Edfinancial Services

I can't make my payments - what should I do?

2007-11-26T12:10:00.000-08:00

You have a few options:

Repayment Plans
Federal student loans come with different types of repayment options to help you manage your debt. Most loans will enter repayment on level, or standard repayment, which means you pay the same amount each month for the full term of your loan. Graduated repayment allows you to being repaying your loans at a reduced amount, and every two years the payment increases as you become more settled in the real world. Extended repayment gives you a smaller payment by spreading your debt over a longer period of time. Income sensitive repayment bases your payment on a percentage of your income. You can learn more about these repayment options and see some examples on our website.

Deferment
Deferment puts your student loan payments on hold for period of time due to specific circumstances. If you have subsidized Stafford loans, the government will pay the interest on your loan(s) during a deferment. For other federal loans (unsubsidized Stafford, PLUS, GradPLUS, and unsubsidized Consolidations), interest will accrue during deferment.

Forbearance
Forbearance is an option available to most people who do not qualify for a deferment, and it allows you to temporarily suspend or reduce your payments. It will give you some payment relief, but the interest will continue to accrue regardless of your loan type. If you are financially unable to make your student loan payments, you may be eligible for forbearance.

We've listed some of the more popular types of deferment and forbearance below, but there are others that you may be eligible for. Use our interactive Form Selector to see which type of deferment or forbearance is right for you.

Economic Hardship Deferment
An Economic Hardship Deferment requires copies of your most current pay stubs showing your monthly income. If not employed, and not registered with an unemployment office, you may apply for an economic hardship deferment, but you must indicate that you are not working full time and have zero income. This deferment will be placed on your account for one year.

Click here to open the form as a PDF.

In-School Deferment
You can receive In-School Deferment only after your school verifies your enrollment on at least a half-time basis. The school must state your enrollment status and the dates of enrollment. You can download the deferment form on our website, fill it out, and have the registrar’s office certify and return it to us. We will retroactively date the deferment to the beginning date the school provides. It takes approximately two business days for the deferment to take effect in our system. Once the deferment is applied, we will notify you by mail that we have updated your account.

Click here to open the form as a PDF.

Unemployment Deferment
An Unemployment Deferment requires that you be registered with your local unemployment office (you do not have to be receiving benefits) and that you submit a current copy of the registration with the deferment. This deferment lasts for six months, and at the end of six months, you must fill out the form again and re-register with the unemployment office to extend the deferment.

Click here to open the form as a PDF.

Temporary Hardship Forbearance
If you are not eligible for a deferment, you may request a Temporary Hardship Forbearance. This option does not require any form to be submitted and can be placed on your account for one up to one year, or the date you indicate. You have three years of Temporary Hardship Forbearance on each federal loan you borrowed, so use your time wisely.

Interest accrues during forbearance regardless of your loan type. We will notify you quarterly of the interest that has accrued, and you have the option of paying that interest any time during the forbearance. You can also make principal payments while you are on forbearance without altering your forbearance status. Please keep in mind that any unpaid interest on your loans will be capitalized (added to the principal balance) at the end of the forbearance.

If you would like to request forbearance, contact us through our website. You must state the beginning and ending date of your forbearance; we can also retroactively date the forbearance to cover delinquency. If your loans are delinquent and you are unsure of the date to request, ask that the forbearance begin from the date of delinquency. The ending date you request cannot be more than 12 months from the beginning date. For example, if you request your forbearance to begin on March 5, 2008, the latest end date you can request would be March 4, 2009.

Education Related Deferment

2007-11-26T13:30:00.000-08:00

This deferment postpones payments for borrowers who are engaged in a full-time course of study in a Graduate Fellowship program, engaged in a full-time Rehabilitation Training program, engaged in an Internship/Residency program or teaching in a designated Teacher Shortage Area.

Click here to open the form as a PDF.

*NOTE: When applying for the Internship/Residency deferment, use this form only if all of your outstanding Federal Family Education Loan (FFEL) Program loans were made on or before 7/1/93 or if a FFEL Program loan was made on or after 7/1/93, you had outstanding FFEL Program loans that were made before 7/1/93. If you are a Federal PLUS Loan borrower, use this form only for PLUS loans that were made before 8/15/83.

