Get Started with Student Loan Counseling
Are you unsure how to repay your loans when they come due?
Are you worried about being able to afford monthly student loan payments?
Are you falling behind on your payments and feeling anxious about the future?
We can help. During your counseling session, a CCCMD expert will assess your situation, determine your repayment options and guide you through any paperwork to apply for:
- Deferment or forbearance
- A modified repayment plan
- Loan consolation
- Forgiveness or cancellation
Student Loan Counseling FAQs
What happens during a student loan counseling session?
CCCSMD has a holistic approach to student loan counseling. This means we consider how your student loan debt fits into your financial situation and how it might affect your ability to reach personal finance goals. During a typical session, your Financial Advocate will help you evaluate your finances, set up a realistic budget, examine your current student loan obligations, explore student loan options that may be available to you, discuss student loan roadblocks or repayment issues, brainstorm other financial strategies that may help you increase income or reduce expenses, and provide meaningful resources.
All CCCSMD student loan Financial Advocates are certified by the National Foundation for Credit Counseling (NFCC). This accreditation program helps guarantee that our Financial Advocates are up-to-date on recent student loan trends and options. There is a fee of $99 for the counseling session. To schedule an appointment call 1-877-222-7435.
How can I tell who my lenders are and how much I owe?
It’s common to have multiple student loans with several different lenders. Try to locate the agreements you signed with each. These documents will list your lender, how much money you received, and your repayment terms. You also can obtain information about federal student loans from the National Student Loan Data System (www.nslds.ed.gov /1-800-433-3243). This system shows the contact information for your lender and/or servicer, the date your loan was disbursed, your current balance, and your repayment status.
If you have private loans, make sure to request and review a copy of your credit report. This will help you track down who and how much you owe. We are all entitled to receive one free credit report from each of the three major credit reporting companies (Experian, Equifax, and TransUnion) every 12 months. To order copies of yours, go to www.AnnualCreditReport.com. Finally, your college financial aid office may have a record of who your lenders or servicers are.
Why is the balance on my student loans a lot higher than when I first took them out?
Do you have unsubsidized student loans? The interest charges on these begin when the loan funds are disbursed – not when you payment grace period is over. If you waited until you left college to begin paying off these loans, you will find you already owe interest. Interest also continues to accrue on unsubsidized loans during deferment and forbearance. Note: Interest doesn’t accrue when subsidized loans and Perkins Loans are deferred.
Can you help me translate all the jargon?
Like most financial products, student loans rely on terminology to spell out how they work — their features, services, constraints, and payment protocol. The sooner you understand student loan terms, the better equipped you’ll be to manage yours and to take advantage of possible features and options. In this situation, knowledge equals power!
What are deferment and forbearance?
Deferment and forbearance are both options that may allow you to temporarily postpone paying on a student loan. How do they differ? Deferment is a borrower’s right, while forbearance is at the lender’s discretion. During deferment, interest on subsidized federal loans is waived, while interest on unsubsidized federal loans continues to accrue. During forbearance, interest always continues to accrue. To obtain either option, you first have to fill out a formal request. To qualify for a deferment, you must be enrolled at least half-time as a student or on active duty in the armed services, be unemployed or suffer other economic hardship, have a temporary disability or be in rehabilitation for a disability.
Does it make sense to defer payment on my loans as long as possible?
Probably not. Deferment and forbearance options should only be used in times of true need, and are temporary options. They generally will only delay payment for up to one year. During this time, interest may continue to add up. This means you ultimately will owe a lot more. Private loans may also charge a fee for deferment or forbearance.
What is income-based repayment?
Income-based repayment is a term that applies to specific repayment plans available through the William D. Ford Federal Direct Loan Program and the Federal Family Education Loan Program. These repayment plans are called Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay as You Earn (REPAYE), Income-Contingent Repayment (ICR), and the Income Sensitive Repayment Plan (ISR).
The Income-Based Repayment (IBR) is the most common of the four programs. Under this approach, the IBR calculator considers your income, family size, and state of residence to calculate your IBR monthly payment amount. If that amount is lower than the monthly payment you would be paying using a standard 10-year repayment plan, then you are eligible to repay your loans through IBR. IBR calculations cover a 12-month period. In other words, your monthly payment adjusts annually and you must submit documentation to stay in the program. IBR may be helpful if you lack to means to make your student loan payments. However, it isn’t right for everyone. By paying a reduced amount, you end up re-paying longer and the total cost might exceed what you would have using a 10-year repayment program. To learn more about the Income-Based Repayment programs, visit IBRinfo.org.
How can I have my student loans forgiven?
You may be able to receive forgiveness if you cannot afford to complete your course of study. Death and permanent disability also may result in full forgiveness. Some federal loans allow full or partial forgiveness through the Teacher Loan Forgiveness program if you teach five consecutive, complete years at a designated Title I school. The Public Service Loan Forgiveness program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. This may include serving as a volunteer for a government program (i.e., VISTA or Peace Corps), working in health care or law enforcement, or participating in the armed services. Your student loan lender or service provider ultimately decide if your loan can be forgiven.
What is student loan default?
Default is the failure to make student loan payments or otherwise meet the terms of the promissory note you signed. A student loan is considered to be in default when it’s more than 270 days overdue. This is a serious matter, because default stays on your credit history indefinitely and may ruin your credit score. Defaulting may negatively affect your ability to buy or rent a home, purchase a car, or even qualify for certain types of jobs. It also leaves you ineligible for deferment, alternative repayment plans, new student loans or grants. These consequences may likewise affect parents if they co-signed on a defaulted loan. Borrowers sometimes think bankruptcy will solve their problems; however, student loan debt usually can’t be discharged through Chapter 7 bankruptcy. Student loans can be included in a Chapter 13 repayment plan but must be repaid in full.
What should I do if I can’t afford to make monthly payments on a student loan?
If you’re having trouble making your student loan payments, contact your loan servicer immediately to discuss possible options. Don’t ignore the problem. If you wait, you may damage your credit score and reduce the options that are open to you. Look for ways to tighten your budget and increase your income. Also, consider seeking help from an NFCC Member Agency student loan Financial Advocate such as CCCSMD. We can help you evaluate your financial situation, set up a realistic budget, and examine student loan options that get you back on track and develop skills that help you become more financially secure.