Entrance Loan / Debt Management

Prior to receiving the first disbursement on a Federal Perkins Loan, Nursing Student Loan, Federal Direct Graduate PLUS, Federal Direct Subsidized Stafford Loan, and Unsubsidized Federal Direct Stafford Loan the federal government requires you to complete a loan counseling session. The purpose of entrance counseling is to provide you with the information you need in order to make an informed decision about loan borrowing and the many aspects of loan repayment.

Please choose the appropriate counseling session below:

• If you are applying for or have been awarded a Direct Subsidized Stafford Loan, Direct Unsubsidized Stafford Loan, Direct Graduate PLUS loan, You are required to complete Entrance Loan/Debt Management Counseling through https://studentaid.gov/. 
• If you are applying for or have been awarded a Federal Perkins Loan or Nursing Loan, please review the information below and take the short test. Your test results and completion of loan counseling will be transmitted electronically to the Financial Aid Office.

If you have questions contact us by phone 940-898-3067 or email eloan@twu.edu or finaid@twu.edu.

Why do I have to do this?

Many factors contributed to the requirement that students complete loan counseling prior to receiving their first loan disbursement. One of the primary factors was the switch from grants to loans as the primary source of student aid over the last 10 to 20 years. By the mid-1980's loans had increased to approximately 52% of the aid package, and today that percentage has increased. At the same time, the default rate on student loans has continued to increase.

A student loan is a serious commitment. The promissory note you sign for your student loan is a legal document that signifies your agreement with the terms of the loan. A loan is a financial obligation that must be repaid, so it is important that you borrow only the amount you actually require to meet your educational expenses. You must repay your loan, including interest and fees, even if you do not graduate, are not satisfied with your education, or cannot find a job. All loan advances will be reported to a national credit bureau. In estimating the amount you will need to borrow, be sure to include:

• tuition and fees
• books and supplies
• room and board
• personal expenses
• clothing
• transportation
• medical and dental expenses
• recreation
• any other expenses you know you will incur

As you estimate your income for the year, be sure to include any amounts you may earn, parental or other support, savings, grants, or scholarships. Unless you have a significant amount of consumer indebtedness, your total expenses should be very close to our established financial aid budget. If you subtract your income from expenses, you will have a fairly realistic estimate of the amount you will need to borrow through student loans.

You will also want to keep in mind that when you graduate, you will be competing with thousands of other graduates for available jobs. Many of these jobs will be entry-level positions, and you may find your student loan will take a big chunk out of your paycheck. Developing a budget and sticking to it will make your student loan debt more manageable. For example, if you borrow $25,000 in students loans your monthly payment would be approximately $304.00 per month. Typically, 8% to 15% of your first year's gross income is considered a manageable level of educational debt repayment.

Before you decide to borrow funds to assist with your educational expenses, be sure to explore all alternatives. Some alternatives to consider include:

• Scholarships offered by the university and private sources
• Grants
• Employment programs on campus and traineeships
• National Guard and Veteran's programs
• Dependent awards for dependents of deceased veterans, prisoners of war, persons missing in action, police, and firemen

Once you have made the decision to borrow student loan funds to assist with your educational expenses, you must then select a loan program. Loans available at Texas Woman's University include:

• Subsidized Federal Stafford Loan
• Unsubsidized Federal Stafford Loan
• Graduate PLUS Loan
• Parent Loan for Undergraduate Students
• Federal Perkins Loan
• Nursing Student Loan
• Health Education Loan Program (HELP)

One of the factors to consider in selecting a student loan is the interest rate. The interest rate on the Federal Perkins Loan and Nursing Student Loan is 5%. Interest on the Subsidized Federal Stafford Loan and Unsubsidized Federal Stafford Loan is variable up to 8.25%. Interest on the Parent Loan for Undergraduate Students is variable up to 9%.

A student qualifies for a Subsidized Federal Stafford Loan based on financial need. Financial need is determined by completing the Free Application for Federal Student Aid (FAFSA). A student's need is not a factor in determining eligibility for an Unsubsidized Federal Stafford Loan. It is possible for a student to have both a Subsidized and Unsubsidized Federal Stafford Loan. The maximum amount you may borrow is determined by your grade level and the cost of attendance at the school you are attending. If you have a subsidized loan, the government pays the interest on the loan while you are in school and for six months after you leave school. If you have an unsubsidized loan, you are responsible for paying the interest on the loan. The interest on an unsubsidized loan begins to accrue immediately after the funds are disbursed.

Subsidized and Unsubsidized Federal Stafford Loans are made to students attending school at least half-time, which is 6 semester hours. During the summer, a student must enroll in a total of six semester hours to qualify as half time for loan purposes.

