New Important news regarding loans
Subject: Special Direct Consolidation Loan Information – Short-Term Consolidation Opportunity Offered from January – June 30, 2012
On October 25, 2011, the Obama Administration announced several steps it is taking to increase college affordability by making it easier to manage student loan debt. Key initiatives include a “Pay As You Earn” repayment plan and a short-term consolidation opportunity that will be offered through the Department of Education (the Department) from January – June 30, 2012. The press release and an accompanying fact sheet are available at http://www.whitehouse.gov/briefing-room/statements-and-releases.
This Electronic Announcement is the first in a series of communications through which we will inform the financial aid community about the availability of Special Direct Consolidation Loans. At this time, we want to share basic process and eligibility information that our customer service centers will provide to borrowers who contact us about the availability of Special Direct Consolidation Loans. As other program-related guidance becomes available, we will post Electronic Announcements on the Information for Financial Aid Professionals (IFAP) website. All subsequent announcements on this topic will include the words “Special Direct Consolidation Loan Information” in the subject line.
Special Direct Consolidation Loans are not the same as traditional consolidation loans offered under the William D. Ford Federal Direct Loan (Direct Loan) Program. Only certain borrowers will be eligible for Special Direct Consolidation Loans, and eligible borrowers will apply through a new and different online process. In addition, Special Direct Consolidation Loans will only be available for a short period of time from January – June 30, 2012.
We have established a Special Direct Consolidation Loans page on our Student Aid on the Web site where we will post information for borrowers. This page is available at www.studentaid.ed.gov and can be easily accessed from a link under “Announcements” on the right side of the home page. The direct page URL is http://studentaid.ed.gov/PORTALSWebApp/students/english/specialconsolidation.jsp.
In addition to resources we provide for borrowers, we know that borrowers will reach out to their schools for information. We appreciate any assistance schools can provide and will ensure that schools are kept informed throughout the duration of the program.
Getting Started – Special Direct Consolidation Loan High-Level Summary
Through four basic questions, we present high-level summary information about the process, borrower eligibility, loan eligibility, and benefits associated with Special Direct Consolidation Loans that will be available from January – June 30, 2012. This summary information is further supplemented by the information available on our Special Direct Consolidation Loans web page.
How will the Special Direct Consolidation Loan Process work?
- Special Direct Consolidation Loans are not the same as traditional consolidation loans that borrowers can apply for today.
- Only certain borrowers will be eligible for Special Direct Consolidation Loans.
- Eligible borrowers will be contacted by one of four federal loan servicers starting in January 2012. Given the number of eligible borrowers, these contacts will occur over several weeks.
- The servicers that will contact eligible borrowers are FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae.
- The servicers will provide eligible borrowers with application instructions.
- After receiving application instructions from a servicer, eligible borrowers will apply through a new and different online process.
- Borrowers who may be eligible must not apply through the traditional Direct Consolidation Loan Web site (http://loanconsolidation.ed.gov).
What loans must a borrower have to be eligible for a Special Direct Consolidation Loan?
- At least one ED-held Direct Loan or ED-held FFEL loan and one commercially-held FFEL loan.
What loans are eligible for Special Direct Consolidation?
- Only commercially-held FFEL loans (subsidized, unsubsidized, PLUS, and consolidation).
- Commercially-held FFEL loans must be in grace, repayment, deferment, or forbearance.
- Commercially-held FFEL loans can be defaulted loans that have been rehabilitated.
- Commercially-held FFEL loans cannot be in default or subject to a bankruptcy proceeding.
What will a borrower gain by obtaining a Special Direct Consolidation Loan?
- One servicer and one payment, as opposed to one or more servicers with multiple bills and varying repayment requirements.
- For commercially-held FFEL loans that will be consolidated, a 0.25 percent reduction from each loan’s existing interest rate at the time of consolidation, plus the opportunity to receive an additional 0.25 percent interest rate reduction if automatic debit is chosen for repayment.
- For commercially-held FFEL loans with a variable interest rate at the time of consolidation, the conversion to a fixed interest rate at the lower percentage that will not change over time.
- No loss to previous time in repayment; it will count towards the repayment term for the new loan.
- No loss to previous Income-Based Repayment (IBR) payments; they will count towards the required repayment time for cancellation if the borrower remains in IBR.
- The commercially-held FFEL loans that will be consolidated will be eligible for discharge under the Public Service Loan Forgiveness Program.
