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Direct Loans
UNIVERSITY OF ILLINOIS-URBANA
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UNIVERSTf 'i i | 3 0112 033170363
AT URBANA-CHAMPAiuim
William D. Ford Federal Direct Loan Program
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Commonly Asked
Questions
Q&A - Annual Statement *	
OPENING BALANCE	is the balance of your account as of 12/31/1997
NEW LOANS/	reflects new loan disbursements,
INTEREST/CHARGES	added interest and charges posted to the account through 12/31 /1998
SCHOOL ADJUSTMENTS/ CANCELLATIONS	reflects adjustments, such as cancellations and refunds made to the account through 12/31/1998
CAPITALIZED INTEREST	reflects total interest capitalized through 12/31/1998
PAYMENTS/ADJUSTMENTS	reflects payments and adjustments posted through 12/31/1998
ENDING BALANCE	is the balance of the account as of 12/31/1998
TOTAL AMOUNT DISBURSED	reflects original disbursement (refunds, cancellations, charges, interest or payments on the account are not reflected by this figure)
* The Annual Statement only reflects information reported by the school	
as of 12/31/1998, so the Annual Statement may differ substantially from your records. Our records will be updated as information is received	
from the school.	
1	The balance on my statement does not match the total amount of the loan on my Promissory Note. Why? There are several reasons this could happen. While there is always the possibility of an error, the more likely reasons are that: (I) Loans are not disbursed in one "lump" sum so the statement may reflect only the portion of your total loan disbursed as of 12/31/1998 or (2) There was an adjustment that did not require a change to the Promissory Note.
4	Why do I have accrued Interest on my account? This is the interest that has accrued on the Unsubsidized, Subsidized, or PLUS portions of your loans while in forbearance; on the PLUS or Unsubsidized portions of your loans during authorized periods of deferment; or on any Unsubsidized portion while you are enrolled at least half-time or during a six-month grace period. If you don't pay this interest when you get your interest statement or bill, this unpaid interest will be capitalized (added to the principal balance of the loan).
7	When does a PLUS Loan go into repayment? PLUS Loans enter repayment on the date of the last disbursement on the loan, and the first payment is due within the next 60 days. PLUS Loans do not have a grace period.
5	What does "Interest Capitalized" mean? INTEREST CAPITALIZED (or CAPITALIZED INTEREST) is unpaid accrued interest that is added to the principal balance of a loan. This results in an increase in the amount of the loan, and interest then begins to accrue on this higher principal balance.
For Direct Loans, any unpaid accrued interest is capitalized (added to the principal balance) upon entering repayment and at the end of deferment and forbearance periods.
8	When does interest on PLUS Loans begin to accrue?
Because a PLUS Loan is a type of Unsubsidized Loan, interest on a PLUS Loan starts to accrue the day the loan is disbursed. Even though the account may not be in repayment, interest is still accruing.
2	What is the difference between Subsidized & Unsubsidized Loans?
The federal government does not charge interest on a Subsidized Loan while the borrower is enrolled at least half-time, during a six-month grace period, or during authorized periods of deferment. However, interest is charged throughout the life of an Unsubsidized Loan, and it starts to accrue on the date of disbursement.
3	Why am I getting my Direct Loan mail late? If you have moved recently, have you notified us? Has your name changed? A delay in receiving your mail may be caused by an out-of-date name or address. It is important to inform us quickly of all changes in name, address or phone number. This will allow you to receive mailings in a timely manner and allow us to contact you when necessary and serve you better.
6	Do I have to pay the interest from the "Quarterly Interest Statement"? Where did it come from and when is it due? An interest statement shows the interest that has accrued on the Unsubsidized, Subsidized, or PLUS portions of your loans while in forbearance; on the PLUS or Unsubsidized portions of your loans during authorized periods of deferment; or on any Unsubsidized portion while you are enrolled at least half-time or during a six-month grace period. By paying the interest when you get an interest statement, you can avoid capitalization (the addition of interest to your principal balance, which will increase your loan amount and monthly payment amount).