Loan funds for Subsidized and Unsubsidized Federal Stafford Loans will be received at TWU through electronic funds transfer (EFT) and credited to your student account.  Lenders of alternative student loans send loan funds to TWU by means of a paper check.  Federal Perkins Loans and Nursing Student Loan funds will be credited to your TWU Student Account after all promissory notes have been signed and loan counseling completed (required each year for Federal Perkins Loans and Nursing Student Loans).  After all University charges have been paid, any credit balance remaining will be refunded to you. (In order to receive a loan you must be enrolled a minimum of 6 semester hours.)

All first-time Federal Perkins Loan borrowers will not have funds released until 30 days after the start of the semester.

The lender for your Federal Perkins Loan is Texas Woman's University. TWU utilizes the loan billing services of ACS, Inc.  After you graduate or drop below half-time enrollment, all general billing questions should be directed to ACS at 800-826-4470, ext. 2810. Questions regarding forbearance or deferment should be directed to ACS at 630-620-2810. In addition, your promissory note provides information regarding cancellation, deferment, and forbearance benefits.
 
The lender for your Nursing Student Loan is Texas Woman's University. TWU utilizes the loan billing services of ACS, Inc.  After you graduate or drop below half-time enrollment, all general billing questions should be directed to ACS at 800-826-4470, ext. 2810. Questions regarding forbearance or deferment should be directed to ACS at 630-620-8210. In addition, your promissory note provides information regarding cancellation, deferment, and forbearance benefits.
Responsible management of your student loan is easier when you understand the organizations involved in your student loan.

The Federal Government created the Direct Loan Program, which includes the Subsidized Federal Stafford Loan, Unsubsidized Federal Stafford Loan, Graduate PLUS Loan, and Federal Parent Loan for Undergraduate Students. The Federal Perkins Loan and Nursing Student Loan programs are also federal loan programs. The Federal government makes the rules and regulations governing the loan programs.

Education Institutions are key participants in the student loan process. The financial aid office determines loan eligibility and processes all requests for student loans. TWU is the lender for the Federal Perkins Loan and Nursing Student Loan.

Secondary Markets purchase student loans from lenders. If a secondary market purchases your loan, you will be notified that you should make your payments to the new owner.

Servicers are companies that specialize in the day-to-day management of student loans (such as payment processing, name and address changes, deferment processing, etc.). If your lender or secondary market notifies you that your loan has been assigned to a servicer, you should send your monthly payment directly to the servicer. Texas Woman's University utilizes the services of ACS Inc., for billing Federal Perkins Loans and Nursing Student Loans, and payments should be sent to ACS, Inc., P.O. Box 3295 Milwaukee, WI 53201-3295.

Effective July 1, 1999, the Master Promissory Note (MPN) became effective for Subsidized and Unsubsidized Federal Stafford Loans. The MPN is a new, simplified method of applying for and receiving Federal Stafford Loan funds. The MPN is a multi-year promissory note. If you are a new direct loan borrower, you can complete your MPN on line at https://studentaid.gov/.  You can then print a completed copy of the MPN for your records.

For the initial and any subsequent loans, TWU will award the maximum amount of Stafford Loan funds you are eligible to receive annually, based on income and educational costs. You will receive an award notification letter indicating your Stafford eligibility. At that time, you will have the opportunity to reduce or cancel the loan amount. In addition, you will be notified in writing no later than 30 days after TWU credits your student account with your loan funds. You may cancel all or a portion of your loan if you inform TWU that you wish to do so within 14 days after the date TWU sends you the notice.

Rights and responsibilities

You must notify your lender, or their servicer, and the Financial Aid Office if you have any of the following changes:

• You drop below half-time enrollment status
• You change your name, address, or telephone number
• You withdraw from the university
• You transfer to another school
• You graduate from the university
• You have a change in your expected graduation date

As a student loan recipient, you have the following rights:

• You are entitled to a copy of your application and the promissory note you signed.
• If you are borrowing through the FFELP program, you will receive a disclosure statement informing you of the interest rate and estimate of your total interest charges and total indebtedness.
• Before your payments begin, you are entitled to receive a repayment schedule.
• Your lender must notify you in writing if your loan is sold to a secondary market.
• If you are unable to make your payments, you may request a deferment or forbearance. Contact your lender or secondary market for more information.

When do I start to pay?

After you graduate, leave school, or drop below half-time enrollment, you have a six month grace period before you must begin repayment on the Subsidized and Unsubsidized Federal Stafford Loan, Graduate PLUS, and College Access Loan. The Federal Perkins Loan and Nursing Student Loan have a nine month grace period. Repayment of the Parent Loan for Undergraduate Students begins within 60 days after the loan is fully disbursed.

