Borrowers of Direct Stafford Loans who are no longer enrolled at least half-time at Pacific must complete federally mandated exit counseling as soon as they cease enrollment. This is a federal regulation and applies to all students who have graduated, officially withdrawn, dropped below half-time enrollment, transferred to another institution, or simply ceased enrollment at Pacific. You may have been required to complete exit counseling in the past, but federal regulations require that you complete exit counseling every time you meet one of the above conditions.
Exit counseling is completed online, in about 30 minutes, through the Department of Education at studentloans.gov. You will need your Federal PIN to log in. If you have lost or forgotten your PIN, you may apply for another at www.pin.ed.gov.
Note: Students who have borrowed a Perkins loan must complete online exit counseling separately. Approximately a month prior to graduation, the Student Loan Office will email you instructions to your Pacific email address. For additional Perkins exit counseling information refer to the Loan Exit Interview Information on Pacific's Student Loans Office webpage.
Exit counseling will help you understand your rights and responsibilities as a student loan borrower and will provide useful tips and information to help you manage your loans. If, after completing the exit interview and reading this document, you have additional questions please read the Direct Loan Exit Counseling Guide.
Here are some common terms and general information your should know, associated with exit counseling. Links will take you to information about the terms, listed further on the page:
You have several repayment options available to you with Direct loans. You will be placed into a Standard Repayment plan if you do not choose one. You can change repayment plans while you are repaying your loan.
Fixed monthly payments for up to 10 years.
Payments that start off lower at first, and then gradually increase, usually every 2 years. The loan must be repaid in 10 years.
Fixed or graduated monthly payments over a period of time, not to exceed 25 years. To be eligible for this repayment plan, you must have more than $30,000 in Direct loan debt and you must not have had an outstanding balance on a Direct loan on October 7, 1998.
Your monthly payment is adjusted each year based on your annual income (and your spouse's income, if you're married), your family size, and the total amount of your Direct loans. After 25 years, any unpaid loan amount will be forgiven. (This plan is not available to parent Direct PLUS loan borrowers.)
Your monthly payment is capped at an amount that is affordable based on your income and family size. To find out if your federal student loan debt is high enough to qualify for this plan, use the repayment calculators on Student Aid on the Web at www.studentaid.ed.gov or on your loan servicer's site. Your monthly payment amount may be adjusted annually. If you repay under IBR for 25 years and meet other requirements, any remaining balance will be forgiven. (This plan is not available to Parent Direct PLUS loan borrowers.)
Your payment will vary depending on the amount and type of loans that you've borrowed, the repayment plan that you select and, potentially, your income. To calculate your estimated loan payment under different repayment plans, go to Student Aid on the Web at www.studentaid.ed.gov and select "Repayment Plans & Calculators under Repaying Your Loans".
If you think you will have trouble making your student loan payments, contact the Direct Loan Servicing Center immediately. They can help you change your payment plan to one that better fits your budget, or discuss deferment or forbearance options that will allow you to postpone your payments. Ask for help before you fall behind and become delinquent.
Delinquency occurs if your monthly payment is not received by the due date. Warning notices will be sent to remind you of your obligation to repay your student loan and the consequences of default. Late fees may be added, and your delinquency will be reported to one or more credit agencies.
If your Direct loan becomes 270 days delinquent your loan will go into default. If you default:
- The entire balance loan balance becomes immediately due and payable
- Loan is reported in Default to national credit agencies which damages your credit rating
- Federal income tax refund may be withheld and applied to loan repayment
- Loan sent to collection agency with fees and costs, possibly court costs and attorney fees
- Loss of eligibility for federal student aid
- Loss of deferments options
- An employer, at request of loan holder, may withhold part of your wages to apply to loan repayment
- Potential loss of eligibility for professional licensure in some states
Consolidation happens when you combine multiple Direct loans, with various repayment schedules, into one loan. The result is one loan with one monthly payment. All Direct loans are eligible for consolidation.
Benefits of Consolidation
- Possible lower monthly payment.
