:: Frequently Asked Questions ::
General Financial Aid | Repayment | Delinquency | Default
General Financial Aid FAQs
- Who can answer my student loan questions?
- What types of federal student loans are available?
- What are Direct subsidized loans?
- What are Direct unsubsidized loans?
- What are Direct PLUS loans?
- How do I apply for a student loan?
- What's the FAFSA and how do I get one?
- How do I know if I need to provide my parent's information on the FAFSA?
- What happens after I submit the FAFSA?
- How do I get my loan once my eligibility is confirmed?
- How can I use my student loan money?
- What's the interest rate on my student loans?
- Are there any student loan or repayment resources in Spanish?
Q. Who can answer my student loan questions?
A. To get help with your aid application, you can contact the Federal Student Aid Information Center at 800.4.FED.AID (800.433.3243, toll free) or email StudentAid@ed.gov. Contact your loan servicer if you have questions about your current loans. If you're unsure who your servicer is, visit StudentAid.gov and log in to your account.
Q. What types of federal student loans are available?
A. There are three types of federal loans: Direct subsidized, Direct unsubsidized and Direct PLUS loans. More information is available on our "What are my loan options?" page under the "I'm in School" tab.
Q. What are Direct subsidized loans?
A. Direct subsidized loans are available to students who are determined to have financial need. The amount that can be borrowed is based on the school’s cost of attendance minus other financial aid the student may receive, minus the student’s aid index, which is determined by their Free Application for Federal Student Aid (FAFSA). The loan amount can't exceed the maximum loan amount allowed for the student's grade level. Interest is paid by the federal government while the student is attending school or during specified periods of deferment. For loans made on/between July 1, 2012, and June 30, 2014, there is no subsidy during the grace period. If you’d like more information about how FAFSA determines the Student Aid Index, check out this resource from UCanGo2.
Q. What are Direct unsubsidized loans?
A. Direct Unsubsidized loans are available to students regardless of financial need. The amount that can be borrowed is based on the school’s cost of attendance minus other financial aid the student may receive. The loan amount can't exceed the maximum loan amount allowed for the student's grade level. Borrowers are responsible for all interest accrued from the date the loan is disbursed, while the student is attending school or during periods of deferment or forbearance.
Q. What are Direct PLUS loans?
A. Direct PLUS loans are loans made to parents of undergraduate dependent students and to graduate or professional students. Federal PLUS loans are not based on financial need but are based on the borrower's credit. The loan amount can't exceed the school’s cost of attendance minus any other financial aid the student may receive. Borrowers are responsible for all interest accrued from the moment of disbursement.
*Important to note: Parents who take out a PLUS loan for their students’ education cannot transfer this loan to their student once they leave school.
Q. How do I apply for a student loan?
A. This first step to applying for a Direct student loan and to determine your eligibility for federal and state grants or work-study, is completing the Free Application for Federal Student Aid (FAFSA) each year. You can fill out the FAFSA online at FAFSA.gov. For more information, visit our page about completing the FAFSA.
Q. What's the FAFSA (Free Application for Federal Student Aid) and how do I get one?
A. The FAFSA is a federal form that must be completed when applying for federal and some state financial aid. The FAFSA is used to determine your eligibility for federal student financial aid including grants, work-study and student loans.
You can complete the application online at FAFSA.gov.
For answers to some common questions, take a look at our FAFSA FAQs or visit us at StartWithFAFSA.org.
Q. How do I know if I need to provide my parent's information on the FAFSA?
A. If you're a dependent student, you will need to provide your parent's information on your FAFSA. You can download our FAFSA Dependency Status Questionnaire PDF to find out if you're considered a dependent or independent student for the purpose of awarding federal financial aid.
Q. What happens after I submit the FAFSA?
A. After the FAFSA has been completed and sent to the U.S. Department of Education, you'll get a FAFSA Submission Summary. You must review the summary to ensure all of the information you submitted is correct. The summary is sent electronically to the school(s) listed on your FAFSA. After all application materials are complete, the financial aid office notifies you of your eligibility for federal student aid, including loans.