If you return to school at least half-time before that six month period ends, you may postpone repayment while you are in school. If you enroll at another school, you must contact your loan servicer to obtain deferment forms.

You may prepay all or part of the unpaid balance on your student loan at any time without penalty. If you have more than one Stafford Loan, be sure to specify which loan you are prepaying.

As a student loan borrower, you must make payments on your loans even if you do not receive a payment booklet or a billing notice. The lender sends payment coupons or billing statements as a convenience for the borrower. Not receiving them does not relieve the borrower of his/her obligation to make payments. If you do not pay by the due date, your lender or secondary market may charge a late fee. Ignorance of your payment responsibilities can lead to default.

Deferment and forbearance

If you are having difficulty paying back your student loan, you may apply for either a deferment or forbearance.

A deferment allows a borrower to postpone loan payments for a specified period of time. For Subsidized Stafford Loans, the interest is paid by the U.S. Department of Education during the deferment period. If you have an Unsubsidized Stafford Loan and/or a Graduate PLUS Loan, interest will accrue and be applied to your loan principal at the end of your deferment, or you can elect to make interest payments while you are in school.

Forbearance allows you to temporarily stop or reduce your payments while interest continues to accrue on your account. During the forbearance period, you may make interest-only payments, postpone payments, or make smaller payments than originally scheduled. Forbearance is granted at the discretion of your lender or secondary market in cases of temporary financial difficulty.

After you apply for a deferment or forbearance, you are still responsible for your loan payments. It normally takes 2-3 weeks to process a deferment or forbearance. You should continue to make your loan payments until notified in writing that the deferment or forbearance has been granted. Otherwise, your lender may consider your payments past due and your credit rating may suffer.

Your student loan is a serious obligation that must be repaid. If you fail to repay this obligation, you default on your student loan. A defaulter is a borrower who has broken his or her promise to repay their loan. After 180 days have passed without a payment on a student loan, the loan is considered to be in default. This is what happens if you default on a student loan:

• Your debt will be reported to major credit bureaus. If you become 60 days or more past due in making your loan payment, your delinquency and/or default will be reported to a credit bureau.  The negative credit rating will remain on your record for 7 years.  This will seriously affect your credit rating and you could be denied credit cards, car loans, home loans, etc.
• You will not be eligible for further federal student aid, as well as deferments, forbearances, and loan consolidation on other education loans you may having outstanding.
• Your loan may be turned over to a collection agency, increasing your total debt by late fees, additional interest, collection costs, court costs, attorney fees, and other costs.
• Your federal or state income tax refund may be seized.
• Your lender may declare the entire unpaid balance of principal and interest immediately due and payable.
• Your employer, at the request of the federal government, can garnish part of your wages. and if win the lottery, the government may receive the funds.
• Your account may be assigned to a guarantee agency, which will continue to collect the balance due.
• Holds may be placed on your university records (i.e., transcripts).

Loan consolidation and other options

You can request a single lender or secondary market to combine the principal balances from your student loans into a single loan with new terms. A new interest rate is set and a longer repayment period is provided (up to 30 years). Be sure to consider the following before deciding to consolidate your loans:

• Consolidated loans have a higher fixed interest rate.
• If you consolidate your loans, you may lose certain deferment and forbearance rights.
• If you choose a longer time to repay, your monthly payments will be reduced but you will also incur higher total interest costs.

Stafford Loan recipients have four repayment options--Standard Repayment, Extended Repayment, Graduated Repayment, and Income Contingent Repayment.

• The Standard Repayment option provides for a fixed payment of a minimum of $50 per month for up to 10 years.
• The Extended Repayment option provides for $50 minimum monthly payments, but you can take from 12 to 30 years to repay your loans.
• The Graduated Repayment option provides for payments that start out at one level and increase every two years. The repayment period varies from 12 to 30 years.
• The Income Contingent option permits your monthly payment amount to be calculated on the basis of your Annual Adjusted Gross Income and total amount of your Stafford Loans. To participate in this plan you must authorize the Internal Revenue Service to release information about your income to the U.S. Department of Education. This information will be used to calculate and adjust your repayment amount annually. The maximum repayment period is 25 years.

A discharge releases you from all obligations to repay your student loans. You can receive a discharge only with proof of:

• Total and permanent disability
• Death
• Bankruptcy (only in certain cases)

Effective July 1, 2000, the Office of the Ombudsman was established to assist borrowers that have disputed the terms of their William D. Ford Federal Direct Loan, Federal Family Education Loan or Federal Perkins Loan in writing and the institution has not resolved the dispute. The Ombudsman can be contacted at the following address:

Office of the Ombudsman
877.557.2575
U.S. Department of Education
FSA Ombudsman
830 First Street NE
Fourth Floor
Washington, DC 20202-5144

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