Federal Student Loan Counseling

          

YOUR RIGHTS AS A FEDERAL PERKINS STUDENT LOAN (NDSL) RECIPIENT

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Your lending institution is required to disclose to any credit bureau organization the amount of loans made to you at the time of disbursement of the loan.

As a Perkins Loan borrower, it is your responsibility to initiate the process of applying for a deferment, forebearance or cancellation.

You should continue to make your loan payments until you receive notice of approval of deferment, forebearance or cancellation.

Grace Period

Repayment of your student loan does not begin until nine months after you have ceased being at least a half-time students (six months if the loan was committed between October 1, 1980 and July 1, 1987). During this grace period, you are not required to make payment, and interest will not accrue on your loan.

For loans made after October 1, 1980, you will be entitled to a six month grace period after all types of deferments except those granted in the case of extreme hardship.

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Borrowers who are enrolled on a less that half-time basis

The secretary has determined that borrowers who receive loans while enrolled on a less than half-time basis should receive the same benefits and therefore the repayment period on a loan to a borrower enrolled on a less than half-time basis begins:

  1. On the date of the next scheduled installment payment on any outstanding loan to the borrower: or

  2. If the borrower has no outstanding loan at the earlier of

a. nine months from the date the loan was made, or

b. the end of a nine month period that includes the date the borrower ceased enrollment as at least a half-time student.

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DEFERMENT PRIVILEDGES FOR DIRECT LOANS MADE PRIOR TO OCTOBER 1, 1980

Repayment of both principal and interest on your student loan may be deferred (delayed) by submitting properly completed "Request for Deferment" forms under the following conditions:

STUDENT DEFERMENT: Any borrower is eligible for a deferment who is enrolled as at least a half-time student at an accredited institution of higher education in the United States, or at a comparable institution outside the United States. A "half-time student" is defined as a student who is carrying at least one half of the normal full-time academic workload as determined by the institution where enrolled. If you are attending a school which will only certify your student status for the current term, you are required to submit a form each term.

ARMED FORCES: A deferment is available for up to three years provided you are a member of the United States Armed Forces on active duty.

PEACE CORPS, VISTA, or ACTION: A deferment for up to three years if you are a volunteer member of the Peace Corps, VISTA or ACTION.

HARDSHIP: In cases of extreme hardship, deferment is sometimes allowed for short periods of time. Your lending institution will determine whether or not you are entitled to a hardship deferment after considering your individual circumstances. During hardship deferment, interest continues to accrue and must be paid.

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DEFERMENT PRIVELEGES FOR DIRECT LOANS MADE ON OR AFTER OCTOBER 1, 1980

Repayment of both principal and interest on your student loan may be deferred (delayed) by submitting properly completed "Request for Deferment" forms. You are entitled to a six-month grace period following each period of deferment for your studies, services or internship. The forms should be completed at the beginning and end of each year. In addition to all of the preceding deferment privileges, loans made after 10/1/80 also qualify for the following:

COMMISSIONED CORPS: A deferment is available for up to three years if you are an officer in the commissioned Corps of the U.S Public Health Service.

SERVICE COMPARABLE TO PEACE CORPS: A deferment is available for up to three years if you are a volunteer member of a service which the Department of Education considers to be comparable to service in the Peace Corps or ACTION programs.

If you are requesting deferment as a volunteer in service comparable to Peace Corps or ACTION your request must be accompanied by documentation sufficient for the lending school to determine whether you qualify for deferment under the following terms:

  1. The organization in which you serve is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1954;

  2. You provide service to low-income persons and their communities and assist them in eliminating poverty related human, social and environmental conditions;

  3. Your compensation, including allowance, does not exceed the compensation received by a full-time volunteer in the Peace Corps, or in an ACTION program.

  4. As a part of your service, you do not engage in religious activities or fund raising to support religious activities;

  5. You have agreed to serve on a full-time basis for a term of at least one year.

TEMPORARILY TOTALLY DISABLED: A three-year deferment is provided if you are temporarily totally disabled or unable to work as a result of caring for a spouse who is totally disabled. Both of these must be certified by a physician.