Q. How do I get my loan once my eligibility is confirmed?
A. If you're eligible for a federal loan, you'll complete a Master Promissory Note (MPN), which is a legal agreement of repayment. After your loan is approved, the loan funds are sent to your school.
Q. How can I use my student loan money?
A. You must use the loan money for authorized educational expenses for attendance at the school that certified your loan eligibility. Authorized expenses can include tuition, room, board, institutional fees, books, supplies, equipment, dependent child care, transportation, commuting expenses, rental or purchase of a personal computer, loan fees and/or other documented, authorized costs. Check with your financial aid office to determine what's considered an educational expense.
Q. What's the interest rate on my student loans?
A. Visit StudentAid.gov's Interest Rate page for current rates. Loans disbursed on or after July 1, 2006, have a fixed interest rate. Your loan servicer will notify you of interest rate changes throughout the life of your loan.
Q. Are there any student loan or repayment resources in Spanish?
A. Yes! Ready Set Repay offers “Pida Préstamos Estudiantiles De Manera Inteligente Desde El Principio” (Borrow Smart from the Start) here. The publication offers information about the entire lifecycle of a student loan. Additionally, the Federal Student Aid website and many of its resources are available in Spanish.
Repayment FAQs
- Can my loans be forgiven?
- Who can help me manage my student loan debt?
- Can I see a summary of my loan(s)?
- When do I start repaying my student loan(s)?
- What's a deferment?
- What's capitalization?
- What's forbearance?
- What's consolidation?
- What's OCAP and how's it different from my loan servicer?
- What's a loan servicer and why does mine keep switching?
- If I have problems that can't be resolved through my loan servicer, is there someone I can contact?
- Who's responsible for PLUS loan payments?
- I can't make my student loan payments. What can I do?
- What's the difference between delinquency and default?
Q. Can my loans be forgiven?
A. Yes, under certain circumstances. A detailed list of these circumstances can be found under "I'm repaying my loan."
Q. Who can help me manage my student loan debt?
A. If at any time during your student loan repayment you can't make your monthly payment, immediately contact your loan servicer to find out about available repayment plans, deferment or forbearance options.
Q. Can I see a summary of my student loans?
A. Access your loan information by visiting StudentAid.gov. To view your loan information, you'll need your FSA ID from the FAFSA process. The site lists servicers you can contact with your questions and what type of loan(s) you have.
Q. When do I start repaying my student loan(s)?
A. Repayment of your Direct loan begins six months after you graduate, withdraw from school or drop below half-time enrollment. This six-month period, called a grace period, gives you time to assess your financial situation and adjust your budget to prepare for repayment.
At the end of your grace period, you must begin making payments. Your monthly payment amount and the amount of time you have to pay off your loan depends on the amount you borrow, whether or not you receive a deferment or forbearance and the repayment option you choose.
Q. What's a deferment?
A. Deferment is an authorized period of time during which you may postpone monthly principal and/or interest payments. The federal government makes interest payments on subsidized Stafford loans during authorized deferment periods. You're responsible for interest that accrues on PLUS and unsubsidized Stafford loans during any deferment and have the option of making interest payments to avoid capitalization.
Q. What's capitalization?
A. If you don't pay the interest that accrues on your loan while you're in school or during a deferment or forbearance, the unpaid interest is added to the principal balance of your loan. Once the unpaid interest is added, it increases the total amount of your loan and the monthly payment.
Q. What's forbearance?
A. Forbearance is an authorized period of time during which a loan servicer agrees to temporarily postpone payments or reduce your payment amount if you intend to repay the loan but are having temporary financial difficulties. You're still responsible for the accrued interest during forbearance.
Q. What's consolidation?
A. Consolidation is a loan program that allows borrowers to combine all of their federal education loans into one loan, make a single monthly payment and extend the repayment period (up to 30 years depending on the loan amount). Consolidation loans can make loan repayment more manageable for borrowers with multiple lenders or high loan balances.
