Central Penn College - Financial Literacy

Central Penn College

 

Financial Literacy

Central Penn College is committed to our students and the successful repayment of their student loans. We want our students to understand the importance of repaying their student loans and withholding their Master Promissory Note (MPN) obligation. We do this through a comprehensive default management plan that includes quarterly student loan and personal finance presentations, exit counseling packets, and grace period postcards. Once a student enters their grace period (6 month period of time after a student withdraws, graduates, or drops below half-time), we send them an exit counseling packet that includes a letter with instructions on how to complete the federally required Direct loan exit counseling (Academic records will be on hold until this is completed), a “Loan Repayment Guide”, and an overview of their student loan portfolio. Once in repayment, students are encouraged to contact Daniel Guerrisi by phone (717-728-2367) or email for any questions or concerns they have about their student loans.

Once you enter repayment, your federal loan servicer will send you a welcome letter informing you of your first due date, repayment plan, and monthly payment. If you do not receive this letter, please contact Daniel Guerrisi.

If you are interested in the repayment options available to you, you can view these options online. The Department of Education offers details explanations of the repayment plans available to Direct loan borrowers and even offers an online calculator to see what you can expect your monthly payments to be on these plans. 

Visit the National Student Loan Data System (NSLDS®), to view your federal student loan portfolio. You can also see who is servicing your loans and view their contact information on this website. You will need your FSA ID to access this information. If you don’t have an FSA ID, you will have to create one.

Federal loan servicer’s are the organizations assigned by the Department of Education to handle the billing and repayment of Direct federal student loans. These loan servicer’s main goal is the successful repayment of your student loans. They will assist and answer any questions you might have about repayment plans, deferment and forbearances, loan consolidation, and Public Service Loan Forgiveness (PSLF®)

Servicer Phone Number
Primary Federal Direct Loan Servicers
Nelnet (888) 486-4722
Great Lakes (800) 236-4300
Navient (Formerly Sallie Mae) (800) 722-1300
Fedloan (800) 699-2908
Regional Federal Direct Loan Servicers
Aspire Resources (855) 475-3335
Cornerstone (800) 663-1662
ESA/EdFinancial (855) 337-6884
Granite State (888) 556-0022
MOHELA (888) 866-4352
OSLA Servicing (866) 264-9762
VSAC Federal Loans (888) 932-5626
FFEL (Federal Family Education Loan) Servicers*
AES (American Education Services) (800) 233-0557
ACS (800) 835-4611

*These are older student loans taken out before Jun 30, 2010 that have a lender (bank, commercial lender or credit union) and are federally guaranteed by the Department of Education. This program was replaced by the Federal Direct Loan program and as of June 30, 2010 you can no longer take out a loan under the FFEL program.

Default means you have failed to make your required payments on a student loan according to the terms of your promissory note (the binding legal document you signed at the time you took out your loan). Once your loans reach 270 days past due, they are in default. You then have until 360 days to get them out default before they are transferred to a default collection agency. 

PREVENTING DEFAULT

The number one way to prevent your loans from default is by communicating regularly with your loan servicer.  They will do whatever they can to ensure that your loans do not default. However, they aren’t much help if you do not communicate with them. If you are unsure who is servicing your loans, you can find out by logging on to the National Student Loan Data System (NSLDS®)

CONSEQUENCES OF DEFAULT

You are responsible for repaying your student loans even if you do not graduate, have trouble finding a job after graduation, or if you are not satisfied with your education. If you do not make any payments on your student loans for over 270 days and do not make special arrangements with your lender to get a deferment or forbearance, your loans will go into default.

Loan default can result in the following consequences:
  • Your entire outstanding loan balance becomes due and payable immediately.
  • Your default will be reported to national consumer reporting agencies and will affect your ability to obtain other consumer credit for up to seven years.
  • Your federal and state income tax refunds or other government benefit payments may be withheld.
  • You will lose deferment, loan forgiveness, and repayment options.
  • Your wages may be garnished.
  • You will be ineligible to receive any further federal and state financial aid.
  • You may not get hired for certain jobs where they require credit checks.
  • You may lost or be denied a state professional license.
  • As a last resort, the Department of Education could take you to court and demand payment. 
  • You may be sued.

GETTING OUT OF DEFAULT

There are three ways you can get out of default:

  • Loan Repayment
    • Pay off the remaining balance and any additional fees assessed to the loans
  • Loan Consolidation
    • A defaulted federal student loan may be included in a consolidation loan after you’ve made arrangements with ED and made several voluntary payments (contact your school for information about making payments on a Perkins Loan). Usually, you would be required to make at least three consecutive, voluntary, and on-time payments prior to consolidation.

  • Loan Rehabilitation
    • Another option for getting your loan out of default is loan rehabilitation. To rehabilitate your Direct Loan or FFEL Program loan, you and ED must agree on a reasonable and affordable payment plan. (Remember, contact your school for your Perkins Loan.)Your loan is rehabilitated only after you have voluntarily made the agreed-upon payments on time and the loan has been purchased by a lender. Once your loan is rehabilitated, you may regain eligibility for benefits that were available on your loan before you defaulted. Those benefits may include defermentforbearance, a choice of repayment plans, loan forgiveness, and eligibility for additional federal student aid. After rehabilitation, your monthly payment may be more than the amount you paid while you were rehabilitating your loan. Collection costs may be added to your principal balance, increasing the total amount you owe. Delinquencies (late payments) reported before the loan defaulted will not be removed from your credit report.

Paying for your student loans

There are several ways you can make payments towards your federal student loans:

  • By mail - Must be a check, do not mail cash
  • Over the phone
  • Online - Create an account through your federal loan servicer
  • Direct Debit - Automatically debits your account each month, and receive a .25% interest rate deduction.

Repayment Plans

Federal student loans offer a variety of different repayment plans to choose from:

  • Standard
    • This repayment plan saves you money over time because your monthly payments may be slightly higher than payments made under other plans, but you’ll pay off your loan in the shortest time. For this reason, you will pay the least amount of interest over the life of your loan.

  • Graduated
    • If your income is low now, but you expect it to increase steadily over time, this plan may be right for you.

  • Extended
    • If you need to make lower monthly payments over a longer period of time than under plans such as the Standard Repayment Plan, then the Extended Repayment Plan may be right for you.

  • Income Driven Repayment
    • Income-driven repayment plans are designed to make your student loan debt more manageable by reducing your monthly payment amount. If you need to make lower monthly payments, one of the three following income-driven plans may be right for you.

Postponing Payments (Deferment or Forbearance)

Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your federal student loan payments. Postponing or reducing your payments may help you avoid default. You’ll need to work with your loan servicer to apply for deferment or forbearance; and be sure to keep making payments on your loan until the deferment or forbearance is in place.

Direct Loan Consolidation

Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. If you are interested in applying for a Direct Loan Consolidation, you can apply online.

Loan Forgiveness/Cancelation/Discharge

If you work full-time in a public service job, you may qualify for Public Service Loan Forgiveness. Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by a certain public service employer.

Questions?

We're Here To Help!

Contact the Financial Aid office at (800) 759-2727 or email LoanTips@centralpenn.edu

Public Service - You may qualify for loan forgiveness. Learn More - Visit MyFedloan.org/PSLF.

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