- The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.
- Repayment may be extended for up to 30 years.
- You receive a fixed interest rate on your consolidation loan.
- One single payment to one servicer.
Before consolidating, evaluate the benefits provided by your servicer. If you received a rebate you may have to repay that discount if you consolidate.
- Although your monthly payment may be less, you are paying more in interest over the life of the loan.
- You will lose your grace period on all loans included in the consolidation.
- Private loans are not eligible for consolidation, and must be repaid directly to your private loan lender. Refer to your loan applications to find your lender or servicer.
To learn more about consolidation, or to apply for a consolidation loan, visit www.loanconsolidation.ed.gov.
After you graduate, leave school or drop below half-time enrollment, you are entitled to one grace period for Direct and Perkins loans. During this time, which is typically six months for Direct and nine months for Perkins, you do not have to make payments.
The interest on subsidized loans is paid by the federal government during your grace period. On unsubsidized loans, you are responsible for the interest, and the unpaid interest is capitalized which is added to the loan principal at the time of repayment.
Repayment begins the day after your grace period ends; your first payment is due within 60 days. You should receive communication from the Direct Loan Servicing Center during your grace period. If not, contact the servicing center directly.
Deferment allows you to temporarily postpone the payment of your loan. Deferments are not automatic; you must apply and be approved by your servicer. The most common reasons for deferment include:
- Returning to school at least half-time
- Loss of job or inability to find a job
- Economic hardship
- On active duty during war, national emergency or military operation
During periods of deferment on subsidized Direct loans, the principal payments are postponed and interest is paid by the federal government. However, you are responsible for interest that accrues on any unsubsidized Direct loan. If you do not meet the requirements for a deferment, you may request forbearance from your servicer.
If you do not qualify for a deferment, you may be eligible to request forbearance from your servicer. Forbearance is the temporary postponement or reduction in your month payment. Often the amount of time it takes to repay your loan is extended. Interest continues to accrue during the period, so if you do not make interest payments it will increase your total loan balance. There are several different types of forbearance available depending on your situation. Forbearance must be approved by your servicer.
The loans you received at Pacific were made under a Master Promissory Note (MPN). The MPN is a legally binding agreement and contains the terms and conditions of your loans. You should keep the MPN and any other loan documents in a safe place. The MPN can generally be used for multiple loans for up to 10 years.
Loan forgiveness programs promote careers in fields that are under-serviced or fields that meet particular community needs. Depending on your situation, all or a portion of your loans may be cancelled for forgiven through these programs.
Public Service Loan Forgiveness
Under the Public Service Loan forgiveness Program, you can qualify for forgiveness of the remaining balance due on your Direct loans after you have made 120 payments while employed full-time by certain public service employers. To qualify, you must make payments under one of the following repayment programs: Income Based Repayment, Income Contingent Repayment, or Standard Repayment. Additional information is available at www.studentloans.gov.
Teacher Loan Forgiveness
The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Under this program, individuals who teach full-time for five consecutive, complete school years in certain elementary and secondary schools that serve low-income families and meet other qualification may be eligible for forgiveness of up to a combined total of $17,500 in principal and interest on their Direct loan. Additional information is available at www.studentloans.gov.
In certain cases, all or a portion of your Perkins Loan can be cancelled. Perkins loans can be cancelled for service as a full-time teacher in certain areas, a full-time librarian, law enforcement, public defender, firefighter, full-time nurse or medical technician, full-time family service provider, for certain military service and for Peace Corps or ACTION volunteers. More information on Perkins Loan cancellation can be obtained by contacting the Student Loan Office at 209-946-2446.
The Student Loan Interest Deduction is a deduction of up to $2,500 for student loan interest paid during the year. This deduction is available in addition to the American Opportunity Credit, Lifetime Learning Credit or Tuition and Fees deduction. (Tax laws change frequently. Please contact your tax advisor or preparer for information about your specific tax situation.)
Refer to the Direct Loan Exit Counseling Guide for Money Management tips.