INTERNSHIP: You can defer payments for up to two years of you are serving an internship which is required by the state licensing agency in order to be certified for professional practice or service. A bachelor's degree is required before beginning the internship.

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DEFERMENT PRIVELEGES FOR FEDERAL PERKINS LOANS MADE ON OR AFTER JULY 1, 1987

Repayment of both principal and interest on your student loan may be deferred (delayed) by submitting properly completed "Request for Deferment" forms. You are entitled to a six-month post-deferment grace period following each period of deferment for studies, services, or internship. The forms should be completed at the beginning and end of each year. In addition to all of the preceding deferment privileges, loans made after 7/1/87 also qualify for the following:

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION: Three years of deferred repayment for active duty service with the National Oceanic and Atmospheric Administration.

PARENTAL LEAVE: Six months of deferred repayment for parental leave due to pregnancy, care of a newborn, or care of an adopted child. This deferment may be used by either or both parents and must be requested within six (6) months of ceasing to be at least a half-time student.

WORKING MOTHERS: One year of deferment for a mother with preschool age children who is entering the work force and is compensated at the rate of not more than one dollar above minimum wage.

DEPENDENTS: A three-year deferment is provided if you are unable to work as a result of caring for a dependent who is totally disabled. Certification by a physician is required.

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DEFERMENT PRIVILEGES FOR FEDERAL PERKINS LOANS MADE ON OR AFTER JULY 1, 1993

Repayment of both principal and interest on your student loan may be deferred (delayed) by submitting properly completed "Request for Deferment" forms. You are entitled to a six-month grace period following each deferment period. The forms should be completed at the beginning and end of each year.

a Student deferment - Any borrower is eligible for a deferment if they are enrolled at least half-time student at an accredited institution of higher education in the United States, or at a comparable institution outside the United States. A "half-time student" is defined as a student who is carrying at least one half of the normal full-time academic workload as determined by the institution where enrolled. If you are attending a school which will only certify student status for the current term, you are required to submit a form each term.

b Fellowship - Any borrower pursuing a course of study in an approved graduate fellowship program.

c Rehabilitation Program - Any borrower in an approved rehabilitation training program for disabled individuals, excluding a medical internship or residency program.

d Unemployed - Any borrower seeking and unable to find full-time employment, but not in excess of three years.

e Economic Hardship - Any borrower suffering an economic hardship, but not in excess of three years.

f Cancellation Provisions - Any borrower engaged in service described under the cancellation provisions.

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PARTIAL CANCELLATION BENEFITS FOR NATIONAL DIRECT STUDENT LOANS

By performing certain services, which are explained briefly below, you may be eligible for cancellation credit which will reduce both your loan balance as well as the accrued interest on your loan.

In order to receive any of these cancellation benefits, you must submit a properly completed "Request for Partial Cancellation" form when entering service, or upon receiving a bill (whichever comes first), and upon completion of each full year of service. After signing the form, have your school principal, district official or commanding officer certify the form as required in the appropriate section.

TEACHING: If you are a full-time teacher in an elementary or secondary school determined by the federal government to have a high concentration of students from low-income families, you may be eligible for a partial cancellation. The list of qualifying schools is published annually by the government in the Department of Education Listing of Low-income Schools. To qualify for cancellation benefits in this category, you must be employed as a full-time teacher for a complete academic year or its equivalent. For the purposes of this category, a teacher is defined as being a person who is a professional employee of a school, or school system, who is devoted to providing classroom instruction or performing related duties in support of the education program.

If you are a full-time teacher of handicapped children in a secondary or elementary school, you may also be eligible for partial loan cancellation. Handicapped children, as defined by the NDSL program, includes those who are mentally retarded, hard of hearing, deaf, speech impaired, visually handicapped, seriously emotionally impaired, orthopedically impaired, or the health impaired children, who by reason thereof require special education and related services.

Beginning with the 1980-1981 academic school year, this definition of handicapped children was expanded to include children with specific learning disabilities. However, the teaching of children with specific learning disabilities performed prior to the 1980-1981 academic year does not qualify for cancellation as teaching of handicapped children.

