Frequently Asked Questions
| Don’t see the answer you’re
looking for? Just call Customer Service! We're glad to help. |
|
What
is a grace (Type G) deferment?
A grace deferment
is granted to borrowers who re-enter school before their original
grace period ends. Grace deferments are processed for a given
for “period of time” and renew the borrower’s
original grace period.
What is a student (Type S) deferment?
A student deferment is granted to borrowers who re-enter school after their original
grace period ends. Student deferments deter the actual bills for
the period in which the borrower is enrolled. Following this type
of deferment, the borrower is granted a six-month post-deferment
grace period.
How far in advance can a student deferment (Type S) be processed?
We process student deferments (Type S) through the current quarter/semester for most schools as long as the borrower submits a deferment form. However, the system will allow a form to be processed up to 18 months in advance. Deferments processed via enrollment data received from the National StudentClearinghouse (NSC) are processed up to a year in advance (through the current academic year).
What
types of deferments defer principal?
Hardship deferments and forbearances defer principal; however,
interest continues to accrue and can be billed during or after
the deferment. Economic Hardship,
unemployment deferments, and student deferments (Type S) defer principal and interest and are followed by a six-month post-deferment
grace period.
Forbearance is a loan benefit that allows for the temporary cessation or reduction of loan payments. Forbearance defers the principal for a specific length of time, but interest still accrues on the loan. Depending on the payment plan, the interest on the loan may be billed during or at the end of the forbearance period. The time limit for forbearance is 36 months.
How do you determine forbearance?
We typically grant forbearance in the following circumstances.
If a borrower is asking for forbearance based on expenses compared to income, we must have a pay statement and documents to support their expense entries. We do not and cannot grant forbearance without substantiating proof.
We subtract total monthly expenses from gross monthly income. If the difference in these two figures is between $200-$300 or less or if expenses exceed income, we grant a forbearance. Otherwise we deny the forbearance.
There is no grace period after the forbearance period is completed, and regular billing starts immediately. Forbearance cannot be started during a grace period. We cannot apply it to a future dated form, because interest will still accrue. There is also a three-year time limit for loan forbearance.
Can an economic hardship be used for Temporary Total Disability?
No. If the note date is on or after 07/01/93, a forbearance ("M" deferment) should be processed for a temporary total disability or prolonged illness. Loans with a note date from 10/01/80 to 07/01/93 are eligible for a Temporary Total Disability (Type D) for up to three years.
Borrowers are also eligible for this type of deferment if they are caring for a spouse who is temporarily totally disabled. Loans with a note date from 07/01/87 to 07/01/93 with a nine-month original grace period are eligible for a temporary total disability for the borrower or a disabled dependent (Type B). A six-month post-deferment grace period will follow a temporary total disability deferment.
What are the provisions for unemployment
(Type U) deferments?
The borrower is eligible for an unemployment deferment if they are currently unemployed or if the borrower is working part time and actively seeking full-time employment. We ask the borrower to provide a list of firms where he/she has applied or has registered with a public or private employment agency. We also ask for the name of the agency, the address, a contact name and telephone number. The maximum length of deferment for unemployment is three years.
For more specific eligibility requirements for Unemployment Deferment, click here:
What are the provisions for an economic hardship (Type K) deferment?
A borrower could qualify for economic hardship for up to three years under the following conditions.
| 1. | The borrower has submitted proof of deferment (for economic hardship only) for other loan programs (i.e. Stafford or Federal Direct loan is deferred). |
| 2. | The borrower has verbally requested an economic hardship on his/her Perkins loan based on deferment of other loan programs (i.e. Stafford or Federal Direct). |
| 3. | The borrower is receiving federal or state public assistance such as Aid to Families and Dependent Children, Supplemental Security Income, and Food Stamps. |
| 4. | The borrower is working full time (at least 30 hours /week) and his/her total monthly gross income is less than the federal minimum wage or 100% of the federal poverty line for a family of two. |
| 5. | The borrower is working full time (at least 30 hours /week) and his/her total monthly gross income (TMGI) is less than the federal minimum wage times 2 or the federal poverty line for a family of two times 2 minus the borrower’s monthly student loan payments. |
| 6. | The amount of the borrower’s student loan payments are at least 20% of his/her TMGI and the difference between the TMGI and the borrower’s debt burden is less than 220% of the monthly minimum wage or 100% of the federal poverty line for a family of two. |
Note: To determine the poverty line for a family of two, go to http://aspe.hhs.gov/poverty.
For more specific eligibility requirements
for Economic Hardships, click
here.
Does interest accrue during an economic hardship?
No. Interest does not accrue during the deferment or the six-month post grace period.
What is a Type "J" military deferment?
A military deferment may be granted to borrowers who are serving on active duty during a war or other military operation, or national emergency, or performing qualifying National Guard duty during war or other military operation or National Emergency.
Your borrower may download the appropriate military deferment form from our Web site or send us a copy of his/her military orders. The borrower may also submit a written statement from his/her commanding officer or personnel officer.
What is a Type Z deferment? Can a Type Z deferment be processed while the borrower is in a grace period?
A Type Z deferment removes principal and interest for loans that are eligible for cancellation. Type Z deferments cannot be processed during a borrower’s grace period since he/she should be allowed the full benefit of their grace period.
What kind
of deferment can be processed for borrowers who are in jail?
Borrowers who are currently in jail are eligible for the same
types of deferments as other borrowers. Typically, economic hardships
and forbearances are used.
What is a cancellation?
Cancellation is the reduction of loan principal in exchange for providing service in an eligible field (see service fields below). The borrower is not responsible for repaying the portion of the loan that is cancelled, or forgiven.
