Eastern Wyoming College

Borrower’s Rights & Responsibilities

Student Loan Debt

It’s not uncommon for college students to take out loans to help pay for school. In fact, almost 66% of students nationwide depend at least partially on loans. EWC’s costs are reasonable, however, with only around a quarter of students taking out loans, averaging $6,500 in typical total loan debt after graduation. The annual student loan default rate typically varies between 10 and 15% and is at or below national averages for two-year public schools, which is a good sign that you’ll be able to pay back your student loans. EWC’s last three three-year official Cohort Default Rates are as follows:

FY17: 15.2%
FY16: 15.0%
FY15:   9.7%

The CDR is calculated by the U.S. Department of Education. A cohort default rate is the percentage of a school’s borrowers who enter repayment on certain Federal student loans – specifically Family Education Loan (FFEL) Program or  Federal Direct Loan Program loans – during a particular federal fiscal year, October 1 to September 30, and default—or stop making required payments—prior to the end of the second following fiscal year.

More information and a searchable database of schools’ CDRs may be found at the Federal Student Aid website.

Before you borrow, please review the following questions and answers. The information provided can help answer most of your questions and give you resources to assist you while in school, during a leave of absence/withdrawal and after completion of your program.

How much should I borrow?

EWC strongly encourages borrowers to carefully weigh the need for loans and to borrow only what is actually needed. Estimate and plan your repayment obligations prior to borrowing. Borrowing in excess of what is actually needed means repaying more at a later date. Monthly payments will be higher and payments will stretch over a longer period of time due to the interest that accrues on the loans.

For federal student and parent loans, borrowers should be aware of the repayment options that are available. In addition, there are a number of deferment or forbearance provisions available once the loan is in repayment. For some qualifying majors and professions, such as teaching, federal and state loan cancellation provisions can also be beneficial.

Click here for repayment calculators, payment plans available, deferment and forbearance options.

Click here for Loan Forgiveness Program information.

Remember, loans must be repaid even if you did not complete your program and/or degree.

How do I track and manage my loans?

To keep track of your student loans or to contact your loan servicer for repayment, log in to StudentAid.gov with your FSA ID. This website will not only show you all of the federal and private loans you borrowed, but also who the servicer is for your loan(s). The servicer is the entity you will be corresponding with to coordinate repayment.

Understand what’s involved in loan repayment,  estimate what your monthly loan payments might be, and research how to choose a repayment plan at StudentAid.gov.

You may be able to apply for loan consolidation, which allows you to combine multiple federal student loans into one loan once you graduate or leave school. The result is a single monthly payment instead of multiple ones, which can simplify the process, but it can also result in the loss of some benefits.

Because there are advantages and disadvantages to loan consolidation, research this option carefully before proceeding. If you have questions about whether or not consolidation is right for you, please contact your servicer.

When should I begin repaying my loans?

You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. However, Parent PLUS loans enter repayment once the loan is fully disbursed (paid out). Most student loans have a “grace period”,  a set period of time (usually six months) after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. The grace period gives you time to get financially settled and to select your repayment plan. Not all federal student loans have a grace period. Note that for most loans, interest will accrue during your grace period.

Your loan servicer or lender must provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.

There is no penalty for paying your loan off early or for making payments while you are still enrolled. If you have unsubsidized loans, you can (and should!) make payments on your interest that is accruing to keep your total loan debt lower.

Understand what’s involved in loan repayment,  estimate what your monthly loan payments might be, and research how to choose a repayment plan at StudentAid.gov.

What repayment plans are available to me?

When it comes time to start repaying your student loan(s), you can select a repayment plan that’s right for your financial situation. Payment plans vary in terms of length of repayment, total interest paid and payment amounts per month. Some plans are based on the income you earn. Generally, you’ll have from 10 to 25 years to repay your loan, depending on total amount borrowed and which repayment plan you choose. Contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan. You can get information about all of the federal student loans you have received and find the loan servicer for your loans at StudentAid.gov. Get detailed info about payment plans available here or view this quick loan repayment plan comparison chart.