If you are eligible, your loan will be cancelled at these percentage rates:

15% for the first year of teaching

15% for the second year of teaching

20% for the third year of teaching

20% for the fourth year of teaching

30% for the fifth year of teaching

If you teach in the Headstart Program, you may cancel each year at the 15% rate until the entire loan is canceled.

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MILITARY SERVICE: If you become a member of the United States Armed Forces, after receiving your loan, you may qualify for a military cancellation of up to 50% of your loan amount. Eligibility is limited to those who are serving in an area of hostilities or imminent danger and receiving special pay under section 310 of Title 37, United States Code. You may cancel at the annual rate of 12.5 % for a maximum of four years. Cancellations are granted upon completion of 12 consecutive months of service.

BANKRUPTCY: Your loan cannot be discharged due to bankruptcy unless the loan has been in repayment for seven years excluding periods of deferment and seven years after your grace period has expired, unless the bankruptcy court determines that repayment of the loan would impose undue hardship on you or your dependents.

For bankruptcies filed before October 8, 1998, loans in repayment more than seven years by the date of the bankruptcy filing may be discharged by a general discharge order. The school may therefore not resume collection after the borrower has received a discharge if the loan entered repayment more than seven years before the filing of the petition and either of the following conditions apply: (1) the discharge was obtained in a chapter 13 proceeding in which the plan provided for the debt specifically or for unsecured debts in general; or (2) the discharge was obtained in any other bankruptcy proceeding, and the debt was not excepted from discharge by a provision of the Code other than 11USC 523(a)(8).

If these conditions are met, the school must terminate all collection action and write off the loan.

If the conditions above are met and the borrower additionally files an adversary proceeding for dishcharge of a loan on the ground of undue hardship under 11 USC 523(a)(8), the school still may not oppose a determination of dischargeability.

For bankruptcies filed on or after October 8, 1998, a borrower who received a general discharge in bankruptcy does not by that order obtain a discharge of a loan that has been in repayment for seven years or more prior to the date of the filing. For these bankruptcies, a student loan is discharged by a general discharge order ONLY if the borrower obtains a court ruling that the repayment of the loan would impose an undue hardship on the borrower and his/her dependents.

DEATH OR DISABILITY: In the case of death, your loan will be canceled on the basis of a death certificate or other evidence that is conclusive under state law. If you become permanently and totally disabled after receiving the loan, the loan will be cancelled based on medical evidence supplied by you or your representative.

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PARTIAL CANCELLATION BENEFITS FOR FEDERAL PERKINS LOAN PROGRAM

Same as above, but to include:

LAW ENFORCEMENT: If you become a Law Enforcement or Corrections Officer you may qualify for a partial cancellation of your loan for any advance granted on or after 11/29/90. You must be a "sworn officer or person whose principal responsibilities are unique to the criminal justice system and are essential in the performance of the agency's primary mission." Cancellation will be at the rate of 15% for the first and second years, 20% for the third and fourth years and 30% for the fifth year.

PEACE CORPS, OR VISTA SERVICE: 15% of the total principal amount of the loan, plus interest on the unpaid balance, will be canceled for the first and second twelve-month period of volunteer service.

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FEDERAL PERKINS LOANS ADVANCED ON OR AFTER JULY 23, 1992

Same as above, but to include:

a. A full-time special education teacher, including teacher of infants, toddlers, children or youth with disabilities in a public or other non-profit elementary or secondary school system, or as a full-time qualified professional providing early intervention services in a public or other non-profit program under public supervision by the lead agency as authorized in Section 676(B)(9) of the Individuals With Disabilities Act.

b. A full-time teacher of mathematics, science, foreign languages, bilingual education or any other field of expertise that is determined by the State Education Agency to have a shortage of qualified teachers.

c. A full-time nurse or medical technician providing heath care service.

d. A full-time employee of a public or private non-profit child or family service agency who is providing or supervising the provision of services to high risk children from low-income communities and their families.

