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1. General Inquiries
2. FAFSA/Applying for Federal Aid
3. Repayment Plans and Loan Forgiveness
4. Default
5. Total and Permanent Disability Discharge
6. Loan Servicers

1. **Why do Congressional offices have to include a privacy release form in their casework requests?**
The  Office of Legislation and Congressional Affairs (OLCA) must have the permission  of the borrower to look into their case and discuss the information with  Congressional offices.  Because of this  OLCA requires all Congressional offices to submit a signed privacy release with  the borrower’s name, date of birth and social security number.  We need the social security number, since all  records are located in our system by social security number.  OLCA takes privacy information seriously and  have put all the proper processes in place to protect this information. OLCA  asks that all Congressional offices protect the privacy information of  borrowers as well.  If you choose to  submit an inquiry by email, we encourage Congressional offices to password  protect any documents that contain privacy information.  Passwords should be sent in a separate  email.
2. **How does a borrower find out how many loans they have and who services them?**
A  borrower can keep track of all U.S. Department of Education (Department)  federal student loans through the National Student Loan Data System (NSLDS ®) a www.nslds.ed.gov.  NSLDS is the central database for Federal Student  Aid.  Please note a borrower is required  to have a PIN to access their information.
3. **What are the differences between FFEL loans vs. Direct loans?**
Under  the Federal Family Education Loan (FFEL) program, private lenders provided  loans to students that were guaranteed by the federal government. These loans  included Federal Subsidized Stafford Loans, Federal Unsubsidized Stafford  Loans, Federal PLUS Loans, and Federal Consolidation Loans.  Under the Direct Loan Program, the Department  of Education is the lender and makes loans directly to students.  Pursuant to the Health Care and Education  Reconciliation Act (HCERA) of 2010, all new federal student loans are made  through the Department’s Direct Loan Program.
4. **Where can I find information about how much financial aid students at a specific college or in a specific congressional district are receiving?**
The  office of Federal Student Aid delivers aid to students through loan, grant*,*and work-study programs. These reports provide recipient and  volume data by program for each school participating in the Title IV programs.  The reports can be found on our website at: http://studentaid.ed.gov/about/data-center/student/title-iv or http://nces.ed.gov/collegenavigator/.
5. **What happens if someone steals a borrower’s identity and gets a student loan in their name?**
A Stafford Loan or PLUS loan may be discharged (canceled)  if a court determines that the loan was made as a result of a crime of identity  theft.
6. **Does the Department accredit  institutions of higher education?**
The **Department**does  not accredit educational institutions and/or programs. However, the Secretary  of Education is required by law to publish a list of nationally recognized  accrediting agencies that the Secretary determines to be reliable authorities  as to the quality of education or training provided by the institutions of  higher education and the higher education programs they accredit.  See our  website for that list: http://www2.ed.gov/admins/finaid/accred/index.html.  The Secretary also recognizes state agencies for the approval of public  postsecondary vocational education and state agencies for the approval of nurse  education. These agencies must meet the Secretary's criteria and procedures for  such recognition and must undergo review by the National Advisory Committee on  Institutional Quality and Integrity (NACIQI).  The Department does not  accredit institutions in foreign countries. However, the Secretary of Education  does appoint members to the National Committee on Foreign Medical Education and  Accreditation, which has the responsibility for reviewing the standards that  foreign countries use to accredit medical schools to determine whether those  standards are comparable to the standards used to accredit medical schools in  the United States. The comparability decisions made by the Committee affect  whether U.S. students attending foreign medical schools can receive federal  student loans.

1. **Can you get financial aid for a second  Bachelor’s degree?**
Yes,  as long as the borrower does not exceed the allowed loan limits, he or she is able  to borrow federal aid for another degree. Please note, as a result of changes made in the Consolidated  Appropriations Act, he or she would not be eligible for additional Pell  grants.  The following chart provides maximum annual and total loan limits for  subsidized and unsubsidized loans as of July 1, 2012.
**Year**
 **Dependent Students (except students whose parents are unable to obtain PLUS Loans)**
 **Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)**First-Year Undergraduate
 $5,500—No more than $3,500 of this amount may be in subsidized loans.
 $9,500—No more than $3,500 of this amount may be in subsidized loans.Second-Year Undergraduate
 $6,500—No more than $4,500 of this amount may be in subsidized loans.
 $10,500—No more than $4,500 of this amount may be in subsidized loans.Third-Year and Beyond  Undergraduate
 $7,500 per year—No more than $5,500 of this amount may be in subsidized loans.
 $12,500 per year—No more than $5,500 of this amount may be in subsidized loans.Graduate or Professional Degree Students
 Not Applicable
 $20,500Maximum Total Debt from Subsidized and Unsubsidized Loans
 $31,000—No more than $23,000 of this amount may be in subsidized loans.
