Frequently Asked Questions

• Q. I cannot pay my loan. What should I do?

A. The first thing you should do is contact your lender, explain your situation and inform them you are unable to pay. They may suggest repayment options for you that will help you get over a difficult time, or suggest other long term solutions.

• Q. What does it mean to default on my loan?

A. After 270 days of being delinquent, the lender can make a claim with the guarantor of your loan stating that your are not making your scheduled payments and have therefore failed to meet the terms of your loan agreement. The guarantor will then start a process to pay any monies owing to your lender and will then start contacting you to collect on the loan. Through the federal government they will have a number of options in which to do this.

• Q. What is "claim pending"?

Your guarantor has not yet paid your lender. This means you may still be able to stop a default claim if you act quickly. A default will open up other options for you to pay the loan.

• Q. I don't understand deferment and the types available.

A. Simply put, a deferment gives you the opportunity to postpone or stop paying the loan. In total there are nine deferment options open to some students if they meet the eligibility requirements. Your lender can give you further information about deferments and provide you with any necessary
forms that may be applicable to your situation.

• Q. I don't understand forbearance and how it differs from deferment.

A. Forbearance is where your lender allows you to "temporarily" stop your payments. They may also approve reduced payments or let you delay making your payments. Is is completely up to the lender to decide to allow this and what part they will allow. It's important to note that they interest
on the monies owed will not stop and will continue to accrue over time. The interest will then become part of the capital and you'll be paying interest on the interest.

• Q. What is interest capitalization and how does it affect me?

When you have stopped making payments, yet the interest keeps being added, you will over time, be accruing interest. As this starts to increase the total amount of the loan, it will be considered part of the principal and you'll start paying interest on it.

• Q. What do I do when my lender doesn't receive my payment.

A. This is not an unusual situation and one usually does not find out about it until they receive a notice from the lender. If this happens, contact your lender immediately. Tell them the amount you sent, approximate date of when it was sent and the check number. Check with your bank to make
sure that the check did not clear. If it cleared, copy it front and back and forward all correspondence to your lender immediately.

• Q. Why am I being billed while in school. My lender says I am delinquent.

A. This can happen because you changed schools, you are still attending school past your graduation date or your in-school status dropped below half time. Providing proof of your current status to your lender will remedy the situation. Any time there is a change in your status you should always notify your lender so that they can make adjustments to your account, ensuring it is always current. By doing this there should be never be any problems with your in-school status.

• Q. Why are my parents being billed for my loans while I am in school?

A. A parent PLUS loan, for a dependent student, can trigger this unless the parent asks the lender for a deferment. The deferment should end six month after graduation or when the student is no longer attending at least half time. Anytime a student has a change in status the lender must be
notified in order to keep their records up to date, and not initiate billing procedures before their normal start date.

• Q. Can I change the day of the month my payment is due?

A. For the most part this is not allowed. Students can make payments at anytime though, thereby resolving this issue.

• Q. Can I prepay my loans. Is there any penalty associated with doing this?

A. Loans can be prepaid at any time whether you are in school or out of school. This helps to reduce interest and there is no penalty associated with prepaying the loan.

• Q. What is rehabilitation?

A. If your student loan is in default or delinquent you may be able to rehabilitate the loan. In most cases you will be required to make 9 monthly payments on time consecutively, before your account can be deemed current. At this time your lending institution will report to the different credit
bureaus that your loan is now current and no longer in default. This can also mean that you will be about to regain financial aid as well as cancellation benefits and deferment benefits. If you choose to use this option be sure to consult with your lending institution.

• Q. Why do I still receive bills after I have consolidated my loan?

A. As with any organization it simply takes a bit of time to process all records. Be sure that all the loans you consolidated were eligible for consolidation. Should you still receive bills contact the organization to get clarification as soon as possible.