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There are many repayment programs available and it is
important to understand all of your options. The following is a
list of frequently asked questions to help you choose the best
repayment option for you.
- What should I
do if I'm having trouble making my monthly payments?
- What is a
deferment?
- What is a
forbearance?
- Which is the
better choice - a deferment or forbearance?
- What types of
deferments are available for my particular loan(s)?
- What is the
Repayment Wizard?
- I tried to use
the Repayment Wizard and it tells me I am ineligible to apply
online and to contact CFI-why?
- Why do I need
to get a deferment request certified?
- Do I have to
pay while I'm waiting to get a deferment request certified?
- What if my
loan(s) is in deferment and my situation changes?
- How do I
renew a deferment or forbearance?
- What happens
to the interest on my loan(s) during a deferment or forbearance?
- How do I get
a FAFSA PIN?
- While using
the Repayment Wizard, how do I print a copy of my deferment or
forbearance request?
- What happens
to my credit rating while my loan(s) is in a deferment or
forbearance?
- I'm already
past due. Can I still apply for a deferment or forbearance? What
should I do?
- What is
default?
- Why should I
avoid being in default?
- What happens
to my financial aid if I change schools?
- What if my
school closes?
- Are there any
circumstances that would cancel or forgive my loan?
- Who do I
contact if I have a question?
If your payments are set up under the Standard Repayment
Plan and you're in a situation where you anticipate continual
problems making your monthly payments under this plan (for example,
you've just started working in your chosen career), you may want to
consider one of the three alternative repayment plans:
- Graduated Repayment Plan - You start with a lower monthly
payment at the beginning of your repayment period, then gradually
increase over the course of the repayment period.
- Income-Sensitive Repayment Plan - You make a monthly
payment based on a percentage of your monthly gross income.
- Extended Repayment Plan - You extend payments for a
lengthened repayment term of up to 25 years. (Available only to
borrowers who received their first loan on or after October 7,
1998, and have more than $30,000 in outstanding principal and
interest through the Federal Family Education Loan Program
[FFELP].)
You can contact the CFI Repayment Call Center ( 919/821-4743
or toll free
1-800/722-2838 ) to discuss an alternative repayment plan.
If you're having problems making your monthly payments
because of a short-term situation (for example, loss of
job), try the Repayment Wizard to
see if you qualify for a deferment or forbearance. If you still
have questions, please contact the CFI Repayment Call Center.
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A specific period of time during which you are approved to
cease making payments of loan principal.
Normally you may qualify for a deferment of your loan
payments only after your repayment period begins. In other words,
your grace period must have expired. However, you may request that
the grace period be waived or shortened in order to be eligible for
a deferment. The types of deferments for which you are eligible are
specified by the terms of your loan(s). The criteria by which you
may be granted a deferment is based on federal regulations.
If your loan(s) is a subsidized Stafford loan, the federal
government will pay the interest that accrues during the deferment
period. If your loan(s) is unsubsidized, you are responsible for
the interest that accrues during the deferment period.
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A short-term, temporary suspension of your payments or a
reduction of your payment amount. Forbearance is intended to help
you if you're having financial difficulties and do not qualify for
a deferment.
If CFI agrees to grant forbearance, you are responsible for
the interest that accrues on your loan(s) during the period of
forbearance. Normally, CFI will ask you to pay the interest during
the forbearance, but in some circumstances, CFI may allow you to
capitalize the interest at the end of the forbearance period. Keep
in mind that if you capitalize the interest, your principal balance
increases and you will pay more interest in the long run.
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The choice depends on individual circumstances. But a
deferment is usually the better choice because, with subsidized
Stafford loans, the federal government will pay the interest that
accrues during the deferment period.
One of the major differences between a deferment and
forbearance that you should keep in mind is that a deferment is
automatically granted (if you request a deferment and you qualify)
whereas it is up to the discretion of CFI to grant forbearance.
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To find out, read through the list of
deferments to learn more about your eligibility. If you think you
may be eligible for a certain deferment, you may want to use the
Repayment Wizard. In fact, the Repayment
Wizard will direct you to the deferment that will be most
advantageous to you. Or you may want to contact the CFI Repayment
Call Center (919/821-4743 or toll free 1-800/722-2838) to discuss
all your options.
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A program that is designed to ask a series of questions for
you to answer. Based on your answers, the Repayment Wizard determines your
eligibility for a deferment or forbearance and directs you to the
option that is most beneficial for you. Since you're applying
online, you don't have to wait for CFI to mail a deferment or
forbearance request and if no certification is required, the entire
process may take place online.
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If the Repayment Wizard has determined that you are
ineligible to apply online, you should contact the CFI Repayment
Call Center (919/821-4743 or toll free 1-800/722-2838) for
assistance.
A CFI representative will help you determine the options
available to you based on your circumstances.
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Because certification for certain deferments is mandated by
the rules governing the Federal Family Education Loan Program
(FFELP).