 $57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.
   $138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes all federal loans received for undergraduate study.Note: The maximum total loan  limits include any Subsidized Federal Stafford Loans or Unsubsidized Federal Stafford Loans you may have received under the *Federal Family Education Loan  (FFEL) Program*. As a result of legislation, no further loans are made under  the *FFEL Program* as of July 1, 2010.
2. **Is there a waiver to become eligible for federal student aid or other federal benefits if a student did not register with the Selective Service by age 26?**
There  are some specific cases, such as living outside the country or illness for the  entire registration period that may qualify an individual for a waiver.  Information can be found at www.sss.gov.
3. **If an individual is  18 years old, why does he/she need their parents’ financial information on the  FAFSA?**
A student’s dependency status  determines whose information must be reported on the *Free  Application for Federal Student Aid* (FAFSA). If the applicant is  a dependent student, he must report his  information, as well as his parents.  If  the applicant is an independent student, he will only have to report his information,  which would include his spouse’s if they are married.
Here are the 2013–14 questions that determine  your dependency status:
Were you born before Jan. 1, 1990?
 Yes
 NoAs of today, are you married? (Answer “Yes” if you are separated but not divorced.)
 Yes
 NoAt the beginning of the 2013–14 school year, will you be working on a master’s or doctorate program (such as an M.A., M.B.A., M.D., J.D., Ph.D., Ed.D., graduate certificate, etc.)?
 Yes
 NoAre you currently serving on active duty in the U.S. armed forces for purposes other than training? (If you are a National Guard or Reserves enlistee, are you on active duty for other than state or training purposes?)
 Yes
 NoAre you a veteran of the U.S. armed forces?*
 Yes
 NoDo you have children who will receive more than half of their support from you between July 1, 2013, and June 30, 2014?
 Yes
 NoDo you have dependents (other than your children or spouse) who live with you and who receive more than half of their support from you, now and through June 30, 2014?
 Yes
 NoAt any time since you turned age 13, were both your parents deceased, were you in *foster care*, or were you a dependent or ward of the court?
 Yes
 NoHas it been determined by a court in your state of legal residence that you are an *emancipated minor* or that you are in a *legal guardianship*?
 Yes
 NoAt any time on or after July 1, 2012, were you determined to be an unaccompanied youth who was *homeless*, as determined by (a) your high school or district homeless liaison or (b) the director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development?**
 Yes
 NoAt any time on or after July 1, 2012, did the director of a runaway or homeless youth basic center or transitional living program determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless?**
 Yes
 No* Answer No (you are not a veteran) if you (1) have never  engaged in active duty in the U.S. armed forces, (2) are currently a Reserve  Officers’ Training Corps (ROTC) student or a cadet or midshipman at a service  academy, (3) are a National Guard or Reserves enlistee activated only for state  or training purposes, or (4) were engaged in active duty in the U.S. armed  forces but released under dishonorable conditions. Also answer No if you are  currently serving in the U.S. armed forces and will continue to serve through  June 30, 2013. Answer Yes (you are a veteran) if you (1) have engaged in active  duty in the U.S. armed forces (Army, Navy, Air Force, Marines, or Coast Guard)  or are a National Guard or Reserves enlistee who was called to active duty for  other than state or training purposes, or were a cadet or midshipman at one of  the service academies and (2) were released under a condition other than  dishonorable. Also answer Yes if you are not a veteran now but will be one by  June 30, 2013.**If you do not have a determination that you are  homeless, but you believe you are an unaccompanied youth who is homeless or  self-supporting and at risk of being homeless, answer “No” to the FAFSA  questions concerning being homeless. Then contact your financial aid office to explain your situation.
If the applicant answered Yes to one or more of the questions above, he  is considered to be an independent student for federal student aid purposes and  will not need to provide information about his parents on the FAFSA. If the  applicant answered no to every question, he is considered to be a dependent  student for federal student aid purposes and must provide information about his  parents’ financial aid on the FAFSA. For more  information, please visit http://studentaid.ed.gov/fafsa/filling-out/dependency.
4. **How much Pell grant money can an  individual receive?**
An  undergraduate student can receive up to $5,550 for the 2012-13 award year if he/she  meets the eligibility requirements, exhibits financial need, and has not  yet earned a bachelor’s or graduate degree.  Effective July 1, 2012, a student can receive  the Federal Pell Grant for no more than 12 semesters. (http://www.studentaid.ed.gov/types/grants-scholarships/pell/calculate-eligibility)
5. **What if an individual needs help filling out his FAFSA?**
Help is available and accessible for every question on the  FAFSA if a borrower applies online with *FAFSA on the Web at* www.fafsa.gov, by clicking on the “Help” button.   Questions can also be directed to the  Federal Student Aid Information Center 1-800-4FED-AID (1-800-433-3243).  In addition, high school guidance counselors and college financial aid  offices may be of help.
