You’ve gone to school, and now it’s time for the not-so-fun part: paying back your student loans. It’s important to understand your rights and repayment options, even before borrowing, so you can prevent defaulting on your loans.
Student loans fall into two categories: Federal Family Education Loan (FFEL) and Direct Loans (William D. Ford Direct Loan Program). Loans disbursed at San Jac before Summer 2010 are FFEL. In these cases, the lender is a financial institution, such as a bank or credit union. Loans disbursed during the Summer 2010 term and after are Direct Loans. With a Direct Loan, the lender is the Federal Government.
Regardless of which loan you have, it’s important to understand your rights and responsibilities.
Not sure where to begin?
Use our budget calculator to help determine your expenses and what you can afford to make for monthly payments.
As a student loan recipient, you are required to complete an exit counseling session. Exit counseling helps you to further understand your rights and responsibilities as a student loan borrower. Exit counseling is required when you:
Complete your exit counseling session online. San Jac will be notified electronically when you have successfully completed the
A hold will be placed on your San Jac student account if you do not complete an exit counseling session. This may affect your ability to make changes to your registration or request a transcript.
Student loan deferment is a way to temporarily stop making payments on your loans. While enrolled at San Jac, your loan may qualify for an in-school deferment. Please note that while in deferment, your loans may still accrue interest.
San Jac is partnering with the National Student Clearinghouse (NSC) to provide enrollment and degree verification to the U.S. Department of Education (USDE). For your loans to be placed in deferment, you must be enrolled at least six credit hours.
Enrollment information is sent electronically to the NSC two weeks after the term has started. Once the electronic file is processed, it takes 30 days for your account to be updated. The USDE will backdate your account to the start date of the term. It will also waive all past due payments and accrued interest for the term.
PLUS loans are for parents who take out loans for their children. For parents to be eligible for a deferment on your PLUS loan, your child must be enrolled at least six credit hours at San Jac.
This deferred status does not occur automatically. You must call the federal loan servicer and request to have the PLUS loan placed in a deferred status.
Private loan lenders can not obtain the enrollment information from the NSC. You must complete a student deferment or forbearance form two weeks after the term starts. Send completed forms to:
After you graduate, leave school, or drop below six credit hours, your loans enter a grace period. This one-time grace period lasts six months. Your repayment period begins the day after your grace period ends. At that time, your first payment will be due.
Your loan servicer will notify you with information about repayment. When it comes to repaying your student loans, you can select a plan that is right for your financial situation. Generally, you have anywhere from 10 to 25 years to repay your loans.
Our sample repayment plan gives you an example of how common repayment options may look.
With the standard plan, you will pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50 and you will have up to 10 years to repay your loans.
With this plan, your payments start out low and increase every two years. The length of your repayment period will be up to 10 years.
Under the extended plan, you will pay a fixed annual or graduated repayment amount over a period of up to 25 years.you must have more than $30,000 in FFEL or Direct Loan debt to qualify. Your fixed monthly payment is lower than it would be under the standard plan. However, you will ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.
Income Based Repayment (IBR)
Under IBR, the required monthly payment is capped at an amount that you can afford, based on your income and family size. You must submit annual income documentation to set your payment amount each year. Under this plan, loans can be forgiven for certain situations.
Income Contingent Repayment (ICR)
ICR plans are available for Direct Loans only.
Under this plan, your payment is calculated annually based on:
Income-Sensitive Repayment Plan
Income-sensitive plans are available for FFEL loans only.
With this plan, your monthly payment is based on your annual income. As your income increases or decreases, so do your payments. The maximum repayment period is 10 years.
Pay as you Earn Repayment Plan (PAYE)
Under the PAYE plan, your payments are usually 10 percent of your discretionary income. Payments are never more than the 10-year Standard Repayment Plan amount. Payments are calculated annually based on income and family size.
Revised Pay as you Earn Repayment Plan (REPAYE)
Under REPAYE, your payments are generally 10 percent of your discretionary income. Your payment can be more than the 10-year Standard Repayment Plan amount. Payments are calculated annually based on income and family size.
Under this program, you could combine all of your student loans under one lender and into one monthly payment. A consolidated loan can reduce monthly payments. However, the interest rate could increase and your repayment period may be extended.
If you are having trouble making payments, contact your student loan servicer right away. Your loan servicer will work with you to determine the best option for you. And don’t forget, we’re always here for extra help if you need it! Your options include:
If you stop making payments on your student loans, your account will become delinquent. A delinquent loan can result in late fees and affect your credit score. It will also result in a hold on your San Jac student account.
A student loan will go into default when you fail to make payments and your account is 270 days past due (delinquent). Once the loan is considered in default, the entire balance is due immediately. This includes the principal, interest, and collection fees.
If you default, your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government can all take action to recover the money you owe. Some consequences of default include:
You have three options to remove the default status:
More information for defaulted student loan debt can be found at MyEdDebt.ed.gov.
Here are some simple tips to help you manage your money wisely and be a responsible student borrower!
Get more information on budgeting by visiting the Federal Student Aid website.
The U.S. Department of Education releases official cohort default rates (CDR) to all schools. Loan default rates are calculated by measuring how many students are in default three years after they have graduated or stopped attending San Jac. The default rate only applies to federal loans, and does not include private and/or state student loans.
In 2018, a total of 1,223 San Jac students entered loan repayment. After three years, 10.1 percent, or 124 of those students, defaulted on their loans. Our National CDR for that year was 7.3. Our national CDRs for 2016 and 2017 were 10.1 and 9.7, respectively.
Why is this important? Knowing our CDR can help you analyze how well San Jac positions its students to pay off their loans after graduation. To put it in perspective, schools can get benefits if their national CDRs stay below 15. They can also receive sanctions or be prevented from participating in federal aid programs if their CDRs are 30 or above. So that tells us that our students are well-positioned to make payments on their loans.
Use these resources to find out more about your student loans.
San Jac Default Prevention Coordinator:
Nelnet Education Planning and Financing: 1-888-486-4722
MyEDDebt.gov Federal student aid’s website with information about defaulted loans.
Please note that FedLoan Servicing is no longer active.