*NOTE: When applying for the Teacher Shortage Area deferment, use this form only if you are a Federal Stafford or SLS borrower whose first FFEL Program loan was made on or after 7/1/87, and before 7/1/93, or if you had an outstanding balance on a loan obtained on or after 7/1/87, and before 7/1/93, when you obtained a loan on or after 7/1/93. If you are a Federal PLUS Loan borrower you are not eligible for the Teacher Shortage Area deferment.

Economic Hardship Deferment

2007-11-26T13:31:00.000-08:00

This deferment postpones payments during times of financial difficulty for a period of up to one year at a time, and the maximum total deferment time is three years. There are numerous ways to qualify, such as if you are currently on a deferment with Direct or Perkins, receiving federal or state public assistance, serving in the Peace Corps or if you meet specific income criteria. To qualify, complete and return the form, and provide supporting documentation dated within 90 days of your requested start date.

Click here to open the form as a PDF.

*NOTE:
Use this form only if all of your outstanding Federal Family Education Loan (FFEL) Program loans were made on or after 7/1/93 and when your first FFEL Program loan was made on or after 7/1/93, you had no outstanding FFEL Program loans that were made before 7/1/93.

PLUS Borrower with Dependent Student

2007-11-26T13:32:00.002-08:00

This deferment postpones payments for parent loans while the student for whom they borrowed a PLUS loan is still a dependent and is either enrolled full-time at an eligible school, enrolled at least half-time at an eligible school or is engaged full-time in a rehabilitation training program.

Click here to open the form as a PDF.

*NOTE:
Use this form only if you have an outstanding balance on a Federal Family Education Loan Program Loan that was made before 7/1/93, or had a balance on a loan that was made before 7/1/93 at the time you obtained a loan disbursed on or after 7/1/93.

Parental Leave / Working Mother Deferment

2007-11-26T13:33:00.000-08:00

This deferment postpones payments for a borrower who qualifies for Parental Leave or Working Mother eligibility criteria.

Parental Leave is defined as a borrower who:

Is pregnant, caring for a newborn child (a child less than six months of age), or caring for a newly adopted child
Is not working full-time or attending school during the deferment period; and
Has been enrolled in school at least half-time within the six-month period preceding this deferment.

A Working Mother is defined as a borrower who:

Has entered or reentered the workforce within one year preceding this deferment;
Is working full-time in a position earning not more than $1 per hour above the federal minimum wage; and
Is the mother of a preschool-age child who has not yet enrolled in the first grade or a higher grade in elementary school.

Click here to open the form as a PDF.

*NOTE: When applying for the Parental Leave deferment, use this form only if all of your outstanding Federal Family Education Loan (FFEL) Program loans were made on or before 7/1/93 or if a FFEL Program loan was made on or after 7/1/93, you had outstanding FFEL Program loans that were made before 7/1/93. If you are a Federal PLUS or Federal Consolidation Loan borrower, you are not eligible for the Parental Leave Deferment.

*NOTE: When applying for the Working Mother deferment, use this form only if you are a Federal Stafford or SLS borrower whose first FFEL Program loan was made on or after 7/1/87, and before 7/1/93. If you are a Federal PLUS or Federal Consolidation Loan borrower, you are not eligible for the Working Mother Deferment.

Public Service Deferment

2007-11-26T13:34:00.000-08:00

This deferment postpones repayment for borrowers who are:

On active duty in the Armed Forces
Serving full-time in the Commissioned Corps of the Public Health Service
Serving in the Peace Corps
A full-time paid volunteer in the Action Programs
A full-time paid volunteer for a tax-exempt organization
On active duty in the National Oceanic and Atmospheric Administration (NOAA)

Click here to open the form as a PDF.

*NOTE:
You must have a loan that was disbursed prior to 7/1/93 to be eligible for this deferment.

In School Deferment

2007-11-26T13:35:00.000-08:00

This deferment postpones repayment while you are attending a Title IV school on at least a half-time basis. A Title IV school is one that grants federal funding (i.e. Pell grants, Stafford Loans, etc.). You can check here to verify that your school is a Title IV program. Full-time, half-time, or less than half-time enrollment is determined by your institution and must be clearly marked on the form. You must be attending at least half-time to receive this deferment. Click here to open the form as a PDF.

