Financial Aid
Stafford Loan Exit
Mandatory Exit Counseling Session for Federal Stafford Loan Borrowers
If you borrowed a Federal Stafford Loan while in attendance at Washington College, federal regulations require Washington College to provide, and borrowers to complete, an Exit Counseling Session prior to leaving school. Federal Stafford Loan exit counseling must be completed by students who drop below half-time, take a leave of absence, withdraw, or graduate. The online exit counseling session takes approximately 20-30 minutes to complete and provides students with pertinent information regarding deferment and repayment provisions.
Students are required to provide names, addresses, and telephone numbers for a next-of-kin, two personal references at different addresses, and future employer if known. The collection of this data is a federal requirement and will remain confidential. At the end of the session your results will be electronically transmitted to Washington College.
For Stafford Loans serviced by Sallie Mae, click here. |
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For Stafford Loans serviced by Great Lakes, click here. |
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**PLEASE NOTE: At the appropriate time, the Washington College Office of Student Aid will provide you with documentation that will assist you in completing the online exit interview. Your Federal Stafford Loan lender, guarantee agency, servicer, and the amount of Federal Stafford Loans you have borrowed at Washington College will be listed on this documentation. You will need this information and reference information in order to complete the online exit counseling session.
If you have any questions regarding this information, please contact our office.
IMPORTANT INFORMATION REGARDING REPAYMENT OF FEDERAL STAFFORD LOANS
Repayment Terms and Options
Stafford Loans have standard, 10-year repayment terms and require a minimum payment of $50 per month. Repayment will begin following a 6-month grace period. The standard repayment plan is the least expensive plan.
If you find your payments to be too high, alternative payment plans are offered. These plans include Graduated Repayment, Extended Repayment, Income-Sensitive Repayment, and Consolidation.
A Graduated Repayment plan typically reduces monthly payments for up to the first four years of repayment. Payments then increase over the remaining years to ensure the loan is paid in full in 10 years.
An Extended Repayment plan extends the repayment term of your loan beyond the standard 10 years. Eligibility for extended repayment is determined by the balance of the loan. This plan allows a repayment plan of up to 25 years.
An Income-Sensitive Repayment plan offers a monthly payment amount based on your income. Lenders and servicers offer different options. The monthly payment must be at least equal to the monthly accrued interest. This is the most flexible plan, but it can be the most expensive overall, and must be reevaluated on an annual basis. Check with the agency handling your loan to see if you qualify for this option.
Consolidation pays off your existing student loans and creates a new loan. Depending upon the total balance of the consolidation loan, the repayment term may be extended beyond 10 years. Consolidation generally offers a variety of repayment plans, including both level and graduated options. You can typically only consolidate after you are no longer enrolled at least half-time in school.
Default
If you cannot make your payments, it is important to call your lender or servicer! If you fail to make payments and fail to make repayment arrangements (such as a deferment or forbearance), you will eventually default on your loan. Defaulting on a loan will negatively affect your credit bureau report, which in turn may affect your ability to receive future credit for a car loan or a mortgage.
There are additional costs charged to you when a loan defaults. You may be subject to the following:
- Attorney fees
- Collection costs
- Withholding of income tax refunds
- Wage garnishment
- In certain states, a professional license may be revoked
- Ineligibility for future financial aid
Your lender does not want you to default on your loan and will make every effort to work out a payment arrangement. Defaulting on a student loan affects a lot of people. Your lender, school, guarantor, the Department of Education, and anyone who pays federal taxes are impacted when a student loan defaults. Most importantly, it affects your life!
Consolidation
Loan consolidation involves paying off your existing student loans and creating a new loan. Depending upon the total balance of the consolidation loan, the repayment term may be extended beyond 10 years. Consolidation also offers a variety of repayment plans. These range from the standard plan, where you would have equal payments over the life of your loan, to different graduated plans, where your payments would fluctuate over the term of your loan.
Described below are a few pros and cons of consolidation.
Pros
Single Lender/ Single Payment — If you have multiple lenders for your student loans, you may be making multiple payments each month. Consolidation combines these loans, giving you only one monthly payment to make to a single lender.
Lower Payments — Depending upon your loan balance, consolidation can extend your repayment term beyond the standard to years. An extended term reduces monthly payment amounts.
Sample Repayment Timetable for Consolidation Loans
| Sum of Consolidated Loan Balance Plus Balance of Other Educational Loans | Maximum Repayment Period |
| Less than $7,500 | 10 Years |
| $7,500 or more, but less than $10,000 | 12 Years |
| $10,000 or more, but less than $20,000 | 15 Years |
| $20,000 or more, but less than $40,000 | 20 Years |
| $40,000 or more, but less than $60,000 | 25 Years |
| $60,000 or more | 30 Years |
Fixed Interest Rate — The interest rate for a consolidation loan is the weighted average of all loans consolidated rounded up to the next 1/8 of 1 percent, not to exceed 8.25%. The interest rate on a consolidation loan is fixed for the lifetime of the loan. This could be to your advantage if you have a low interest rate at the time you consolidate.
Cons
Longer Repayment Term — While consolidation may allow you to extend your repayment term beyond 10 years (depending upon your loan balance), a longer repayment term may cost you more money. For example, you will pay more interest over a 20-year repayment term then you will over a 10-year repayment term.
Fixed Interest Rate — Since Stafford Loans have a variable interest rate, it is possible for their rate to drop at a later date. After consolidation, you cannot refinance to receive that lower rate.Carefully weigh the pros and cons of consolidation before making a decision. If you only have one lender, you must contact your current lender to obtain a consolidation loan. If you have multiple lenders or your lender does not offer consolidation, you can consolidate with the lender of your choice.
Loan Forgiveness
When finished with school, you may be unhappy with your education or unable to find a job in your field of study. Unfortunately, this does not relieve you of having to repay your student loans.
There are certain situations in which your loan would be forgiven and you would be relieved of your debt. In the following scenarios, your loan guarantor would pay your loan in full.
Death — If you die, your guarantor will forgive your loan.
Total and permanent disability — If you become totally and permanently disabled, and you are no longer able to work, you may be eligible to have your loan forgiven. Contact your lender or servicer for specific requirements.
Teacher Loan Forgiveness — If you are a teacher, took your first student loan out after October 1, 1998, and meet other criteria, up to $5,000 of your loan balance may be forgiven by the federal government. To determine if you are eligible for forgiveness, contact your lender or servicer.
Childcare Forgiveness — If you are working as a child care provider and meet other criteria, you may be eligible for loan forgiveness. To determine your eligibility, contact your lender or servicer.
Bankruptcy — Student loans are generally not forgiven in a bankruptcy. If you file for bankruptcy, your student loans will be placed in forbearance until the bankruptcy is discharged (completed), at which time regular monthly payments would be due. You may continue to make your student loan payments during this time if you are able. Contact your lender or servicer if you file for bankruptcy.
Contact Information
Your Federal Stafford Loan servicer will have the most up to date information regarding the status, balance, repayment plan, and terms of your Federal Stafford Loan. Listed below are the two servicers that the majority of Washington College students have. If you have any questions on who your servicer is, please contact the Office of Student Aid at 410-778-7214.
Sallie Mae Servicing — 1-888-2SALLIE or http://www.salliemae.com
Great Lakes Higher Education Corp. — 1-800-236-4300 or http://www.mygreatlakes.com
You may contact the Financial Aid office by phone at 410-778-7214 or by e-mail at fa_office@washcoll.edu.
300 Washington Avenue, Chestertown, Maryland 21620 | 410-778-2800 | 800-422-1782