Preparing to leave HCC

As a student loan borrower, here's how you can prepare:

COMPLETE EXIT COUNSELING

Exit Counseling | Federal Student Aid

Why complete exit counseling?

  • You are graduating or recently graduated
  • Review your payment options
  • What to do if you have difficulty making your payment(s)
  • Prevent the negative consequences of student loan default
  • Remember the importance of maintain a good credit score

 

UPDATE YOUR CONTACT INFO

Confirm the correct contact information for your loan provider. Make sure to use an email address other than your college Email, to ensure you keep access after graduation, use an email address that you will check regularly.

 

ACCESS NSLDS

https://nsldsfap.ed.gov/nslds_FAP/

The National Student Loan Data System (NSLDS®) database is the U.S. Department of Education's central record for student aid. It contains data from schools, guaranty agencies, the William D. Ford Federal Direct Loan (Direct Loan) program, and other U.S. Department of Education programs. The NSLDS database provides a centralized, integrated view of federal student aid loans and grants that are tracked through their entire lifecycle from aid approval through disbursement and repayment (if applicable).

 

FEDERAL LOANS TERMS & TIPS

Interest Rates:

Interest is a loan expense charged for the use of borrowed money. Interest is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.

  • A fixed rate indicates the loan had a set rate at the time it was made.
  • A variable rate can vary based on factors like when you received your loan and what type of loan you received.

 

Interest accrues on federal student loans, even when you're in school and during your grace period, if you have Direct Unsubsidized or PLUS loans.

Unlike other forms of debt, such as credit cards and mortgages, federal loans are daily interest loans, which means that interest accumulates every day.

The amount of interest that is added to your loan balance is called accrual. Interest accrues daily on your loan principal. Based on your outstanding total balance and the average weighted interest rate of all your loans, we can estimate how much interest on your loans is accruing.

The interest you're responsible for repaying depends on the type of student loan you have.

 

LOANS:

Direct Subsidized Loans

The government usually pays your interest (provides you an interest subsidy):

  • While you are enrolled at least half-time
  • During the grace period
  • During the deferment periods
  • During certain periods of repayment under the income-driven and pay as you ear repayment plans

 

Eligibility: undergraduate students with financial need

Interest rate: 2.75% for loans with a first disbursement date on or after June 30, 2020 and before June 30, 2021. Direct Subsidized Loans with a first disbursement date after June 30, 2013, may be subject to subsidy loss under certain circumstances. For Direct Subsidized Loans with a first disbursement date after June 30, 2021, and before July 1, 2014, you are responsible for paying the interest that accrues during the grace period.

Loan Fee: 1.057% for loans with a first disbursement date on or after September 2020.

Payments are required 6 months after you graduate or drop below half-time enrollment.

Loss of Subsidy: If you continue to be enrolled in any undergraduate program after you have received Direct Subsidized Loans for your maximum eligibility period, then (with certain exceptions) the interest that accrues on your Direct Subsidized Loans will not be paid by the government. 

 

Direct Unsubsidized Loans

During Direct Unsubsidized Loans interest is charged during all periods, even while you’re in school and in your grace period. Undergraduate students are eligible regardless of financial need.

Interest rate: 2.75% for loans with a first disbursement date on or after June 30, 2021.

Loan Fee: 1.057% for loans with a disbursement data on or after September 2021.

Payments are required 6 months after you graduate or drop below half-time enrollment.

 

Direct Consolidation Loans

You cannot refinance your federal student loans to get a lower interest rate, but you can consolidate all of your loans to get a rate that is the rounded, weighted average of your current interest rates. Consolidating can simplify payments, but also result in the loss of some benefits. If consolidation were to cause you to lose benefits associated with some of your loans, do not include those loans in your consolidation.

Most federal loan types are eligible for consolidation. The interest rate is the average weighted of the loans being consolidated, rounded up to the nearest one-eighth of one percent. This rate will be fixed for the life of the loan. The loan fee is 1.057% if disbursed between September 2020-Septemebr 2021. Payments are required within 60 days of your loan being disbursed; your servicer will notify you of the date your first payment is due.

 

WHEN DOES REPAYMENT BEGIN?

Repayment begins 6 months after you graduate. For example, if you graduated in December 2020, then your repayment will begin in June 2021. Your loan servicer will notify you of the exact date your repayment will begin.

 

CAN MY LOANS BE FORGIVEN?