6. **Who can apply for a PLUS loan?**
Parents of dependent students and students pursuing a  graduate or professional degree can apply for PLUS Loans.
7. **What if an individual’s grades slipped, or they did not complete enough credits, and the financial aid office said they cannot get any more federal student aid?**
The law requires a federal student aid recipient to make  satisfactory academic progress in college or career school in order to retain  eligibility for federal student aid.  A  student can talk to their school about whether they can appeal the decision  that made them ineligible, so they can continue receiving federal student aid.
8. **What are the FAFSA eligibility requirements for deferred action for childhood arrivals (DACA)?**
DACA  recipients do not fit into any of the Department’s  categories for eligible noncitizens, and are ineligible to receive federal  financial aid. They are also ineligible for most state financial aid programs. Some  colleges may offer institution-specific scholarships for which DACA recipients  may qualify. Colleges may require students to fill out the FAFSA solely for the  purpose of determining private aid eligibility. The student must have a Social  Security number to complete the FAFSA online. The FAFSA will result in a  Student Aid Report bearing the Expected Family Contribution (EFC) that the  school needs to determine financial need. However, the DACA recipient will not  be eligible for federal student aid and will receive a “C” code on the Student  Aid Report requesting documentation of citizenship.
9. **If a constituent does not have a GED or High School diploma, are they still eligible for financial aid based on the “ability-to-benefit” (ATB) test?**
Pursuant to changes in the Consolidated Appropriations Act  of 2012, effective with the 2012-2013 award year, new students who do not have  a high school diploma, or an equivalent such as a GED, and who did not complete  secondary school in a homeschool setting are not eligible for Title IV funds.  Such students can no longer become eligible by passing an approved ATB test.   However, students who were enrolled in  an eligible educational program of study before July 1, 2012, may continue to  be considered Title IV eligible under the ATB test.

1. **A student’s TEACH grant has turned into a loan.  Why and what can they do now?**  
The law requires a  TEACH Grant to be converted into a Direct Unsubsidized Loan under any of the  following conditions:
The student request that their TEACH Grant be converted to a loan  for any reason.
  The student fails to complete the program for which they received  a TEACH Grant, and within 120 days of ceasing enrollment they failed to notify  the Direct Loan Servicing Center that: 
  They are employed as a  full-time teacher in accordance with the requirements described in their TEACH  Grant Agreement To Serve (ATS); or
 They are not yet employed as a  full-time teacher in accordance with the requirements described in the ATS, but  intend to meet the terms and conditions of the TEACH Grant service obligation.
  The student did not complete the program for which they received a  TEACH Grant, and within one year after they cease enrollment: 
  They have not been determined  to be eligible for suspension of the 8-year period for completing their service  obligation;
 They have not reenrolled in a  program for which they would be eligible to receive a TEACH Grant; or
 They have not begun qualifying teaching  service as described previously.
  The student completed the academic program for which they received  a TEACH Grant, but did not confirm to the Direct Loan Servicing Center at least  once each year that they intend to satisfy their service obligation.
  The student has completed the academic program for which they  received a TEACH Grant, but did not begin or maintain qualifying employment as  a teacher that would allow them to complete their required four years of  employment within the maximum 8-year period.In addition to the conditions  previously listed, any other condition that prevents the student from  completing their TEACH Grant service obligation could cause a TEACH Grant to be  converted to a loan.
If a student’s TEACH Grant is  converted to a Direct Unsubsidized Loan, they will be required to repay the  full amount of all TEACH Grant funds received, with interest charged from the  date of each TEACH Grant disbursement. The student will receive notification  from the Direct Loan Servicing Center stating when the date of the first  payment is due and provide a repayment schedule for the borrower.
If the student does not meet  the requirements of the TEACH Grant Program and their TEACH Grant is converted  to a Direct Unsubsidized Loan, we may forgive a portion of that loan if the  borrower:
Teaches full time for five consecutive years in certain low-income  elementary and/or secondary schools and meet certain other qualifications, and
  If they did not owe a Direct Loan or FFEL program loan as of  October 1, 1998, or as of the date you obtain a loan after October 1, 1998.All or a portion of a TEACH  Grant that was converted to a Direct Unsubsidized Loan may also be discharged  under certain other conditions, as explained in the student’s ATS.  For additional information on loan  forgiveness, discharges, and repayment options, please visit https://teach-ats.ed.gov/ats/images/gen/exitCounseling.pdf.