Government
Documents
Rookstacks
IIRRARYI! OF I MRRANA-rHAMsv9	Why do I keep getting past due notices when I already made my payment for the previous month? We must receive your payment by the due date shown on your statement in order for the payment to be reflected on your next statement. When you mail your payment, you should mail it early enough to allow sufficient time for us to receive it by the due date,_
11	How can I temporarily postpone my monthly payments? You may be able to temporarily postpone your monthly payments by requesting and being granted a deferment or a forbearance on your loan. (Refer to Q&A # 12 for the difference between deferment and forbearance.)
DEFERMENT. In general, you may qualify for a deferment if you are in school at least half-time (including certain rehabilitation training or graduate fellowship programs), unemployed, or experiencing an economic hardship. If, at the time you obtained your Direct Loan, you had an outstanding balance on a FFEL, FISL, SLS, ALAS, or GSL Loan made before July I,
1993, you may be eligible for additional types of deferments related to (I) your education status (or the education status of the student for whom you borrowed a PLUS Loan), (2) your public service status, (3) your parental responsibilities or status as a working mother, or (4) a temporary total disability.
FOF^BEARANCE. In general, you may qualify for a forbearance if you are willing but unable to make loan payments (for example, due to poor health or economic problems). You can also qualify if you (I) serve in a medical or dental internship or residency, (2) serve in a position under the National and Community Service Trust Act of 1993, or (3) are making required payments on federal student loans that are equal to or greater than 20 percent of your total monthly gross income.
NOTE THAT for all types of deferments and for forbearance, you must meet specific eligibility criteria, and that maximum eligibility varies with each type. If you want a deferment or forbearance on your loan and you believe you may be eligible, call us at I -800-848-0979.
IF YOU ARE HAVING TROUBLE MAKING YOUR MONTHLY PAYMENTS, but are not sure whether you are eligible for a deferment or forbearance, please contact us at I -800-848-0979 to discuss your eligibility for deferment or forbearance, and to discuss other repayment options that may be available._
• *»•«
10	Can I make payments, even if I'm in * school, in grace, have a deferment or have a forbearance? Payments can be made at ANYTIME. If you are in school, or your loan is in a grace period, deferment, or forbearance, you will not receive monthly bills, but checks can be made payable to the U.S. Department of Education. Please include the borrower’s Social Security Number on the check and mail it to:
U.S. Department of Education P.O. BOX 746000 _Atlanta, GA 30374-6000
12 What is the difference between a DEFERMENT and a FORBEARANCE? While both a deferment and a forbearance temporarily postpone the payments on your loans, the differences are:
•	Eligibility requirements (refer to Q&A #11).
•	Interest charges. Interest is not charged on Subsidized Loans during a deferment, but interest is charged on Subsidized Loans during a forbearance. During deferments and forbearances, interest is charged on Unsubsidized and PLUS Loans. All unpaid interest is capitalized at the end of the deferment or forbearance period._
13 How is my payment applied to my account? Payment is first applied to any accrued charges (late charges, collection costs, etc.), then to any outstanding interest, and then to the outstanding principal balance. There is no penalty for pre-paying on the principal balance owed._
14 What if my monthly payment is too high to make? Or, what If I want to pay more each month? Can I change my monthly payment amount? Yes. Changing your monthly payment can be accomplished by changing your repayment plan. Various REPAYMENT PLAN OPTIONS are available:
. Standard Repayment plan - 10 years to repay.
. Extended Repayment plan - up to 12 to 30 years to repay, depending on loan balance.
. Graduated Repayment plan - up to 12 to 30 years to repay, depending on loan balance.
. Income Contingent Repayment (ICR) plan - up to 25 years to repay. Your payments are based on your loan balance and your income (and your spouse's income if you are married), but note that the Income Contingent Repayment plan is NOT available to PLUS Loan borrowers.
Please call 1 -800-848-0979 if you want to discuss these options._
15 Can I change repayment plans at anytime without incurring any penalties? Changing repayment plans is a good way to manage your loan debt when your financial circumstances change. There are no penalties for changing repayment plans. In most cases, you may change plans whenever you like. Call toll-free I -800-848-0979 for assistance in choosing a new repayment plan._
Other questions about your account? Call 1-800-848-0979 or write to the U.S. Department of Education, Direct Loan Servicing Center, P.O. Box 4609, Utica, NY 13504-4609.
*U.S.GPO:1999-448-114/99058
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