebate provided theymeet the first 12 scheduled monthly payments on their loans. Should the borrower fail to meetpayments as scheduled, the amount of the rebate is charged back to the loan and added to the loan’sprincipal..25% Interest Rate reduction for ACH paymentsIt should be noted that effective for new loans borrowed after July 1, 2012, the only borrower benefit thatwill be offered by the US Dept. of Education (Direct Loans and Grad PLUS) will be the .25% interest ratereduction if the borrower opts for the ACH payment. Students that opt to consolidate their eligible loansbetween 1/1/2012 and 7/1/2012 will be able to receive an additional ¼% reduction on their consolidationloan. Note that borrowers are unable to consolidate until they are considered no longer enrolled in schoolat least half-time. Once borrowers consolidate, they will enter repayment immediately (within 45 days ofthe consolidation loan being approved).Private education loans may also carry borrower benefits and borrowers of these loans should contact theirrespective servicers for an outline of the criteria to receive these benefits.PrepaymentThere are no penalties for prepayment of any student loan program, federal, private or university includingconsolidation loans. If you wish to pay off your loan(s) in full, contact your lender to ask for the pay offamount. You should ask what date the pay off amount will be adjusted for interest and make payment infull prior to that date. When asked to do so, most lenders/loan servicers will give a borrower a “10-day payoff” amount, which will allow the borrower 10 days to make payment in full. When a loan is paid in full,your lender should send you the original promissory marked “Paid in Full.” Keep this copy for yourrecords.19