VSAC Federal Loans

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Understand Your Education Loans

How Interest Works

Education loans accrue (accumulate) interest charges on a daily basis. With daily interest, you accrue one day’s worth of interest for each day you owe a balance to the lender. The higher your principal balance is, the greater your daily interest charge will be. The lower your principal balance is, the lower your daily interest charge will be.

The Life Cycle of a Student Loan

In School

Students are not due for payment on Federal Stafford or Graduate PLUS loans while enrolled at least half time in an eligible college or university. While you are not due for payment, you can make payments at any time. Making payments while you are in school will reduce the cost of your loan over time since you’ll be reducing your principal balance and any outstanding interest.

Parents, as PLUS loan borrowers you can request a deferment (suspension of payments) while your dependent student is enrolled at least half time.

In Grace

Students, once you leave school, or are no longer enrolled at least half time, you will have six months until you have to begin making payments. For Federal Stafford loans this is called a Grace Period. For Graduate Plus loans this is called a Post Enrollment Deferment.

During this time you should be evaluating your estimated monthly loan payment and determining how to fit this payment into your monthly budget. You can also make payments during this time to help reduce the cost of your loan over time.

Parent PLUS loan borrowers do not receive a grace period; payment is due once the PLUS loan is fully disbursed. However there are many repayment options available. Log in to Manage My Account (MMA) to explore, or call VSAC Federal Loans to review your situation.

In Repayment

Prior to your first payment being due, you will receive a notice from VSAC Federal Loans outlining your repayment term and payment amount. If you haven’t already, set up Manage My Account (MMA) so you can manage your student loan account online.

Manage My Account (MMA) provides you a fast, secure, convenient way to manage all your VSAC loan needs 24 hours a day. Make payments, reduce or suspend your payments, view detailed account information, print important loan documents and more online. You can also sign up for Electronic Correspondence and receive most of your loan information electronically.

Click here to sign up for MMA today!



Delinquency Strategies

Click the delinquency stage to view text for your school to contact your students at the described delinquency stage.

Days Past Due

1-30

If you are having difficulty making timely payments on your federal education loan(s) please contact your service provider. Late payments can affect your credit rating. Work with your service provider(s) today.

View all your federal education loans, including contact information for your service provider(s), at www.nslds.ed.gov.

31-60

You’ve missed two payments on your federal education loan(s).

Late payments, missed payments, or other defaults on your loan(s) may be reflected on your credit report. A credit history with late payments makes it difficult to obtain a mortgage, car loan or credit card. It can even affect your ability to secure a job.

If you are having difficulty making your payments, please call your service provider today.

A list of your service provider(s) is available at www.nslds.ed.gov.

61-90

Your federal education loan(s) is/are now three payments behind! You have a legal obligation to repay your education loan(s) and your account status is reported to national credit bureaus. Late payments can seriously hurt your ability to receive credit for up to seven years.

Please call your service provider today to learn about loan repayment options.

Every on-time payment you make helps re-build your valuable credit. Don’t let this get any further out of control. Honor your obligation and contact your service provider today.

A list of your service provider(s) is available at www.nslds.ed.gov.

91-120

Your federal education loan(s) is/are seriously past due and approaching default. Defaulting costs you money, eliminates many financial privileges and you are still required to repay your loan.

If you default your loan(s) any of the following steps may be taken to recover your outstanding balance:

  • Your federal and/or state tax refunds may be offset to repay your defaulted loan.
  • You may be subject to Administrative Wage Garnishment.
  • Legal action may be taken to force you to repay the loan.
  • Your credit rating will suffer.

Contact your service provider today!

View all your federal education loans, including contact information for your service provider(s), at www.nslds.ed.gov.

121-150

You have missed five payments on your federal education loan(s)!

Please send the past due amount to your service provider immediately or contact them to discuss a repayment plan before it’s too late.

Time is running out! Send your payments or contact your service provider now!

View all your federal education loans, including contact information for your service provider(s), at www.nslds.ed.gov.

151-180

Don’t lose the ability to choose the best management option for your
education loan(s), contact your service provider today.

You have missed six payments on your education loan(s) and are rapidly approaching default.
If you default your loan(s) any of the following steps may be taken to recover your outstanding balance due:

  • Your federal and/or state tax refunds may be offset to repay your defaulted loan.
  • You may be subject to Administrative Wage Garnishment.
  • Legal action may be taken to force you to repay the loan.
  • Your credit rating will suffer.

Your service provider is there to help you manage your education loan(s). Contact them today!
View all your federal education loans, including contact information for your service provider(s), at www.nslds.ed.gov.

181-210

Don’t ruin your financial future; call your service provider now!

The consequences of defaulting on a student loan are severe and long lasting. Defaulting costs you money, eliminates many financial privileges and you are still required to repay your loan.

Call your service provider there may be a repayment option to help you get back on track.

View all your federal education loans, including contact information for your service provider(s), at www.nslds.ed.gov.

211-240

Your education loan(s) is/are seriously past due and nearing default. Several attempts have been made to contact you.

If you do not act today to resolve this problem, payment in full of your loan will be demanded and default proceedings will begin.

Contact your service provider today!

View all your federal education loans, including contact information for your service provider(s), at www.nslds.ed.gov.



Avoid Paying More for your Loan

You can reduce the cost of your loan over time by following a few of these tips.

Make your payments on time

If you pay late, you’ll pay more interest because you’re paying down your balance more slowly than was expected.

You can schedule recurring, automatic monthly payments by signing up for KwikPay online. To sign up for KwikPay, log into your account and select “KwikPay (auto debit)” under the “Payments” option.

Make payments while you’re in school or in a deferment

Students your unsubsidized and Graduate PLUS loans accrue interest even while you’re in school. If you decide to delay paying the interest, be aware that your interest may capitalize when you leave school. “Capitalized interest” means that the accumulated interest is added to the principal of the loan.

Capitalized interest causes your principal balance to grow and increases the cost of repaying your debt. A larger principal balance means you’ll pay more interest over the life of the loan.

Parents the Parent PLUS loan begins accruing interest when it is first disbursed. You may be able to defer your payments while your dependent is enrolled, however interest will still accrue.

Making payments as soon as you can when not in repayment will help reduce the amount you’ll have to repay over time.

Understand the Impact of Extending the Term of your Loan

Many education loans are set up to be repaid within 10 years. You may decide you want to apply to extend your loan payments out over 25–30 years. If you’re eligible, this will enable you to make lower monthly payments. However, lower monthly payments over a longer repayment term mean higher estimated interest charges over the life of your loan.

Pay a Little Extra with Each Payment

Once you begin repaying your loan:

  • each payment first goes toward paying the interest that has accumulated. The amount of interest taken from each payment depends on:the number of days between your paymentsthe amount of principal that remains on your loanyour interest rate
  • the remainder of each payment goes toward reducing your principal.

If you pay even a little bit extra with each payment, you pay off your loan more quickly and help reduce your total estimated interest charges because you reduce your principal balance more quickly. This lowers the interest that is calculated, and thereby lowers the total cost of your loan.

There is never any penalty for prepayment (paying off your loan before your payment period is up).




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