Frequenlty Asked Questions

A: Yes, there are three income-driven options, the Pay As You Earn, Income-Contingent Repayment Plan and the Income-Based Repayment Plan. Call us to discuss which plan may be available to you.
Repayment of a Direct Consolidation Loan can begin 60 days after the loan is disbursed, or sooner. Your loan servicer will let you know when the first payment is due. The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan, your other education loan debt, and the repayment plan you select. Note: If any loan you want to consolidate is still in the grace period, you can delay entering repayment on your new Direct Consolidation Loan until closer to your grace period end date. You will indicate this when you apply, and the consolidation servicer will wait to process your application until the appropriate time.
A: Your federal student loans are considered in default after 270 days (nine months) of non-payment. Consequences include: Immediate increase in the interest rate of your student loans to 18.5 percent in addition to any collection agency fees. Immediate loss of your Title IV financial aid benefits. Negative reporting to the three credit bureaus, which could result in difficulties obtaining credit cards or home and auto loans. Withholding of your federal income tax return by the IRS to repay the defaulted student loans. Administrative wage garnishment of up to 25 percent of your paycheck.
We deal with these types of situation and most would be surprised that this situation represents 45% of our clients. This is not an issue and a enrollment counselor will be able to guide you on the right program to fit your specific needs. You will be able to be put back into good standing on all of your open loans.
Your loans will be held and funded at the Department of Education. They may at some point be passed back to your original servicer or a new servicer but will be enrolled and compliant on your new program .
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