About Loans
Borrowing student loans to finance your education is an investment in your future. There are times when paying back your loans can be difficult. These websites offer guidance as you attempt to repay your student loans.
10 steps to take if you can’t pay your student loan bills
Default Facts and Repayment Tips 8-11-10[1]
Please visit this site DirectLoanInformation for more information such as interest rates and calculators, repayment of loans, deferment and forbearance, cancellation and consolidation. For information about your specfic loans visit www.myedaccount.com.
When you Leave Sussex
Students who borrow loans and leave Sussex because of graduation, transfer or withdrawal must complete Student Loan Exit Counseling at NSLDS.
Who Must Complete Exit Counseling?
Students who have borrowed under the Federal Direct Stafford Loan Program must complete an “Exit Loan Counseling ” session during their final semester. Effective July 1, 2008, students who have borrowed under the Federal Grad PLUS Loan must also complete an “Exit Counseling” session. The U.S. Department of Education wants to insure that students review the terms of their loan and understand their rights and responsibilities under this program as they enter repayment.
This tutorial will walk you through some of the major sections of the NEW online exit counseling program on the National Student Loan Data System for Students (“NSLSDS”) website.
Federal Direct Stafford Loan Online Exit Counseling
- Students may complete an Exit Counseling session for the Federal Direct Stafford and submit completion information directly to the Department of Education.
- The session integrates NSLDS data to provide borrower specific loan summary and estimated payments
- Information can also be viewed in Spanish
Step 2: The Welcome Page includes options to tour the web site or immediately start the counseling session. The “Progress Box” on the right will track your progress through the site.
Step 3: The log in page will request your Social Security Number, Name, Date of Birth and Federal Student Aid PIN Number.
Step 4: Use the drop down menu and choose “New Jersey” and then “Sussex County Community College”
Step 5: You will then need to complete several short quiz pages on major concepts concerning loan repayment. You MUST answer each questions. The correct answers will be displayed after you hit the “submit” button.
Know Who Will Be Sending You A Bill: The Loan Summary Page will display all your federal Direct Stafford Loans loans that have been reported by every post-secondary school you have attended to the NSLDS system. You can get detailed loan information by clicking on the number link.
Please check this information for all your loans. On March 25, 2010, the U.S. House of Representatives and the U.S. Senate passed The Health Care and Education Affordability Reconciliation Act of 2010 (“HCEARA”-H.R. 4872) . This bill makes major changes in several federal student aid programs AND mandates that, effective July 1, 2010, all federal student loans (Stafford, PLUS, and Grad PLUS) will be originated through the Federal Direct Loan Program. The Family Federal Education Loan Program, which permitted private lenders to originate these loans, was eliminated effective June 30, 2010. Therefore, many of our students may have loans with different loan servicers.
Know Your Repayment Options: The Repayment Options Page displays:
- Sample repayment information for various debt amounts
- Monthly and Total Payments under different Repayment Plans . Pay particular attention to information about the Income Based Repayment Plan and Public Service Loan Forgiveness.
- Non-Consolidated and Consolidated Loan Payment Plan estimates .
Calculate Your Monthly Payments: The Estimating Payment Page features:
- The option to change your loan balance due and recalculate your payments (if you are continuing on to graduate school )
- Adjust your projected Federal Adjusted Gross Income (“AGI”), Marital Status, Family Size, Residence and recalculate your projected payments
Calculate a Budget: The Budget Calculator page assists borrowers in:
- Developing a budget
- Totaling monthly expenses
- Comparing expenses to expected salary
You are almost done!
Reference Page:References will only be contacted IF a borrower moves and fails to update his/ her address with the Department of Education. This information must be completed by the borrower. References have no legal liability for your loan. You will need to provide complete address information for three references (one should be your parents or another relative).
Borrowers will also be asked to provide the following optional information:
- Employer
- Driver’s License Number and Driver’s License State
Review Your Rights and Responsibilities one final time!
Congratulations! If you see this page, you are done! (Note: the following is a page is a test sample and not information on a “real” student)
Loan Forgiveness
Student loans can be forgiven either in whole or in part. Click on these websites for more information.
http://www.finaid.org/loans/forgiveness.phtml
http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp
The FSA Ombudsman works with federal student loan borrowers to resolve loan disputes or problems from an impartial, independent viewpoint. If you have a problem with a federal student loan that you have not been able to resolve through the normal process, contact the FSA Ombudsman at 877-557-2575 or Ombudsman.ed.gov.