If you are eligible, your loan will be canceled at 15% of the total principal amount of the loan, plus interest on the unpaid balance for the first and second twelve-month period of services; 20% of the total principal amount of the loan, plus interest will be canceled for the third and fourth twelve-month period; and 30% of the total principal amount of the loan for the fifth year.

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POSTPONEMENT: If you expect to be eligible for teacher, volunteer in Peace Corps/Vista or law enforcement cancellation and a repayment installment will become due before completion of the year, you should apply for postponement of payment. The postponement delays billing until the end of your year of service. Upon receipt of the bill, you should request cancellation by completing the "Request for Partial Cancellation of Loan" form as outlined in the cancellation section.

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YOUR RESPONSIBILITIES AS AN NDSL/FEDERAL PERKINS LOAN RECIPIENT

CHANGE OF ADDRESS

You are responsible for keeping your lending institution and their billing agent informed of any change in your address.

Visit our loan servicer website at www.acs-education.com to update your contact information.

COMPLETION OF FORMS

You are responsible to report your eligibility for deferment or cancellation on properly completed "Request for Deferment" or "Request for Partial Cancellation" forms. These forms must be filed upon receipt of your first bill after you have become eligible for either cancellation, and every year thereafter during your eligibility.

For your convenience, forms will periodically be sent to you with your billing notices. Visit www.acs-education.com to request forms, or call 1-800-826-4470

Please note that forms without an official seal, stamp, or accompanying letterhead certification cannot be used to update your account.

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FINANCE CHARGES

Interest will begin to accrue on your loan at the end of the grace period. (For more specific definition of a grace period, refer to the section entitled "Your Rights As a Perkins Loan (NDSL) Recipient.")

Annual simple interest charges at the rate agreed upon in your promissory note will be assessed on the unpaid balance of your loan.

If you desire, you may repay all or any portion of your loan during the grace period without interest charges.

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REPAYMENT OF YOUR LOAN

Your total loan amount, plus the interest accrued on that amount is repayable in installments according to the schedule that was agreed upon with your lending institution. (Your repayment schedule is described in your disclosure statement.)

If you are on a quarterly repayment plan, your first payment is due three months after the end of the grace period. If you are on a monthly plan, your first payment is due one month after the expiration of the grace period.

You will be sent a bill approximately 30 days before each payment is due. You are, however, responsible for making your regularly scheduled payments even if you do not receive a bill. Should you ever fail to receive a bill, please contact The HUB or ACS (website - 1-800-826-4470)immediately.

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PENALTY/LATE CHARGES

Under the terms of your promissory note, your lending institution may assess penalty/late charges should you fail to make your payments on time, or fail to file the necessary deferment or cancellation forms prior to their scheduled due date.

If you have any difficulties in making payments, your lending institution will cooperate with you in any way possible although late payments and other types of neglect (such as failure to report changes of address, or failure to submit deferment or cancellation forms on time) could result not only in penalty/late charges being assessed but also in action by a collection agency. Depending upon the terms of your promissory note, you may also be obligated to pay any collection agency fees.

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DEFAULT

At the option of your lender, if you fail to remit a scheduled installment or to file a cancellation or deferment form on time, the entire unpaid balance on your loan, plus accrued interest, any applicable penalty/late charges and any collection costs may become immediately due and payable. This includes reporting the defaulted status to a credit bureau organization. If you are considered in default, you will no longer be eligible to receive Title IV Financial Aid.

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FORBEARANCE

Upon receipt of a written request and supporting documentation, your lending institution must grant a forbearance of principal and interest or principal only, as requested, renewable at twelve month intervals for a period not to extend three years (36 months). Schools may grant forebearance to borrowers who are experiencing financial hardship, poor health, or for other reasons such as national military mobilization or other national emergency.

HARDSHIP

A school must grant forebearance if the total amount the borrower is obligated to pay monthly on all Federal Student Aid (FSA) loans is greater than 20% of the borrowers total monthly gross income. To receive forebearance for hardship, the borrower must submit the following documentation:

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In order to complete your loan counseling session, it is important that you read all of the provided information. You will then need to complete the form at the end of the six information pages provided.

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