2. The student request that their TEACH Grant be converted to a loan  for any reason.
3. The student fails to complete the program for which they received  a TEACH Grant, and within 120 days of ceasing enrollment they failed to notify  the Direct Loan Servicing Center that: 
  They are employed as a  full-time teacher in accordance with the requirements described in their TEACH  Grant Agreement To Serve (ATS); or
 They are not yet employed as a  full-time teacher in accordance with the requirements described in the ATS, but  intend to meet the terms and conditions of the TEACH Grant service obligation.
4. They are employed as a  full-time teacher in accordance with the requirements described in their TEACH  Grant Agreement To Serve (ATS); or
5. They are not yet employed as a  full-time teacher in accordance with the requirements described in the ATS, but  intend to meet the terms and conditions of the TEACH Grant service obligation.
6. The student did not complete the program for which they received a  TEACH Grant, and within one year after they cease enrollment: 
  They have not been determined  to be eligible for suspension of the 8-year period for completing their service  obligation;
 They have not reenrolled in a  program for which they would be eligible to receive a TEACH Grant; or
 They have not begun qualifying teaching  service as described previously.
7. They have not been determined  to be eligible for suspension of the 8-year period for completing their service  obligation;
8. They have not reenrolled in a  program for which they would be eligible to receive a TEACH Grant; or
9. They have not begun qualifying teaching  service as described previously.
10. The student completed the academic program for which they received  a TEACH Grant, but did not confirm to the Direct Loan Servicing Center at least  once each year that they intend to satisfy their service obligation.
11. The student has completed the academic program for which they  received a TEACH Grant, but did not begin or maintain qualifying employment as  a teacher that would allow them to complete their required four years of  employment within the maximum 8-year period.
12. Teaches full time for five consecutive years in certain low-income  elementary and/or secondary schools and meet certain other qualifications, and
13. If they did not owe a Direct Loan or FFEL program loan as of  October 1, 1998, or as of the date you obtain a loan after October 1, 1998.
14. **How do borrowers consolidate school loans and which school loans are eligible for consolidation?**  
Most Federal loans are  available for consolidation.  Private loans  are not eligible for consolidation. For a complete list of all federal student  loans eligible for consolidation, contact the Direct  LoanConsolidation  Center by calling 1-800-557-7392 or go to www.loanconsolidation.ed.gov. If a borrower is in *default*,  he/she must meet certain requirements before they can consolidate their loans.  A PLUS loan made to the parent  of a dependent student cannot  be transferred to the student through consolidation. Therefore, a student who  is applying for loan consolidation cannot include the PLUS loan the parent took  out for the dependent student’s education.   Here are several ways to apply for loan consolidation:
Online  application: Apply online at the Direct Consolidation Loan website (https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp).
  Express phone application: Apply via phone at  1-800-557-7392 if you have all Direct Loans.
  Paper application: Download a paper copy of the  application and *promissory note* at the Direct Consolidation  Loan website or request an application package be mailed to you by calling  1-800-557-7392 (TDD 1-800-557-7395) or 334-206-7400 (outside the USA) or  sending an e-mail at the website address above.
15. Online  application: Apply online at the Direct Consolidation Loan website (https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp).
16. Express phone application: Apply via phone at  1-800-557-7392 if you have all Direct Loans.
17. Paper application: Download a paper copy of the  application and *promissory note* at the Direct Consolidation  Loan website or request an application package be mailed to you by calling  1-800-557-7392 (TDD 1-800-557-7395) or 334-206-7400 (outside the USA) or  sending an e-mail at the website address above.
18. **How are loans automatically forgiven?**  
Loans are not automatically  forgiven.  When an individual borrows  money from the federal government, he/she sign a Master Promissory Note  (MPN).  The MPN states that the  individual is required to repay the loan even if they do not complete their  education, unless they meet certain requirements for discharge or  forgiveness.  Discharge or forgiveness of  loans is not an automatic process.  The  borrower must fill out an application and submit to their servicer the relevant  information required by the specific program.   The below list is a quick view of the programs offered by the Department  in regards to loan forgiveness, cancellations, and discharges available for  borrowers.
**Type of Forgiveness, Cancellation, or Discharge******
 **Direct Loans******
 **Federal Family Education Loan (FFEL) Program****Loans******
 **Perkins Loans******Total and Permanent Disability Discharge
 X
 X
 XDeath Discharge
 X
 X
 XDischarge in Bankruptcy (in rare cases)
 X
 X
 XClosed School Discharge
 X
 XFalse Certification of Student Eligibility or Unauthorized Payment Discharge
 X
 XUnpaid Refund Discharge
 X
 XTeacher Loan Forgiveness
 X
 XPublic Service Loan Forgiveness
 XPerkins Loan Cancellation and Discharge (includes Teacher Cancellation)
 
 
 X
19. **The borrower believes their degree is worthless since it did not prepare them for the career that the school said it would. They do not believe they should have to repay their loan. How can they get it canceled?**  
The  MPN states that the individual is required to repay the loan even if the  individual is unable to get a job or they do not like the education they  received.  That said, if the borrower  feels that they were defrauded or subject to dishonest practices, they can  report the school to the Consumer Financial Protection Bureau (http://www.consumerfinance.gov/complaint/)  and file a complaint with ED’s Inspector General http://www2.ed.gov/about/offices/list/oig/hotline.html).