Unemployment Deferment

2007-11-26T13:37:00.000-08:00

This deferment postpones repayment while you are unemployed or working less than 30 hours per week. To receive this deferment, you must certify that you are diligently seeking full-time employment at this time and registered with a public employment agency, or you are receiving unemployment benefits and provide documentation of these benefits. Click here to open the form as a PDF.

Temporary Total Disability Deferment

2007-11-26T13:38:00.000-08:00

This deferment postpones payments for a borrower while they are temporarily totally disabled or while they are unable to secure employment because they are caring for a spouse or dependent who is temporarily totally disabled. Click here to open the form as a PDF.

*NOTE:
Use this form only if you have an outstanding balance on a Federal Family Education Loan Program Loan that was made before 7/1/93, or had a balance on a loan that was made before 7/1/93 at the time you obtained a loan disbursed on or after 7/1/93.

Teacher Loan Forgiveness Forbearance

2007-11-26T13:44:00.001-08:00

This forbearance postpones repayment while you are completing your five years of qualifying service to receive the Teacher Loan Forgiveness on your loans.

Click here to open the form as a PDF.

*NOTE:
Use this form only if you had no outstanding balance on a Federal Family Education Loan (FFEL) Program Loan or a William D. Ford Federal Direct Loan (Direct Loan) Program Loan on 10/1/98, or had no outstanding balance on a FFEL Program Loan or a Direct Loan on the date you obtained a loan after 10/1/98.

Which borrowers and loans are eligible for this repayment plan?

2009-06-16T05:20:00.002-07:00

All borrowers are eligible for this plan as of July 1, 2009, for repayment on Stafford, GradPLUS, and consolidation loans. Parent PLUS loans and consolidation loans that include Parent PLUS loans are not eligible for IBR.

Use our IBR calculator to see if you qualify.

What is IBR?

2009-06-16T05:22:00.002-07:00

Income-Based Repayment is a new repayment plan that can help you manage your student loan debt by lowering your monthly payments. IBR will help make loan payments more manageable by calculating your payment amount based on your adjusted gross income (AGI) and family size.

In order to qualify, you must demonstrate a partial financial hardship (PFH), and if you do, your payments will be capped at 15% of your discretionary income. While under this plan, your situation will be evaluated annually to determine if your PFH has continued. There are additional benefits such as restricted capitalization, loan forgiveness, and interest subsidies that may also be available while on this repayment plan.

If you think IBR may be right for you, use our IBR calculator to see if you qualify. You may also contact us by email or call us at 1-800-337-6884 if you have questions. IBR will be available for borrowers beginning July 1, 2009.

How do I see if I qualify for Income Based Repayment (IBR)?

2009-07-16T06:00:00.000-07:00

Try our IBR calculator to see if you might qualify or contact us with any questions.

What is family size?

2009-06-16T05:17:00.000-07:00

Family size is determined by counting the borrower, the borrower’s spouse, and the borrower’s children, including unborn children who will be born during the year the borrower certifies family size, if the children receive more than half of their support from the borrower.

A borrower’s family size also includes other individuals if, at the time the borrower certifies family size, the other individuals live with the borrower and receive more than half their support from the borrower and will continue to receive support from the borrower for the year the family size is certified.

Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.

What is adjusted gross income (AGI)?

2009-06-16T05:18:00.000-07:00

AGI is the borrower’s adjusted gross income as reported to the Internal Revenue Service (IRS). For a married borrower filing jointly, AGI includes both the borrower’s and spouse’s income, and for a married borrower filing separately, only the borrower’s income.

When will IBR be available?

2009-06-16T05:22:00.001-07:00

You may request the Income-Based Repayment plan at any time on or after July 1, 2009.

How are payments calculated under IBR?

2009-06-16T05:20:00.001-07:00

Monthly payments are calculated as 1/12th of the following:

15% x [AGI - (150% poverty line applicable to family size)]

Are defaulted loans held by the guarantor eligible for IBR?

2009-06-16T05:19:00.000-07:00

No, defaulted loans held by guarantors are not eligible for IBR. If a defaulted loan is rehabilitated and repurchased by a Title IV lender, however, that loan then becomes eligible for IBR.

What is Partial Financial Hardship (PFH)?