There are several loan forgiveness options available, but most programs have very strict eligibility requirements and often require you to pay down your loans for many years before the remaining balance can be forgiven. Most federal student loan forgiveness options are tied to your employment. Some of the student loan forgiveness programs offered by the federal government include:

Public Service Loan Forgiveness (PSLF)

To qualify for PSLF, you must

  • be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization;
  • work full-time for that agency or organization;
  • have Direct Loans (or consolidate other federal student loans into a Direct Loan);
  • repay your loans under an income-driven repayment plan; and
  • make 120 qualifying payments (10 years of payments if made sequentially).

 

You can’t officially apply for PSLF until you’ve made 120 qualifying monthly payments. However, if you are or will be employed by a qualifying employer, we highly recommend that you use the PSLF Help Tool and submit a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF form) very soon after beginning employment.

Teacher Loan Forgiveness

You may be eligible for forgiveness of up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and/or Unsubsidized Federal Stafford Loans once if

  • you've been employed as a full-time, highly qualified teacher for five complete and consecutive academic years, and at least one of those years must have been after the 1997–98 academic year; and
  • you’ve been employed at an elementary school, secondary school, or educational service agency that serves low-income students (a "low-income school or educational service agency").


Additionally:

  • The loan(s) for which you are seeking forgiveness must have been made before the end of your five academic years of qualifying teaching service.
  • You must not have had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date that you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.

 

You apply for teacher loan forgiveness by submitting a completed Teacher Loan Forgiveness Application to your loan servicer after you have completed the required five consecutive years of qualifying teaching.

Forgiveness under the Income-Driven Repayment Plans

If you choose to repay your loans on one of the income-driven repayment plans, any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after the specified repayment period for your plan—usually 20 or 25 years.

Income-Based Repayment (IBR)

All loans made under the Direct Loan Program and the Federal Family Education Loan (FFEL) Program are eligible, except: Direct or FFEL PLUS Loans for parents, or Direct or FFEL Consolidation Loans that repaid a Direct or FFEL PLUS Loan for parents.

Revised Pay As You Earn (REPAYE) Repayment

All loans made under the Direct Loan Program are eligible, except for Direct PLUS Loans for parents. Borrowers with federal student loans from other programs (excluding PLUS Loans for parents) can consolidate them into the Direct Loan Program to qualify.

Pay As You Earch (PAYE) Repayment

All loans made under the Direct Loan Program are eligible, except for Direct PLUS Loans for parents. Borrowers with federal student loans from other programs (excluding PLUS Loans for parents) can consolidate them into the Direct Loan Program to qualify.

Income-Contingent Repayment

All loans made under the Direct Loan Program are eligible, except for Direct PLUS Loans for parents. If Direct PLUS Loans for parents are consolidated, they become eligible. Borrowers with federal student loans from other programs can consolidate them into the Direct Loan Program to qualify.

 

 

OTHER REPAYMENT PLANS

Standard Repayment

This plan allows you to pay the entirety of your loan via fixed payments (at a minimum of $50) over your loan term (10 years for most loans, but it is usually longer for consolidation loans). Not a good option for PSLF.

Graduated Repayment

Payments start low and gradually increase every two years. Your payment will never be less than the amount of interest that accrues between your payments and will never be more than three times greater than any other payment. You will repay your loans over 10 years (for most loans, but it is usually longer for consolidation loans). Not a good option for pslf.

Extended Fixed Repayment

This plan allows you to pay a fixed monthly payment over an extended period of 25 years. Not a good option for PSLF. If your payment is unaffordable, it increases your risk of delinquency and default. To maintain a low payment burden, the consumer financial protection bureau suggests your estimated loan payments should not exceed 8% of your gross salary.

Income-sensitive Repayment Plan

This plan is available to low-income borrowers who have federal family education loan (FFEL) program loans. The payments under this plan increase or decrease based on your annual income.

 

PAUSING LOAN PAYMENTS

Forbearance is an option for temporarily postponing or reducing loan payments if you do not qualify for a deferment. It allows you to temporarily stop making payments or reduce your monthly payment. But interest will continue to be charged, and if you do not pay it, it will be capitalized at the end of the forbearance period. 

A deferment allows you to temporarily stop making payments on your federal student loans. In most cases, you are not charged interest on subsidized loans during deferment. Interest will continue to be charged on your unsubsidized and PLUS loans, and on Direct Subsidized Loans that have lost interest subsidy. If you do not pay this interest during the deferment, it will be capitalized at the end of the deferment. 

 

HOW TO REDUCE YOUR LOANS

One of the best ways to reduce what you owe is to start payments while you’re in school or during the grace period. Even making small payments can help lower your loan balance and your monthly payment.