20. **A borrower was told they are ineligible for the Income Based Repayment plan (IBR) or the Public Service Loan Forgiveness program (PSLF) because they are on an ineligible repayment plan. What does that mean?**
In  2007, Congress created the PSLF Program to encourage individuals to enter and  continue to work full time in public service jobs. Under this program,  borrowers may qualify for forgiveness of the remaining balance due on their  eligible federal student loans after they have made 120 payments on those loans  under certain repayment plans while employed full time by certain public  service employers.  Please note that the earliest anyone would be eligible  for forgiveness under the PSLF plan is October 2017, for borrowers who became  eligible at the onset of the program in October 2007. The 120 required payments  must be made under one or more of the following Direct Loan Program repayment  plans:
Income Based Repayment (IBR) Plan (not available  to parent Direct PLUS Loan borrowers)
  Income Contingent Repayment (ICR) Plan (not  available to parent Direct PLUS Loan borrowers)
  Pay As You Earn (PAYE) plan (not available to  Direct Parent PLUS Loan borrowers)
  Standard Repayment Plan with a 10-year repayment  period; and
  Any other Direct Loan Program repayment plan;  but only payments that are at least equal to the monthly payment amount that  would have been required under the Standard Repayment Plan with a 10-year  repayment period may be counted toward the required 120 payments.Non-qualifying  repayment plans include: Extended (Fixed or Graduated), Graduated and  Consolidation Standard with term greater than 10-years.   PSLF is  available for Direct Loans only.  FFEL Program and Perkins Loans do not  qualify, but can be consolidated into a Direct Consolidation Loan.   Payments made on the other loans that are later consolidated do not count  toward 120 payments for PSLF.  The PSLF Program provides for forgiveness  of the remaining balance of a borrower’s eligible loans after the borrower has  made 120 qualifying payments on those loans. In general, only borrowers who are  making reduced monthly payments through income-driven plans are most likely to  leave a remaining balance for forgiveness after 120 qualifying payments. Our  website provides more detailed information on the PSLF plan: http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service.
21. Income Based Repayment (IBR) Plan (not available  to parent Direct PLUS Loan borrowers)
22. Income Contingent Repayment (ICR) Plan (not  available to parent Direct PLUS Loan borrowers)
23. Pay As You Earn (PAYE) plan (not available to  Direct Parent PLUS Loan borrowers)
24. Standard Repayment Plan with a 10-year repayment  period; and
25. Any other Direct Loan Program repayment plan;  but only payments that are at least equal to the monthly payment amount that  would have been required under the Standard Repayment Plan with a 10-year  repayment period may be counted toward the required 120 payments.
26. **The borrower wants to change the interest  rate for the federal student loan.  Is  this possible?**
No.  Interest rates are set by statute. For  more information on how interest is calculated, borrowers should review the  exit counseling guide that provides a detailed explanation of the process: http://www2.ed.gov/offices/OSFAP/DirectLoan/pubs/exitcounselguide.pdf.   If a borrower has not yet consolidated, one of the facets of consolidation is a  fixed interest rate for the life of the loan.  Our website has a wealth of  information on consolidation (http://studentaid.ed.gov/repay-loans/consolidation),  including the pros and cons as well as requirements for this program.
27. **A borrower applied for the Teacher Loan Forgiveness (TLF) Program, but was deemed ineligible because of the 1998 requirement.  Is there a waiver for this requirement?**
No.  When Congress authorized the TLF program they  set the requirement that an individual must not have had an outstanding balance  on Direct Loans or Federal  Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or  on the date that he/she obtained a Direct  Loan or FFEL  Program loan after Oct. 1, 1998.