2009-06-16T05:16:00.000-07:00

PFH is a circumstance in which the annual aggregate amount due on all of a borrower’s eligible FFEL and Direct loans, as calculated under a standard repayment plan based on a 10-year repayment period at the time the borrower initially entered repayment, exceeds 15% of the difference between the borrower’s adjusted gross income and 150% of the poverty line for the borrower’s family size.

What is Poverty Line Income?

2009-06-16T05:15:00.000-07:00

Poverty line income is the income categorized by state and family size in the Poverty Guidelines published annually by the United States Department of Health and Human Services (HHS) pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a state identified in the Poverty Guidelines, the borrower’s family line income is the income used for the 48 contiguous states.

How can I make a payment?

2009-06-01T08:49:00.000-07:00

Edfinancial Services gives you several ways to make your student loan payments:

Use our Auto Debit payment plan to have payments automatically drafted from your checking or savings account each month. Download the application here (PDF).
Visit www.edfinancial.com/paynow to use our online payment system, for one-time monthly transactions.
Call us at 1-800-337-6884 to make a payment over the phone
Mail us your payment along with the payment coupon from your monthly statement

How does interest accrue if I am late on a payment?

2009-06-01T08:48:00.000-07:00

Interest accrues on the unpaid principal balance during the periods between the dates we have received payments. If the accrued interest is not paid, the excess interest remains due on your loan(s).

Interest accrues using the simple daily interest formula:

(Unpaid Principal x Interest Rate) ÷365.25 = Daily Interest

And then,

Daily Interest x Number of Days = Interest Due

What does it mean when interest is capitalized? When does it occur?

2009-06-01T08:46:00.000-07:00

Interest accrues on the principal balance of your loan during times when a payment is not required to be made on a loan. For FFELP loans, deferment, forbearance, grace, and in-school statuses are all examples of times when a payment is not required. If it is unpaid, accrued interest is usually capitalized when the loan goes into repayment; the accrued interest is added to the principal balance of your loan, which increases the total outstanding balance due.

Because interest continues to accrue on the principal balance if a payment is not made, any future interest that accrues after capitalization will be based on the new outstanding principal amount (previous principal balance plus capitalized interest). Therefore, capitalization increases the total cost of your loan.

You can avoid the cost of capitalization by making payments during any period when they are not due. For certain federal student loans, including unsubsidized Stafford, Parent PLUS and GradPLUS, federal law permits unpaid interest to be added (capitalized) to your principal balance at certain times during your loan term. These times where unpaid interest may be capitalized can include after your grace period, at the end of deferment, and at the end of forbearance.

For private loans, consumer law permits unpaid interest to be capitalized at the frequency stated in the terms of the promissory note that you sign.

What fees could potentially be added to my account?

2009-06-01T08:45:00.000-07:00

Once in repayment, there are two types of fees that could potentially be added to your student loan account: late fees and returned payment fees.

Most lenders charge a late fee if you do not make your payment on time. Usually, these fees are charged as a percentage of your monthly payment. Many lenders provide for a grace period before they charge a late fee. For example, if the lender’s grace period is five days, a late fee would be charged six days after the payment is due, if a payment has not been received.

Most lenders also charge a fee if your bank returns your payment for any reason and does not honor it. Some of the reasons a payment may be returned are insufficient funds in the specified account, the bank is unable to locate the account, or a stop payment order has been placed upon a check or payment.

How is student loan interest calculated?

2009-06-01T08:43:00.000-07:00

Most student loans (including all federally guaranteed loans) use a method of interest accrual known as simple interest. The difference between simple interest and compound interest (the type of interest that accrues on most major credit cards) is that simple interest is only calculated on the principal balance, not on the previously accrued interest.

To calculate your daily interest accrual, use the following formula: (Current Principal Balance x Interest Rate) ÷ 365.25

This formula says to multiply your current principal balance by the interest rate and then divide the result by 365.25 (the number of days in one year). The result is your daily interest accrual, or how much interest you would pay for one day. You can multiply this number by a specific number of days to calculate your interest accrual over a certain amount of time.

Example:

Current principal balance: $20,000.00
Interest rate: 4.50%
Days of interest needed: 30

Just plug in the numbers to calculate the approximate 30 day interest accrual:
[(20,000 x .045) ÷ 365.25] x 30 = $73.92