Another way to reduce your loan is to pay down your principal. You can ask your loan servicer to apply your early payment to your principal balance only, starting with the loan with the highest interest rate. Reducing your principal balance means interest accrues on a smaller amount, which saves you money overall.

 

YOU MAY BE CONTACTED BY THIRD-PARTY STUDENT DEBT RELIEF COMPANIES

Exercise caution when dealing with third-party student loan debt relief companies; the services that these companies typically provide are offered to borrowers free od charge through the U.S. Department of Education or your servicer. At no cost, the Department and the federal lean servicers can help you

  • Lower your monthly repayment plan
  • Change your repayment plan
  • Consolidate multiple federal student loans
  • Postpone monthly payments while you’re furthering your education or are unemployed
  • Get your loans out of default

 

Federal Loan Servicers

Phone Number

FedLoan Servicing (PHEAA)

1-800-699-2908

Granite State – GSMR

1-888-556-0022

Great Lakes Educational Loan Services, Inc.

1-800-236-4300

HESC/Edfinancial

1-855-337-6884

MOHELA

1-888-866-4352

Navient

1-800-722-1300

Nelnet

1-888-486-4722

OSLA Servicing

1-866-264-9762

ECSI

1-866-313-3797

Default Resolution Group (also known as Maximus Federal Services, Inc.)

1-800-621-3115 (TTY: 1-877-825-9923 for the deaf or hard of hearing)

 

 

COMPLETE GRADUATION & COMMENCEMENT STEPS

Prepare for graduation and the commencement ceremony, apply for graduation, and keep an eye on important dates by visiting, https://www.hccs.edu/resources-for/current-students/graduation/.

 

WITHDRAWING FROM HCC

Students must withdraw by the withdrawal deadline in order to receive a “W” on a transcript. Final withdrawal deadlines vary each semester and/or depending on class length, visit the online Academic Calendar, the HCC Registration Office, or any HCC advisor to determine class withdrawal deadlines. To more information on the HCC withdrawal policy, click here.

 

RESPONSIBILITIES ON YOUR STUDENT LOAN JOURNEY

What you are responsible for in your student loan journey?

Here are some examples of things you're responsible for when it comes to your student loans. This is not an exhaustive list, but includes some important things you should stay on top of:

  • Knowing the terms and conditions of your loans, including the need to pay off your loans even if you didn’t finish your academic program
  • Ensuring your school and servicer have your up-to-date contact information
  • Making your payments on time
  • Reaching out to your servicer if you’re worried about affording your payment

 

Before you took out your federal student loans, you signed a Master Promissory Note (MPN). The MPN is a legal document that explains the terms and conditions of your loan(s).

By signing the MPN, you promised to repay your loan(s) and any accrued interest and fees. Repaying your student loans is required, even if you

  • Don’t complete your program
  • Don’t complete the program within the regular time for program completion
  • Aren’t able to obtain employment upon graduation from your program
  • Are dissatisfied with or don’t receive the education or other services purchased from the school

 

What the US Department of Education is responsible for?

ED is the lender of your Direct Loans, which means it provided the funding for your federal student loans. ED is responsible for

  • maintaining StudentAid.gov, and providing customer assistance related to applications available on StudentAid.gov,
  • providing assistance with loan disputes via the Federal Student Aid Ombudsman, and
  • overseeing loan servicers that support you throughout your loan repayment period.

 

What your lender is responsible for?

A lender loans you money to pay for school, which you must pay back over time with interest. While loans made under the Federal Family Education Loan (FFEL) Program were in many cases made by banks, they are not considered private student loans. Loans made under the FFEL Program have the same protections and most of the repayment options as loans made under the federal Direct Loan Program.

The holder of your Direct Loans is the U.S. Department of Education (ED).

 

What your servicer is responsible for?

Your student loan servicer(s) is contracted by the U.S. Department of Education (ED) to handle payments and billing statements, repayment plan applications, and questions about your loan types. Your servicer is a private company and works on behalf of the federal government. You can trust calls and communications from your servicer.

Your servicer is responsible for

  • helping you with your student loans by answering questions, helping you compare your options, and helping you apply for repayment programs;
  • issuing billing statements and collecting your student loan payments; and
  • processing applications for federal loan programs.

 

What your school is responsible for?

  • helping you learn how much aid you have left and what types of aid you're eligible to receive;
  • determining your aid eligibility and financial aid offer;
  • distributing your aid, including your loans, to cover educational expenses; and
  • ensuring you complete exit counseling when you leave school, graduate, or drop below half-time enrollment