28. **I participate in the U.S. House of Representatives student loan repayment plan.  How can I obtain a  1098-E form for tax purposes?**
Your  student loan servicer (the entity you make payments to) will provide you a copy  of the Internal Revenue Service Student Loan Interest Statement, form 1098-E.   Your servicer may send you your 1098-E via U.S. Postal Service or  electronically.  Check with your servicer if you have not yet received  your 1098-E for the previous year.  If you had multiple loan servicers in  2011, you will receive a separate 1098-E from each servicer. If you are not  sure who your loan servicer is, you can look it up on www.nslds.ed.gov or  call the Federal Student Aid Information Center at 1-800-4-FED-AID  (1-800-433-3243; TTY 1-800-730-8913). To see a list of Federal Student Aid  servicers for the Direct Loan Program and for FFEL Program Loans purchased by  the U.S. Department of Education, go to our Loan Servicer page. http://www.ed.gov/blog/2012/02/dont-forget-your-1098-e-tax-form-when-filing-your-taxes/
29. **What are the tuition refund policies for a student who drops their classes?**
Tuition refund policies for  students who drop courses are not set by the Department of Education and vary  by institution.  A full refund is usually  predicated upon the drop/add date established by the institution. Therefore, it  is imperative that students are aware of these critical dates.  The institution is not required to fully  refund tuition if a class is dropped beyond the drop/add date.
30. **Can a Parent PLUS Loan be transferred to the student and become the student’s responsibility to repay?**
No. A  PLUS loan made to the parent cannot be transferred to the student. The parent  is responsible for repaying the PLUS loan
31. **Is there a grace period with a PLUS loan?**
Repayment  of a Direct PLUS loan begins when the loan is fully disbursed.  The first payment is due 60 days after the  final disbursement. However, a borrower may request to defer payment while the  student is enrolled at least half-time (for Direct PLUS loans first disbursed  on or after July 1, 2008) and for an additional six months.
32. **The borrower wants to go on an income repayment plan but their payment would go up. Why?**
The Department offers several repayment  plans for which the monthly payment is calculated based on the borrower’s  income relative to poverty. A repayment plan that is calculated based on income  may raise their monthly payment if they earn more than a certain amount  (combined with the other factors described below). Please note that the  following information is only related to the calculation of the payment and  additional conditions and eligibility criteria apply. More detailed information  about repayment options can be found on our website at http://studentaid.ed.gov/repay-loans/understand/plans.
Income-Based Repayment (IBR) Plan: 
  The maximum monthly payments will be 15 percent  of discretionary income, the difference between the borrower’s adjusted gross  income and 150 percent of the poverty guideline for their family size and state  of residence (other conditions apply).
 Payments can change as the borrower’s income  changes.
  Pay As You Earn Repayment Plan:
  The maximum monthly payments will be 10 percent  of discretionary income, the difference between the borrower’s adjusted gross  income and 150 percent of the poverty guideline for their family size and state  of residence (other conditions apply).
 Payments can change as the borrower’s income changes.
  Income-Contingent Repayment (ICR) Plan:
  Payments are calculated each year and are based  on
 the borrower’s adjusted gross income, family  size, and the total amount of their Direct Loans; and
   the lesser of 
   the amount they would pay if they repaid their  loan in 12 years multiplied by an income percentage factor that changes with their  annual income; or
  20 percent of their monthly discretionary  income.
 Payments can change as the borrower’s income  changes.
33. Income-Based Repayment (IBR) Plan: 
  The maximum monthly payments will be 15 percent  of discretionary income, the difference between the borrower’s adjusted gross  income and 150 percent of the poverty guideline for their family size and state  of residence (other conditions apply).
 Payments can change as the borrower’s income  changes.
34. The maximum monthly payments will be 15 percent  of discretionary income, the difference between the borrower’s adjusted gross  income and 150 percent of the poverty guideline for their family size and state  of residence (other conditions apply).
35. Payments can change as the borrower’s income  changes.
36. Pay As You Earn Repayment Plan:
  The maximum monthly payments will be 10 percent  of discretionary income, the difference between the borrower’s adjusted gross  income and 150 percent of the poverty guideline for their family size and state  of residence (other conditions apply).
 Payments can change as the borrower’s income changes.
37. The maximum monthly payments will be 10 percent  of discretionary income, the difference between the borrower’s adjusted gross  income and 150 percent of the poverty guideline for their family size and state  of residence (other conditions apply).
38. Payments can change as the borrower’s income changes.
39. Income-Contingent Repayment (ICR) Plan:
  Payments are calculated each year and are based  on
 the borrower’s adjusted gross income, family  size, and the total amount of their Direct Loans; and
   the lesser of 
   the amount they would pay if they repaid their  loan in 12 years multiplied by an income percentage factor that changes with their  annual income; or
  20 percent of their monthly discretionary  income.
 Payments can change as the borrower’s income  changes.
40. Payments are calculated each year and are based  on
 the borrower’s adjusted gross income, family  size, and the total amount of their Direct Loans; and
   the lesser of 
   the amount they would pay if they repaid their  loan in 12 years multiplied by an income percentage factor that changes with their  annual income; or
  20 percent of their monthly discretionary  income.
