New Loan Borrower Frequently Asked Questions (FAQ)
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- GENERAL INFORMATION
Q: What are consolidation loans?
A: Consolidation Loans are designed to help student and parent borrowers simplify loan repayment by allowing the borrower to combine several types of Federal Student Loans with various repayment schedules into one loan, and/or to extend the repayment period length.
Q: Since private loans require established credit, what tips are available to maintain/establish a good credit record?
A: It is essential to understand credit reporting and credit scoring. As well, being credit wise also requires practicing good habits.
Q: How do I know if a private loan is a good deal?
A: Students and families should beware of high interest loan products and deceptive marketing tactics. It is almost always in the best interest of students to explore Federal Student Loan options before applying for private loan products. Purdue students are encouraged to research private student loan options at http://www.finaid.org/loans/privatestudentloans.phtml.
Q: What information is available specifically for Federal Loan borrowers?
A: Federal Loan borrowers should review information at www.purdue.edu/dfa/loans/repayment.php.
Q: How can I estimate monthly student loan payments based on various interest rates and loan amounts? Is there a good calculator?
A: We recommend using the Department of Education repayment calculator that uses actual loan history and shows standard 10-year repayment results. Various repayment plans are described. Another repayment calculator is available at the www.paybacksmarter.com website if you create an account.
Q: How do I know whether I'll be able to afford student loan payments in the future?
A: Student loan borrowers need to have a realistic projection of anticipated estimated salary and future potential earnings; starting salaries for Purdue graduates are available a website provided by the Purdue Center for Career Opportunities.
Q: How do I know how much I should borrow and still comfortably repay?
A: The www.finaid.org website provides online calculators to provide undergraduates, graduate students, and parents helpful information to determine "how much debt is too much debt".
Q: Are there any special loan deferment positions for members of the military?
A: Yes. The College Cost Reduction and Access Act (CCRAA) made several welcomed changes to the military service deferment created by Higher Education Reconciliation Act of 2005 (HERA); contact your Loan Servicer for more information.
Q: Is there any public service loan forgiveness?
A: Yes. The recently enacted College Cost Reduction and Access Act (CCRAA) creates a new loan forgiveness option for Direct Loan borrowers who hold public service jobs. FFEL borrowers may take advantage of public service loan forgiveness by consolidating or reconsolidating their FFEL loans into the Direct Loan program; see your Loan Servicer more information.
Q: What type of assistance is available once I start repayment?
A: Your lender or loan services can answer almost all loan repayment questions.
- LOAN REQUIREMENTS
Q: What is Loan Entrance Counseling?
A: Students who borrow Federal Direct Stafford loans (or receive a TEACH Grant) are required to complete Federal Direct Loan Entrance Counseling. Federal Perkins Loan, Purdue Loan, and Health Professions Loan borrowers should receive Loan Entrance Counseling through ECSI when they complete a promissory note.
Q: What is Loan Exit Counseling?
A: Federal Perkins and Purdue loan borrowers should receive Loan Exit Counseling information before graduating or otherwise leaving school. The University Collections Office is required to conduct Loan Exit Counseling for Perkins, Purdue, and Health Profession Loan borrowers. Federal Direct Stafford Loan borrowers and TEACH Grant recipients should receive Direct Loan Exit Counseling information before graduating or otherwise leaving school.