Q. What's OCAP and how's it different from my loan servicer?
A. Your loan servicer accepts your monthly payment and processes deferment and forbearance requests.
The Oklahoma College Assistance Program (OCAP) was the designated agency in Oklahoma that insured (guaranteed) FFELP lenders against default, disability and death of student loan borrowers. Guarantors like OCAP are available to help FFELP borrowers with loan problems, loan forgiveness and loan discharge. If you fail to repay a FFELP loan, the guarantor would purchase the debt from the loan servicer and collect the debt on behalf of the U.S. Department of Education.
Q. What's a loan servicer and why does mine keep switching?
A. A servicer is hired to collect, monitor and report student loan payments. While in repayment, your loan could be transferred to a different servicer, similar to how your mortgage can be bought and sold by various lenders. This change can create confusion and concern, especially when you're contacted by a company of which you've never been a customer. Visit the Federal Student Aid Web site to learn more about how your loan servicer can help you manage your student loans and for loan servicer contact information.
Q. If I have problems that can't be resolved through my loan servicer, is there someone I can contact?
A. If you have problems with your student loan that can't be resolved by working with your loan servicer, the U.S. Department of Education’s Ombudsman office can help.
Postal Mail:
U.S. Department of Education
Federal Student Aid Information Center
P.O. Box 1854
Monticello, KY 42633
phone: 1-877-557-2575 (toll free)
fax: 1-606-396-4821
online: https://studentaid.gov/help-center/answers/article/how-to-contact-ombudsman-group
You can also submit a case through the Federal Student Aid (FSA) Feedback Center. If you have previously filed a complaint through the FSA Feedback Center, then you can log in, add information to the existing case, and request to file a dispute.
Remember, the Ombudsman Group can help resolve disputes about federal student aid. If you have a dispute about a private student loan, contact the Consumer Federal Protection Bureau.
Q. Who's responsible for PLUS loan payments?
A. The borrower who took out the loan is responsible for payment. This could be a graduate or professional student or the parent/guardian who borrowed on behalf of a dependent undergraduate student.
Q. I can't make my student loan payments. What can I do?
A. Explain your situation and get help reviewing your options by contacting your loan servicer. You may be eligible for an alternative repayment schedule that will adjust your monthly payment amount, or a deferment or forbearance that temporarily delays your payments.
Q. What's the difference between delinquency and default?
A. Delinquency occurs when your loan payment is past due or late.
Default occurs when your loan is delinquent for 270 days or more. At that point, for a FFELP loan, the guarantor purchases your loan and is responsible for collecting the debt on behalf of the U.S. Department of Education. For a Direct Loan, the U.S. Department of Education will assign the loan to a collection agency or special debt collection unit.
Delinquency FAQs
- What happens when I become delinquent on my student loan?
- Why am I getting delinquency notices while I'm in school?
- What's the difference between delinquency and default?
Q. What happens when I become delinquent on my student loan?
A. The first day after you miss a student loan payment, your loan becomes past due, or delinquent. Your loan account remains delinquent until you repay the past due amount or make other arrangements, such as deferment or forbearance, or change your repayment plan.
If you continually fail to make payments on a FFELP student loan, your loan servicer reports the delinquency to the guarantor. You’ll get letters and phone calls from both the loan servicer and guarantor asking you to contact them to help resolve your delinquency.
If you’re delinquent on your Direct student loan payment for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus.
Q. Why am I getting delinquency notices while I'm in school?
A. You may be getting notices if your loan servicer or guarantor is unaware you're in school or you've had a change in enrollment status. You should contact your loan servicer immediately to notify them of any changes in your enrollment status such as a school transfer, drop below half-time or change in your graduation date.
Q. What's the difference between delinquency and default?
A. Delinquency occurs when your loan payment is past due or late.
Default occurs when your loan is delinquent for 270 days or more. At that point, for a FFELP loan, the guarantor purchases your loan and is responsible for collecting the debt on behalf of the U.S. Department of Education. For a Direct Loan, the U.S. Department of Education will assign the loan to a collection agency or special debt collection unit.
Default FAQs
- What's a defaulted student loan?
