IF YOU ARE RETURNING TO SCHOOL, MAKE SURE YOU FOLLOW THESE FEW STEPS!

 

Beautiful leaves falling, crisp cooler days, and thoughts of school….. Fall is the season that inspires many of us to return to school to continue our education.

Whether you are finishing your first degree or returning to pursue an advanced degree, please make sure your current student loans are placed back into an in-school deferment.

Although the actual forms must be submitted by the school you are attending, as the borrower, it is your responsibility to make sure the forms have been submitted by the school and processed by your current servicer. Too often the forms are either not submitted or not processed by the servicer.

As a result the loans become delinquent and the march toward default begins. I see this all of the time – borrowers who have been attending classes, signing new financial aid forms, thinking they are doing the correct things; however, they ignore those pesky late notes and e-mails from their servicer - assuming  that they keep getting them " in error” and then one day, BAM! Their accounts are in default, financial aid funds and pell grants are cut off!

Don’t let this happen to you.

If you have recently returned to school take a moment and a few simple steps to ensure your student loan accounts are in their correct status:

1. Call your servicer or sign in to your on-line account to verify the current status of all of your student loans. (Don't know who your servicer is?  Visit www.nslds.ed.gov to locate your student loans)

2. Make sure all previous student loans are in a deferment, as opposed to forbearance. What’s the big deal? If your loans are in forbearance, all of the loans will accrue interest.  In a deferment, the interest will only accrue on your unsubsidized loans; it will not accrue on your subsidized loans. Believe me, this can really add up over the life of a loan.

3. If the loans are not in a deferment, immediately contact or visit your school’s financial aid office.  Have the in-school deferment completed while you are there – you should sign the form. Ask for a copy of the completed form for your records.

4. In order to verify the situation has been corrected, repeat steps 1, 2 and, if necessary, step 3.

5. Stay enrolled ½ time or greater until you complete your next education step!  You will not have to worry about this process again!

OK – with that off of your mind, it is time to hit the books!

Back to School?

Public and private schools are back in session, fall is just around the corner, there's a hint of coolness in the air! This is the time of year that the ‘Back to School bug’ often bites us, and why not? It is a great time to either finish your degree or add additional credentials to your resume.

If you are thinking about heading back to college, be sure to get your student financial aid affairs in order. I am not talking about completing the FAFSA or being notified that your new loan has been processed. That’s the easy part. I am referring to those previous loans you used to pay for your education. Many students start a new program or enroll in a new school using federal student loan money. They are excited about their new educational path and everything is running smoothly when, suddenly, they are notified that their loan for the next term has been rejected. Why? They did not take care of their previous student loans and get their student financial aid affairs in order. One or more of their student loans defaulted and that results in a loss of Title IV funds. Over the years, I have worked with many students who had this unpleasant surprise. I have always found these situations very sad because they are preventable!

So, a few tips to follow before you hit the books again. If you are enrolling in college for a second (or third, fourth, fifth) time around, take a few moments to get your ducks in a row; you’ll be glad you did.

• Visit https://www.nslds.ed.gov/. The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. In one quick visit, you will find the financial institution that holds each of your loans, as well as the contact information for that bank or lender. The site should also show if the loans are in Repayment, Deferment or Forbearance. You may find a few surprises!
• Call each servicer or lender to make sure your loan payments are current or visit your account on their website. Remember, if you cannot make a payment to bring your loans current, you have other alternatives, including Deferment rights and Forbearance options. (For more information on your rights, visit http://www.cashcourse.org/swfc/SchoolPage.aspx.) However, be sure to get any delinquent issues resolved before you start classes. If your loans are in a delinquent status, many lenders will not process an In-School deferment and your loans will continue on the countdown to default.
• Make sure that your new school faxes a completed In-School Deferment to every lender holding one of your loans. Submitting the deferment form is a service that many schools offer, but it is your responsibility to make sure that the deferment form is received and processed.
• Finally, always open any mail that references student loans and is addressed to you. In today’s turbulent financial market, many student loans are being sold to other lenders or reassigned to other servicers. It takes 270 days of delinquency for a loan to default. You lender or servicer will be making numerous attempts to contact you before the default is processed.