What services can my borrower perform to qualify for partial or total cancellation on a Federal Perkins loan?
How does Campus Partners determine if a school qualifies as serving low-income students?
Campus Partners determines a school’s eligibility by consulting the Federal Register, an annual guide that identifies low-income student schools (where low-income students exceed 30% of the school’s total enrollment). Each state is given a quota of schools to be listed, and not all schools having high concentrations of students from low-income families will be listed. Click here to see if the school in question qualifies.
How can my borrowers determine if their loan qualifies for cancellation benefits?
Your borrower may download a cancellation form from our Web site or call our office at (800) 334-8609 to request a form. If you are a Modified customer, click here to download a form. If you are a Full Service customer, use this form.
When should my borrower file for cancellation?
Applying for a cancellation is a two-step process because a loan cancellation cannot be granted before the borrower has completed their specified length of service.
For example:
Your borrower has been hired to teach for a year in a field that qualifies for cancellation. The borrower should complete a deferment form in anticipation of cancellation. At the end of his or her year of employment, the borrower can apply to have his or her loan principal cancelled for that year.
How can my borrower get instructions on how to fill out the cancellation form?
The Campus Partners Web site provides help for borrowers filling out cancellation forms. Just go to "Cancellation Form Instructions."
How many hours is considered fulltime?
Thirty-two hours worked in a single week is usually considered full-time. If the borrower works less than 32 hours in a single week, and his or her employer certifies that they are considered full-time, the borrower may still qualify for cancellation benefits.
What percentage of your borrower’s loan will be cancelled?
The total percentage cancelled on a loan depends on the type and length of service that is being provided. To get the total percentage amount and the percentage rate, borrowers should refer to their promissory note or call Campus Partners at (800) 334-8609.
Is the completed cancellation form all that is required to obtain cancellation benefits?
If there is an asterisk next to the field of service in section A of the cancellation form, additional documentation must be submitted along with the form. If additional documentation is required for the field of service, the borrower should call Campus Partners at (800) 334-8609 before sending in the form.
What is a borrower paid collection cost (BPCC)?
Borrower paid collection cost, or BPCC, is the fee charged to the borrower by the collection agency. Most collection agencies charge a "contingency fee," which means collection costs are only earned by the collection agency when the borrower makes a payment. This is noted as "Collection Costs." The institution may also charge collection costs to the borrower, which is an actual or average cost that is assessed for the effort that the institution made to collect on the loan. This is coded as "Other Costs." These two categories allow schools to determine which costs belong to the school, and which are assessed by the collection agency.
Why are collection fees taken out of some collection payments and not on others?
Our system will only
automatically assess a fee, if:
1. |
a collection cost percentage is indicated on the loan, |
2. |
the institution has asked that all loans coded with a specific agency be assessed a specific percentage, or |
3. |
we have instructions from a school or agency to key BPCC. |
When a
payment posts to an account and collection costs are posted afterward
why doesn't the PAYR (Payment Reversal) screen show the fees paid?
Why does the PAYR Screen only show the original payment? If adjustments
are made (for example, collection costs are added to the loan)
why aren’t the adjustments reflected on this screen?
The PAYR (Payment Reversal) screen is a transaction screen used to reverse payments. If a
fee is posted after the payment is applied, the fee is backdated
to one day before the payment date to allow the fee to be assessed.
The PAYR screen is not intended to reflect reprocessing adjustments.
The on-line history of the account (HALL) should be used to review the distribution of payment between fees,
principal, and interest.
Why
does it take so long to post the payment after the collection
agency receives it?
The majority of collection agencies send an invoice only at month-end.
The invoice reflects their activity for the entire month. We usually
receive the invoice within the first two weeks of the following
month. Once the invoice is received, payments are posted within
three days. Payments are backdated to reflect the date the agency
received the payment.
How can I determine if a credit balance on an account should be applied
to collection
costs?
First, look to see if the loan was ever placed with a collection
agency. Then, review the payments to verify that collection costs
were assessed for each payment that the borrower made while the
loan was placed with an agency. If there are fees missing from
a payment, you may need to contact the agency to verify that they
assessed the fee. Our Customer Service team can easily adjust
the loan if fees have been missed that should have been accessed.
How are
collection agencies paid?
Collection agencies will either bill the school for their services
(called the "gross check method") or the agency will
net the fees directly from the borrower payments (called the "net
check method"). Schools select a preferred
method when contracting with a new agency.
The net check method refers to payments that are received from a collection agency minus agency fees. When net checks are received, an Institutional Paid Collection Cost (IPCC) also will be keyed.
For example, if an agency collects $100 from a borrower, and agency fees (IPCC) on the loan are $25, the school will receive $75. When we receive the invoice, we key in $100 on line so the borrower will receive full credit for his payment and $25 is keyed as the IPCC. The school should also be set up so that as payments are applied, a Borrower Paid Collection Cost should be assessed to offset the agency charges.
Who
notifies the collection agencies when a loan has been returned
to regular billing?
If a loan has been returned to billing, it will be reflected on
the Transactions Against Loans in Collections Report. The
borrower’s name will be listed on the report, and under
the heading “Activity,” the report will indicate "REMOVED."
The agency should be able to pull this report weekly from eXpressReports since a hard copy of this report is not sent to the agency.
If an agency closes and returns a loan, it is critical that the
school notifies our company. This will allow the loan to be returned
to regular billing. Collection agencies must inform the school
when a loan has been closed and returned. They do not notify our
company.
What does "oldest outstanding bill" mean?
The “Oldest Outstanding” bill is the oldest bill that remains due and not paid by the borrower. The date of this bill can be found in the second column of the MAIN screen. This information also appears on the HOSB screen.