Understand what’s involved in loan repayment,  estimate what your monthly loan payments might be, and research how to choose a repayment plan at StudentAid.gov.

What is loan default?

If you don’t make your loan payments, you risk going into default. Defaulting on your loan has serious consequences. Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe. Understand how missing a loan payment can be a problem, what default means and the consequences of default, and what you need to do if your loan is in default or if you think the default on your loan is an error. There are different options to prevent falling into default status.

If you have a loan in default, check out your options for getting back in good standing.

What are some of the consequences of defaulting?

The consequences of defaulting on a federal student loan can be severe:

  • The entire unpaid balance of the loan and any interest is immediately due and payable.
  • Loss of eligibility for deferment, forbearance, and repayment plans.
  • Loss of eligibility for additional federal student aid.
  • The loan account is assigned to a collection agency.
  • The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.
  • Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process.
  • Wages and/or tax refunds may be garnished.
  • You may not be able to purchase or sell assets such as real estate.
  • It will take years to reestablish your credit and recover from default.

If you have a loan in default, check out your options for getting back in good standing.

To view EWC’s Cohort Default Rate history, please see the Department of Education’s database.

What are some options to preventing my loan from defaulting?

Changing repayment plans: Changing repayment plans is a good way to manage your loan debt when your financial circumstances change. You can usually lower your monthly payment by changing to another repayment plan with a longer term to repay the loan. There are no penalties for changing repayment plans. Because of the impact on interest and potential loan forgiveness, it might be worth exploring another repayment plan before you consider deferment or forbearance. For example, your payments could be more affordable if you change to an income-driven repayment plan.

Contact your loan servicer to find out if another repayment plan might be the best option for you.

Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your federal student loan payments. Postponing or reducing your payments may help you avoid default.

You’ll need to work with your loan servicer to apply for deferment or forbearance; and be sure to keep making payments on your loan until the deferment or forbearance is in place.

Deferment: a postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue for subsidized loans. This request can be made if you are returning to school and are enrolled in at least half-time status.

Forbearance: a period during which your monthly loan payments are temporarily suspended or reduced. You may qualify for forbearance if you are willing but not able to make loan payments due to certain types of financial hardships.

How do I get help with loan issues?

First, ALWAYS contact your loan servicer . Staying in touch with your loan servicer will maintain a good relationship and decrease the chances of loan default. Keep your contact information up to date with your servicer so you receive important correspondence.

If you are having a problem with your federal student loan that your servicer cannot address, contact the FSA Ombudsman at the U.S. Department of Education. The FSA Ombudsman is dedicated to helping students resolve disputes and other problems with federal student loans.

You can contact the FSA Ombudsman by phone at 1-877-557-2575, by fax at 1-202-275-0549, by mail at U.S. Department of Education, FSA Ombudsman, 830 First Street, NE, Fourth Floor, Washington, DC 20202-5144, by visiting fsahelp.ed.gov or by e-mail at fsaombudsmanoffice@ed.gov.

If you have a loan in default, check out your options for getting back in good standing.

Why do I have to do Entrance and Exit Counseling?

Entrance counseling is required of all first-time borrowers at EWC. This is a federal requirement to help you understand your rights and responsibilities as a borrower. You will learn what a Direct Loan is and how the loan process works, how to manage your education expenses and about other financial resources to consider to help pay for your education while reducing your debt. You will get information on loan terminology, interest rates and average student indebtedness.

Exit counseling is required of students who borrowed loans who are nearing graduation, have left school or otherwise dropped below half-time enrollment (six credits). This is also a federal requirement to emphasize your rights and responsibilities as a borrower, plus it provides information on your grace period before repayment begins, loan repayment, payment plans available, and collects updated borrower information. You will also receive information on loan consolidation, consequences of defaulting on a loan and deferment and forbearance options available to you.

To complete counseling, you will need the following information:

  • FSA ID
  • Social Security Number
  • Date of birth
  • Driver’s license number
  • Permanent e-mail address
  • Names, addresses, telephone numbers of two references from different U.S. addresses

Both entrance and exit counseling are completed at StudentAid.gov.

For more information on student loans, see:
Understanding Student Loans
Managing Student Loans