Default Prevention
Keeping Up with Your Loan Payments
You’ve gone to school, and now it’s time for the not-so-fun part: paying back your student loans. It’s important to understand your rights and repayment options, even before borrowing, so you can prevent defaulting on your loans.
Student loans fall into two categories: Federal Family Education Loan (FFEL) and Direct Loans (William D. Ford Direct Loan Program). Loans disbursed at San Jac before Summer 2010 are FFEL. In these cases, the lender is a financial institution, such as a bank or credit union. Loans disbursed during the Summer 2010 term and after are Direct Loans. With a Direct Loan, the lender is the Federal Government.
Regardless of which loan you have, it’s important to understand your rights and responsibilities.
You have a right to:
- Have a grace period before payments are due
- Make extra payments on your loan without penalty (also called prepaying)
- Request a copy of your Master Promissory Note (MPN)
- Request documentation that your loan is paid in full
- Choose a repayment plan
- Be informed of your repayment date
- Be informed and provide consent of any changes in the terms of your loan
You have a responsibility to:
- Complete an exit counseling session
- Repay your loan
- Notify your lender with current contact information
- Make timely monthly payments
- Notify your lender of your eligibility for a deferment or cancellation of loan and/or payments
- Use proceeds of loans for educationally related purposes
- Make payment even if you do not receive a payment statement
Not sure where to begin?
Use our budget calculator to help determine your expenses and what you can afford to make for monthly payments.
As a student loan recipient, you are required to complete an exit counseling session. Exit counseling helps you to further understand your rights and responsibilities as a student loan borrower. Exit counseling is required when you:
- Graduate
- Drop below a half-time enrollment status
- Withdrawal from all of your classes
- Stop attending
- Transfer to another school
Complete your exit counseling session online. San Jac will be notified electronically when you have successfully completed the
course.
A hold will be placed on your San Jac student account if you do not complete an exit
counseling session. This may affect your ability to make changes to your registration
or request a transcript.
Student loan deferment is a way to temporarily stop making payments on your loans. While enrolled at San Jac, your loan may qualify for an in-school deferment. Please note that while in deferment, your loans may still accrue interest.
Federal Student Loans:
San Jac is partnering with the National Student Clearinghouse (NSC) to provide enrollment
and degree verification to the U.S. Department of Education (USDE). For your loans
to be placed in deferment, you must be enrolled at least six credit hours.
Enrollment information is sent electronically to the NSC two weeks after the term has started. Once the electronic file is processed, it takes 30 days for your account to be updated. The USDE will backdate your account to the start date of the term. It will also waive all past due payments and accrued interest for the term.
Federal PLUS Loans
PLUS loans are for parents who take out loans for their children. For parents to be eligible for a deferment on your PLUS loan, your child must be enrolled at least six credit hours at San Jac.
This deferred status does not occur automatically. You must call the federal loan servicer and request to have the PLUS loan placed in a deferred status.
Private Loans
Private loan lenders can not obtain the enrollment information from the NSC. You must
complete a student deferment or forbearance form two weeks after the term starts. Send completed forms to:
Fax: 281-669-4374
Email: fastudentloans@sjcd.edu
After you graduate, leave school, or drop below six credit hours, your loans enter a grace period. This one-time grace period lasts six months. Your repayment period begins the day after your grace period ends. At that time, your first payment will be due.
Your loan servicer will notify you with information about repayment. When it comes to repaying your student loans, you can select a plan that is right for your financial situation. Generally, you have anywhere from 10 to 25 years to repay your loans.
You can calculate your estimated loan payments using the Federal Student Aid calculator or Finaid.org.
Our sample repayment plan gives you an example of how common repayment options may look.
Repayment Options
Standard Repayment
With the Standard Repayment Plan, you pay a fixed amount each month until your loans
are paid in full. Monthly payments are at least $50, and repayment is generally completed
within 10 years.
Graduated Repayment
Payments start low and increase approximately every two years. The repayment period
is generally up to 10 years.
Extended Repayment
Available to borrowers with more than $30,000 in federal student loan debt. Payments
may be fixed or graduated, and repayment can extend up to 25 years. Lower monthly
payments typically result in paying more interest over time.
Income Based Repayment (IBR)
Monthly payments are based on income and family size. Borrowers must recertify income
annually. Depending on eligibility and circumstances, any remaining balance may qualify
for forgiveness after the repayment period. IBR remains available to eligible borrowers
with loans disbursed before July 1, 2026.
Direct Consolidation Loan
A Direct Consolidation Loan combines multiple eligible federal student loans into
one loan with a single monthly payment. Consolidation may lower monthly payments by
extending repayment but may increase the total interest paid overtime.
Borrowers with Loans Disbursed On or After July 1, 2026
Repayment Assistance Plan (RAP)
RAP is the primary income-based repayment option for new borrowers. Monthly payments
are based on income, and any remaining balance may be forgiven after 30 years of qualifying
payments. Most Direct Loan borrowers are eligible, excluding Parent PLUS borrowers.