41. the borrower’s adjusted gross income, family  size, and the total amount of their Direct Loans; and
42. the lesser of 
   the amount they would pay if they repaid their  loan in 12 years multiplied by an income percentage factor that changes with their  annual income; or
  20 percent of their monthly discretionary  income.
43. the amount they would pay if they repaid their  loan in 12 years multiplied by an income percentage factor that changes with their  annual income; or
44. 20 percent of their monthly discretionary  income.
45. Payments can change as the borrower’s income  changes.
46. **The borrower’s loan principal is higher than the amount that they originally borrowed. They have faithfully made payments. How is this possible?**
The reason for this is capitalization  of interest. Capitalization is the addition of unpaid interest to the principal  balance of a loan.  When the interest is not paid as it accrues during  periods of in-school status, the grace period, deferment, or forbearance, a lender  may capitalize the interest. This increases the outstanding principal amount  due on the loan and may cause the borrower’s monthly payment amount to  increase. Interest is then charged on that higher principal balance, increasing  the overall cost of the loan.   Capitalization can also occur when an individual consolidates their loans.  If the borrower chooses not to pay off the interest of the loans that they are  consolidating, that interest will be capitalized into the principal of the new  consolidation loan. Additionally, under some repayment plans, the monthly  payment will not cover all the interest and that interest can be capitalized. The  borrower should be sure to carefully review the advantages and disadvantages of  consolidation and repayment plans before making a decision on which plan is  best for them.

1. **The borrower’s loans are in default.  How can they rehabilitate them?**  
There  are several options for a borrower to get out of default (https://studentaid.ed.gov/repay-loans/default/get-out),  the most common being loan rehabilitation. To rehabilitate a Direct Loan or  FFEL Program loan, the borrower and ED must agree on a reasonable and  affordable payment plan. The rehabilitation process involves satisfying the  agreed upon monthly payments on time for 9 months.  Outstanding collection costs may be added to  the principal balance, increasing the total the borrower owes.  Delinquencies (late payments) reported before  the loan defaulted will not be removed from the borrower’s credit report.  Direct Loans and FFEL loans owned by the  Department that are in default are assigned to the Department’s Default  Resolution Group for collection.  For information on these loans, the  borrower should go to: https://www.myeddebt.com/borrower/.   Defaulted FFEL loans that are not held by the Department will be assigned to a  guaranty agency for collection.  Remember;  contact the school for a Perkins Loan.
2. **How often is NSLDS updated for defaulted  loans that are no longer in default?**
For a specific servicer or Guaranty Agency’s (GA)  loan reporting schedule, search for that servicer/GA using the Data Provider  Schedule link on the Org tab. Guaranty Agencies which administer Federal  Family Education Loan (FFEL) Program loans, report loan information at  least monthly, many, more frequently. Schools or their servicers report Perkins  loan information monthly. Schools or their servicers report overpayments within  30 days of discovery of the overpayment. The Department’s Debt Collection and  Direct Loan servicers report information weekly. COD reports information daily  on Pell,. Schools and guaranty agencies also report enrollment at least  monthly. https://www.nsldstraining.ed.gov/nslds_FAP/static/faq.jsp#3
3. **A borrower is unable to get another student loan because they defaulted on their current loan. How can they become eligible for another loan?**
The consequences of default can be  severe, including loss of eligibility for additional federal student aid,  deferment, forbearance, and repayment plans. Options for getting out of default  include loan repayment, loan rehabilitation, and loan consolidation. Summary  information about each of these options follows, and more detailed information  can be found on our website at http://studentaid.ed.gov/repay-loans/default/get-out.
*Loan  Repayment:*repaying your  defaulted student loan in full.
  *Loan Rehabilitation:*To rehabilitate your  Direct Loan or FFEL Program loan, you and ED must agree on a reasonable and  affordable payment plan.
  *Loan Consolidation:*allows you to pay off  the outstanding combined balance(s) for one or more federal student loans to  create a new single loan with a fixed interest rate.If an individual is having trouble  making payments on a FFEL or Direct loan, they should immediately contact  their loan servicer. If the borrower is unsure which type(s) of loan(s) they have,  they can check their original loan documents or use NSLDS at http://www.nslds.ed.gov/nslds_SA/.
4. *Loan  Repayment:*repaying your  defaulted student loan in full.
5. *Loan Rehabilitation:*To rehabilitate your  Direct Loan or FFEL Program loan, you and ED must agree on a reasonable and  affordable payment plan.
6. *Loan Consolidation:*allows you to pay off  the outstanding combined balance(s) for one or more federal student loans to  create a new single loan with a fixed interest rate.
