Frequently Asked Questions

Preventing default

Why am I getting a letter(s) about my student loan(s) from a different organization(s)?

Your lender (whether a bank or credit union, school, or the U.S. Department of Education) provided you with the borrowed student loan funds. Many times a lender will employ a servicer to assist in managing a student loan account, which functions can include:

  • Sending payment notifications
  • Processing the paperwork on payments, deferments and forbearances
  • Working with borrowers to determine the best repayment option

If you have missed payments, you may be hearing from organizations other than your lender(s) or servicer(s). Specifically, you may have received communication from the organization that guaranteed your federal student loan(s) to insure them against default—this could include a company like ECMC for Federal Family Education Loan Program (FFELP) loans, or the U.S. Department of Education for Direct Loan Program loans. It's also possible you have heard from a collection agency.

I've heard that being late on my student loan payments will affect my credit. How?

You are building a credit score through the repayment of your student loan(s). Your credit score is based on your financial history—the loan(s) you have, amounts you owe, on-time payments, etc... Read more >

You are building a credit score through the repayment of your student loan(s). Your credit score is based on your financial history—the loan(s) you have, amounts you owe, on-time payments, etc. If you are consistently late on your student loan payments, this may be reflected on your credit report, including missed payments and default.

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What's the difference between past due and default?

If you are not in a deferment or forbearance and you stop paying your federal student loan(s), you first become past due (aka delinquent) with your servicer(s)/lender(s) and may eventually... Read more >

If you are not in a deferment or forbearance and you stop paying your federal student loan(s), you first become past due (aka delinquent) with your servicer(s)/lender(s) and may eventually default on your federal student loan(s). Fortunately, there may still be options available to you.

Default can occur when your loan(s) is past due for 270 consecutive days or more. Defaulting on a loan can have several consequences.

Contact your servicer(s)/lender(s) to learn more. If you don't know who your servicer(s)/lender(s) is, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information.

Learn more about Why paying is important.

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Can I lower my monthly payment to an amount that works better for my budget?

If you have not defaulted on your student loans, work with your servicer(s)/lender(s) to discuss available options. Your servicer(s)/lender(s) can work with you to develop a repayment strategy... Read more >

If you have not defaulted on your student loans, work with your servicer(s)/lender(s) to discuss available options. Your servicer(s)/lender(s) can work with you to develop a repayment strategy and help you find a repayment plan that will fit your individual financial needs.

If you are delinquent on your student loan(s), you will first need to bring your loan(s) current before you can change your repayment plan. This can be done by paying the past due amount or requesting deferment or forbearance, if applicable, to cover the delinquent payments.

If you do not know who your servicer(s)/lender(s) is, go to the National Student Loan Data System (NSLDS), the central database for federal student loan information. You will find contact information for the servicer(s)/lender(s) of your federal student loans. If you have a private or state student loan(s), refer to the promissory note to find contact information for your lender(s).

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Can I get federal tax credit for paying tuition or interest on my student loan?

You may be able to take advantage of a number of federal tax benefits, including credits, deductions and savings incentives to offset your costs for college or career training. For more information... Read more >

You may be able to take advantage of a number of federal tax benefits, including credits, deductions and savings incentives to offset your costs for college or career training. For more information on these and other tax benefits, view our Possible Federal Tax Benefits at a Glance and consult a professional tax advisor.

Also, you will find details on all the tax benefits at the Internal Revenue Service website www.irs.gov.

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Where can I get a complete summary of my loan(s)?

If you know who holds your loan(s), contact each loan holder or servicer. If you are unsure who holds your loan(s), visit the National Student Loan Data System(NSLDS), which is the centralized... Read more >

If you know who holds your loan(s), contact each loan holder or servicer. If you are unsure who holds your loan(s), visit the National Student Loan Data System (NSLDS), which is the centralized database for federal student loans. If you have private or state loans, you will need to locate your promissory note or call your school for contact information.

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Should I consolidate my federal loan(s)?

With a Direct Consolidation Loan, you bundle one or more eligible federal loans—such as Stafford, Perkins or consolidation loans—into a new loan with new repayment terms. Some common... Read more >

With a Direct Consolidation Loan, you bundle one or more eligible federal loans—such as Stafford, Perkins or consolidation loans—into a new loan with new repayment terms. Some common reasons to consolidate your loan(s) are to:

  • Reduce multiple student loan payments into one single payment
  • Lower the interest rate (this is not guaranteed—interest could stay the same or even increase)
  • Lower your monthly payment

See our Loan consolidation section for more information.

To determine if consolidation is right for you, contact your servicer(s)/lender(s). They can help you understand the pros and cons of consolidation as it relates to your situation. If you do not know who your servicer(s)/lender(s) is, go to the National Student Loan Data System (NSLDS), the central database for federal student loan information. This website will have contact information for your lender(s).

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What can I expect my servicer(s)/lender(s) to do for me?

Your servicer(s)/lender(s) is there to help you, whether to explain your options or to make adjustments to your account as needed. You should know the difference between what your... Read more >

Your servicer(s)/lender(s) is there to help you, whether to explain your options or to make adjustments to your account as needed. You should know the difference between what your servicer(s)/lender(s) is required to do for you by law and what your servicer(s)/lender(s) is not required to do.

Your servicer(s)/lender(s) is required to honor your grace period, during which time you are not obligated to make loan payments. If you meet the eligibility requirements of a deferment—because you're in school or unemployed, for example—your servicer(s)/lender(s) is required to give it to you. If you qualify for a mandatory forbearance, your lender must grant it to you.

However, even if you qualify for a deferment or forbearance, you may still need to apply. Your servicer(s)/lender(s) won't necessarily grant you a deferment or forbearance unless you request it. Additionally, your servicer(s)/lender(s) is not required to grant you a forbearance for reasons of financial hardship if your situation does not meet their criteria. Finally, while you may ask your servicer(s)/lender(s) to change your due dates or give you a discount for setting up automatic payments, your servicer(s)/lender(s) is not required to honor either request.

For more information, visit our Working with student loan servicers.

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