New Standard (Tiered Standard) Repayment Plan
Borrowers with loans disbursed on or after July 1, 2026 are generally placed into
the new Standard Repayment Plan unless they choose RAP. Monthly payments are fixed,
and repayment terms vary based on the total loan balance, ranging from 10 to 25 years.
Expiring or Discontinued Repayment Plans
SAVE Plan
The SAVE Plan is being phased out and is no longer available for new enrollment. Current
SAVE borrowers are being transitioned into other eligible repayment plans.
Pay as you Earn Repayment Plan (PAYE)
PAYE is being sunset and will no longer be available after July 1, 2028. Existing
borrowers should review alternative repayment options before the transition deadline.
Income Contingent Repayment (ICR)
ICR is also scheduled to be discontinued by July 1, 2028. Borrowers currently using
ICR should review their eligibility for IBR or RAP.
Revised Pay as you Earn Repayment Plan (REPAYE)
REPAYE has been replaced by SAVE and is no longer available as a repayment option.
If you are having trouble making payments, contact your student loan servicer right away. Your loan servicer will work with you to determine the best option for you. And don’t forget, we’re always here for extra help if you need it! Your options include:
- Finding a payment plan that works for you. - There are many different payment options, many of which are income driven. Check out our list above for all of the options.
- Postponing payments through deferment. - You must qualify for deferred payments. Deferment suspends payments, but depending on your loan, interest may still accrue.
- Postponing payments through forbearance. - You may be able to postpone payments through forbearance if you do not qualify for a deferment. Interest continues to accrue while loans are in forbearance.
- Canceling all or part of your student loans. - You may qualify to cancel all or part of your student loans. Visit the Federal Student Aid website for more information on how to apply.
Delinquency
If you stop making payments on your student loans, your account will become delinquent.
A delinquent loan can result in late fees and affect your credit score. It will also
result in a hold on your San Jac student account.
What is Default?
A student loan will go into default when you fail to make payments and your account is 270 days past due (delinquent). Once the loan is considered in default, the entire balance is due immediately. This includes the principal, interest, and collection fees.
If you default, your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government can all take action to recover the money you owe. Some consequences of default include:
- National credit bureaus can be notified of your default, which will harm your credit rating. This can make it hard to buy a car or house.
- You will be ineligible for additional federal student aid if you decide to return to school.
- Loan payments can be deducted from your paycheck.
- You will have to pay late fees and collection costs on top of what you already owe.
- You can be sued.
Options after Default
You have three options to remove the default status:
- Pay the loan in full - This is the fastest way to resolve defaulted loans.
- Loan rehabilitation - During rehabilitation, you can regain eligibility for financial aid after making six voluntary, consecutive monthly payments on time.
- Consolidate your loans - You can consolidate by combining all your federal education loans. This is an option as long as the loans are currently in a grace period or repayment status.
More information for defaulted student loan debt can be found at MyEdDebt.ed.gov.
Here are some simple tips to help you manage your money wisely and be a responsible student borrower!
- Create a spending budget. Loan payments are fixed, just like your rent or credit cards, so include it on your budget.
- Read all of your mail and email to stay up to date on your loan status.
- Set up an online account with your lender or servicer. Many provide automatic notification options and smartphone apps to remind you of payment deadlines.
- Get your full tax refund by using education costs as deductions.
Get more information on budgeting by visiting the Federal Student Aid website.
The U.S. Department of Education releases official cohort default rates (CDR) to all schools. Loan default rates are calculated by measuring how many students are in default three years after they have graduated or stopped attending San Jac. The default rate only applies to federal loans, and does not include private and/or state student loans.
In 2018, a total of 1,223 San Jac students entered loan repayment. After three years, 10.1 percent, or 124 of those students, defaulted on their loans. Our National CDR for that year was 7.3. Our national CDRs for 2016 and 2017 were 10.1 and 9.7, respectively.
Why is this important? Knowing our CDR can help you analyze how well San Jac positions its students to pay off their loans after graduation. To put it in perspective, schools can get benefits if their national CDRs stay below 15. They can also receive sanctions or be prevented from participating in federal aid programs if their CDRs are 30 or above. So that tells us that our students are well-positioned to make payments on their loans.
Use these resources to find out more about your student loans.
San Jac Default Prevention Coordinator:
Elena Oliver
Phone: 281-991-2645
Fax: 281-669-4374
Email: Elena.Oliver@sjcd.edu
Navient: 1-888-272-5543
Nelnet Education Planning and Financing: 1-888-486-4722
Trellis (Formerly Texas Guaranteed or TG)
National Student Loan Data System (NSLDS) for Students
Student Loan Ombudsman’s Office
MyEDDebt.gov Federal student aid’s website with information about defaulted loans.
Please note that FedLoan Servicing is no longer active.