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Yes, you must continue to make your payments unless you have
applied for and been granted a forbearance to cover the payments
that will come due while you're awaiting certification. You will
need to do so in order to protect your credit. CFI will notify you
when your request has been approved.
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Contact the CFI Repayment Call Center (919/821-4743 or toll
free 1-800/722-2838) to re-evaluate your options.
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The quickest way to renew is to use the Repayment Wizard. If you prefer,
contact the CFI Repayment Call Center (919/821-4743 or toll free
1-800/722-2838) for assistance.
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If your loan(s) is a subsidized Stafford loan, the federal
government will pay the interest that accrues during the deferment
period. If your loan(s) is unsubsidized, you are responsible for
the interest that accrues during the deferment period.
If CFI agrees to grant forbearance, you are responsible for
the interest that accrues on your loan(s) during the period of
forbearance. Normally, CFI will ask you to pay the interest that
accrues during forbearance, but in some circumstances, CFI may
allow you to capitalize the interest at the end of the forbearance
period. Keep in mind that if you capitalize the interest, your
principal balance increases and you will pay more interest in the
long run.
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You can apply for a FAFSA PIN while navigating the Repayment
Wizard. You will be directed to a secure federal government website
known as "U.S. Department of Education - The PIN Web Site." You may
also access the website at http://pin.ed.gov.
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When your session with the Repayment Wizard is complete, you
will be automatically directed to the My CFNC Web page where you
will have the option to either print your request or have CFI print
and mail the request to you.
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CFI reports your loans to the credit bureau every month
regardless of the status of your loan(s). Keep in mind that a loan
that is past due is reported as past due regardless of a pending
deferment or forbearance. Therefore, you should continue to make
payments on your loan(s) until CFI notifies you that your request
has been approved.
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Yes, you can still apply for a deferment or forbearance
unless you are in default.
Of course, you should use the Repayment
Wizard to quickly determine your eligibility for a deferment or
forbearance. If for any reason you have trouble using the Repayment
Wizard or if you are denied both a deferment and forbearance, you
should contact the CFI Repayment Call Center (919/821-4743 or toll
free 1-800/722-2838) to explore other options available to you.
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Default typically occurs when you (the borrower)
consistently fail to make your installment payments for a specified
period of time during the repayment period. But CFI may also
declare your loan(s) to be in default if you fail to meet other
terms of your promissory note or other written agreement(s) with
CFI. If your loan(s) is declared to be in default, CFI will
transfer your loan(s) to the guarantee agency.
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Failure to repay your loan as promised - defaulting -
can cause significant problems for you.
First, your loans will be turned over to the guaranty agency,
which will report your default to all national credit bureaus.
Second, even if you default, collection efforts do not stop.
Eventually, the guaranty agency or the U.S, Department of
Education may also:
- Sue you
- Obtain a judgment for a lien against your current or future real property
- Garnish your wages
- Seize any NC Lottery winnings you may win
- Notify your employer if you work for the state or federal government
- Report to all national credit bureaus that you did not fulfill your loan obligation
- Withhold our federal and state income tax refunds
- Cause you to lose any professional license you may hold
Avoiding default is very important. If you run into
difficulty making your loans payments, immediately check with your
lender on deferment, forbearance, consolidation, or graduated
repayment options. Your lender can help.
If your loans have already been defaulted, don't give up
hope; you CAN get back on track.
If you received your loans from CFI, contact the North
Carolina State Education Assistance Authority (SEAA), which is the
guarantor for North Carolina's Federal Family Education Loan
Program. You may contact them toll-free at 800-544-1644 to discuss
your options to repay your defaulted student loan.
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If you transfer to a different school, your financial aid
package does not go with you. Each financial aid office uses the
data from the Free Application for Federal Student Aid (FAFSA) to
calculate and determine an aid package for you at the specific
school. Therefore, you must reapply for aid at each different
school you attend.
When you transfer schools, you also need to contact your
lender to make sure that any pending disbursements for loans
scheduled at your previous school are cancelled. You should contact
the financial aid office at your previous school to make sure they
are aware of your decision to transfer to another school. This way
the financial aid office can make any necessary adjustments on
their end.
Typically, both schools will contact your loan holders to
update your enrollment status. However, if your lender is CFI, we
encourage you to contact us if you transfer to another school in
order that we may update our records.
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If you have a loan at a school that closes while you are
attending, you may be eligible to have your loan discharged. Please
contact us toll-free at 866-866-2362 to discuss your options.
However, if you do not qualify for loan discharge, you must pay
back your loan.
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Under certain circumstances, your loan may be canceled or
forgiven - for example, if you become completely and permanently
disabled or die. Your loan may also be canceled if your school
closes or if the school falsely certified your eligibility for the
loan. Some loans may be eligible for partial or complete
cancellation based on certain service or employment, such as
teacher loan forgiveness. Please contact us toll-free at
866-866-2362 to discuss your situation.
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Contact the CFI Repayment Call Center (919/821-4743 or toll
free 1-800/722-2838).
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