7. What  are the garnishment regulations and what funds can be garnished? 
Administrative  offset is authorized by the Debt Collection Act of 1982 and the Debt Collection  Improvement Act of 1996.  Any account with the U.S. Department of  Education (ED) that has a balance and has not been in repayment for over 360  days, is referred to ED’s Defaulted Loan System (Debt Management Collection  System) for servicing.  Those debts are eligible for referral to the  U.S. Department of the Treasury’s Financial Management Service (FMS) for  offset as well as assigned to Private Collection Agencies (contractors for ED)  for collection.  Treasury may offset payments from an authorized (now or  in the future) payment stream of individuals who are indebted to the federal  government.  The payment streams include federal and state income tax  refunds, Office of Personal and Management (OPM) disability or retirement  payments, vendor payments, stipends, reimbursement checks for Federal Travel,  and Social Security Benefits (retirement, disability and survivor  benefits).  At this time, Supplemental Security Income (SSI) payments are  not being offset.
8. **If a borrower’s spouse defaults on their student loan, and they co-hold their mortgage, can the bank put a lien on the couple’s home?**
The  Department cannot put a lien on a borrower’s home but the loan holder’s salary  and benefits could be garnished.

1. **What is the process for the Total and  Permanent Disability Discharge (TPD)?**
A  borrower may be eligible for TPD if he/she is unable to engage in any  substantial gainful activity because of a medically determinable physical or  mental impairment that can  be expected to result in death, has lasted for a continuous period of not less  than 60 months, or can be expected to last for a continuous period of not less  than 60 months. Veterans may be eligible for TPD Discharge once  he/she has received a determination from the Department of Veteran Affairs (VA)  that they have a  service-connected disability or service-connected disabilities that are 100  percent disabling or are totally disabled based on an Individual  Unemployability determination. There are several requirements that  must be met for a TPD discharge, all of which are available on www.disabilitydischarge.com.   For more information on the TPD program, including the application and how to  apply, borrowers should visit our website at: http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/disability-discharge.  Once a TPD discharge application has been submitted, it can generally take up to  90 days to process the application and make a determination.  Should a borrower be deemed eligible for TPD,  they would go through a 3 year monitoring period in which they have to submit  income information annually.  During this  monitoring period, a borrower’s loans will be put on hold and interest will not  accrue.
2. **A borrower was approved for TPD.  One of their federal loans was discharged but not the other. What happened?** 
  The current process requires a constituent to submit the TPD application to all servicers, if they have more than one servicer.  The Department just finalized regulations, which will take effect July 1, 2013 [http://www.ifap.ed.gov/fregisters/attachments/FR110112FinalRule.pdf] that will streamline the process and all TPD applications will be submitted to one servicer, regardless if a borrower has more than one servicer.
3. **After the monitoring period for a borrower’s TPD discharge ends, when can they expect their loan to be permanently discharged?**
The  servicer sends income verification forms out each October. After they have  received the borrower’s form for the remainder of the monitoring period, the  borrower can expect their loans to be permanently discharged in about 60 days.  If the borrower’s monitoring period ends before October and would like to  expedite the process, they can call their servicer and have the form sent  early.

1. **What is a loan servicer?**
Loan servicers are companies that handle the billing and other services for  Department of Education-held federal student loans. The loan servicer works  with borrowers on repayment plans, loan consolidation, and will assist with other tasks  related to the federal student loan. It is important for a borrower to maintain  contact with their loan servicer, especially if circumstances change at any  time during their repayment period. For more information, please visit http://studentaid.ed.gov/repay-loans/understand/servicers.
2. **Why are loans “sold” to MOHELA, or other companies?**
Loans  are never “sold” but can be transferred among the Department’s servicers.  The Department has several loan servicers who  handle the billing and other services on all Federal student loans*.*   A loan servicer is assigned to each borrower after their entire loan is  disbursed.  A list of the Department’s  loan servicers is available on our website: http://studentaid.ed.gov/repay-loans/understand/servicers.  
  In  2009, the Department announced that we expanded our Federal loan servicing  team.  Specifically, we stated:
“*As our  federally-owned loan portfolio continues to grow, we are ready to move to the  next step in ensuring an efficient and effective multi-servicer,  borrower-centric approach to servicing. We will further expand our federal loan  servicer team through contracts awarded under the HCERA/SAFRA Not-For-Profit  (NFP) Servicer Program solicitation. This solicitation offered NFP entities the  opportunity to submit proposals individually or in teams for servicing borrower  accounts on our behalf.  Whether individual or team award, our customers  will know and face one servicer. The Department will annually measure each  servicer’s performance in the areas of borrower satisfaction and default management  and use the results to assign additional volume when applicable.”*
The Department approved MOHELA as a loan servicer, and they  were the first NFP servicers to service federally held student loans.   This means that the Department is able to transfer loans to between servicers,  such as MOHELA, if it is necessary.

|Last Modified: 05/28/2013
|-------------------------