- What happens when my student loan goes into default?
- Who can help me manage my defaulted student loans?
- When are collection costs added?
- When is my default reported to consumer reporting agencies?
- Can my federal and state tax refunds be taken?
- How can I get my student loan out of default?
- Who can help me manage my defaulted student loans?
- Can I get a forbearance or deferment if my loan is in default?
- I mailed my deferment/forbearance request to the lender. How can I be in default?
- Can I consolidate a defaulted student loan?
- What's student loan rehabilitation?
- What's the difference between rehabilitation and consolidation?
- If I'm in default, can I get more financial aid?
Q. What's a defaulted student loan?
A. Loans are considered defaulted when a borrower fails to repay a loan according to the terms agreed upon in the Master Promissory Note (MPN). This usually happens when payment is at least 270 days late. Default can also occur for failure to submit on-time requests for a deferment or cancellation. If a FFELP loan defaults, the guarantor (OCAP) purchases the loan from the loan holder and begins collection.
Q. What happens when my student loan goes into default?
A. Defaulting on a federal student loan can result in several consequences, which may include:
- Ineligibility for financial aid or grants until the default is satisfactorily resolved.
- Seizure of state and federal tax refunds or other federal payments, to be applied to the loan balance.
- Wage garnishment.
- Hold on academic transcripts.
- Reporting the default to consumer reporting agencies.
- Capitalization of accrued interest, increasing the loan balance.
- Assessment of collection costs (approximately 19 percent) which are added to the loan balance.
Q. Who can help me manage my defaulted student loans?
A. Once you've used StudentAid.gov to locate your loan holders, contact them for assistance. If the Oklahoma College Assistance Program is listed as the holder of your defaulted loan, please contact ECMC at 844.371.7100 or reach out to ocapservicing@ecmc.org.
Q. When are collection costs added?
A. Collection costs are added when no payment or repayment arrangements are made within the first 60 days of default. If you've set up repayment arrangements within the first 60 days, collection costs will be added if you become two payments past due.
Q. When is my default reported to consumer reporting agencies?
A. Defaulted loans are reported 60 days after the date of default when no payment or no repayment arrangements are made within the first 60 days of default. If you've set up repayment arrangements within the first 60 days, credit bureau reporting will occur if you become two payments past due.
Q. Can my federal and state tax refunds be taken?
A. Yes. The money will be applied to the balance of your defaulted loan. Other federal payments, such as Social Security, may also be offset as a result of the default.
Q. How can I get my student loan out of default?
A. You have several options to get your loan out of default status. You can:
- Make a lump sum payment to pay the loan in full.
- Make monthly payments until the loan is paid in full.
- Make and fulfill a settlement offer.
- Rehabilitate your loan.
- Consolidate your loan.
Q. Can I get a forbearance or deferment if my loan is in default?
A. Defaulted student loans aren't eligible for forbearance or deferment.
Q. I mailed my deferment/forbearance request to the lender. How can I be in default?
A. OCAP considers you in default based on the information sent to us by your loan holder. If you have concerns about a deferment or forbearance, contact your loan holder. You're still expected to make arrangements to set up a satisfactory repayment agreement.
Q. Can I consolidate a defaulted student loan?
A. Yes, you can consolidate after you've established monthly repayment and have met the required number of payments.
Q. What's student loan rehabilitation?
A. Rehabilitation is a process by which a borrower can bring their student loan out of default by following specific repayment requirements.
Q. What's the difference between rehabilitation and consolidation?
A. After successful completion of the rehabilitation payments, your loan is purchased by a lender. This brings your loan out of default and any consumer reporting agency default listings made by OCAP will be updated.
Consolidation brings your loan out of default by making a new loan with different repayment terms. However, the defaulted loan listing is not completely removed from your credit history with a consolidation loan.
Q. If I'm in default, can I get more financial aid?
A. Yes, but only after you've made six consecutive, satisfactory payments on your defaulted student loan. You must continue to make on-time, monthly payments to receive aid while the loan is in default and you must not have ineligible loans.
