OGSLP - Borrowers FAQ

Frequently Asked Questions

When do I begin making payments on my student loan(s)?
What is OGSLP and how is it different than my loan holder (lender/servicer)?
Where are my loans?
What is the interest rate on my student loans?
What is capitalization?
What is the difference between subsidized and unsubsidized loans?
Who is involved in the student loan process?
How did I become delinquent on my student loans?
What is the difference between delinquency and default?
I'm currently not able to make my student loan payments. What can I do?
Who is responsible for payments on a PLUS Loan?
What is a deferment?
What is forbearance?
What is consolidation?
Why am I receiving delinquency notices while attending in school?
Why do you keep calling my relatives and friends?
Who can help me manage my student loan debt?

Default
What is a defaulted loan?
I mailed in my deferment/forbearance to the lender. How can I be in default?
What can I do if I can't pay the loan in full and I can't make a substantial payment per month on my defaulted loan?
At what point is my default reported to the credit bureau?
When is collection cost added?
What happens when my loan goes into default?
Now that I am in default can I get more student aid?
How can I get my loan out of default?
Can my Federal and state Taxes be intercepted?
What is rehabilitation (of a defaulted loan)?
What is the requirement to qualify for loan rehabilitation?
Can I consolidate this loan?
What is the difference between rehabilitation and consolidation?
Can I get a forbearance or deferment now that my loan is in default?

Q. When do I begin making payments on my student loan(s)?
A. You will enter a grace period for typically six months after you leave school or drop below half-time enrollment before you begin making monthly payments. You will receive a repayment schedule from your loan holder.

Q. What is OGSLP and how is it different than my loan holder (lender/servicer)?
A. The Oklahoma Guaranteed Student Loan Program (OGSLP) is the guarantor of your student loan(s). Your loan holder accepts your monthly payment and processes deferment and forbearance requests.

Q. Where are my loans?
A. Call OGSLP's Default Prevention department at 800.358.5460, in Oklahoma City at 405.234.4352. Default Prevention Staff can help you with loans guaranteed by OGSLP. You can also access your loan information by going to the National Student Loan Data System`s Web site at www.nslds.ed.gov . Click on the FAQ flag, and then click on the question "what information is available to me through the NSLDS Student Access web site?" You will then see the types of data available and also the personal information you will need to use the Web site.

Q. What is the interest rate on my student loans?
A. Interest rates on federal student loans can either have a fixed interest rate or a variable interest rate. New loans first disbursed on or after July 1, 2006, will have a fixed interest rate. Loans disbursed prior to July 1, 2006, will have a variable rate that will change every July 1 and will not exceed 8.25 percent for Federal Stafford loans or 9.00 percent for Federal PLUS loans. Your loan holder will notify you of interest rate changes throughout the life of your loan.

Q. What is capitalization?
A. The process of adding unpaid interest to the principal balance of an education loan, increasing both the total amount to be repaid and the monthly payment.

Q. What is the difference between subsidized and unsubsidized loans?
A. A subsidized loan is a need-based loan on which interest is paid by the federal government during the in-school, grace and deferment periods. An unsubsidized loan is not based on financial need and the borrower is responsible for interest during the life of the loan.

Q. Who is involved in the student loan process?
A. The following are the "players" in the student loan process:

The U.S. Department of Education administers the Federal Family Education Loan Program (FFELP) and develops regulations to protect you as a borrower
The Guarantee Agency (Guarantor) acts as an agent for the federal government to administer and insure FFELP loans made by lenders in the event of default, bankruptcy, disability or death of borrowers.

The guarantor will assist you if you have problems with your student loan and, if you do not repay your loan, the guarantor will purchase your loan from the lender and collect directly from you. In Oklahoma, the Oklahoma Guaranteed Student Loan Program, a division of the Oklahoma State Regents for Higher Education, serves as the federal government's guarantee agency.

The Lenders are banks, credit unions, and savings and loan institutions that provide the loan funds for your educational costs.
The Secondary Markets are organizations established to purchase loans from lenders, allowing lenders to replenish capital to fund new loans. Selling loans is a common practice among lenders and does not affect the terms and conditions under which the loan was originally made.
The Servicers are companies employed by a lender or secondary market to perform the administrative tasks that are associated with educational loans such as loan repayment.

Q. How did I become delinquent on my student loans?
A. When you continually fail to make your student loan payments, your loan holder will report the delinquency to the guarantor. You will receive letters from both your loan holder and guarantor asking you to contact them to help resolve your delinquency.

Q. What is the difference between delinquency and default?
A. A delinquency is when your loan payment with your loan holder is past due or late. A default is when your loan reaches 270 days delinquent at your loan holder and your guarantor purchases your loan as a default.

Q. I'm currently not able to make my student loan payments. What can I do?
A. Contact your loan holder and explain your situation. You may be eligible for a deferment or forbearance that will temporarily delay your payments. You may also need to provide supporting documentation for your deferment or forbearance request.

Q. Who is responsible for payments on a PLUS Loan?
A. The borrower who took out the loan. This could be the parent or guardian who borrowed on behalf of a dependent undergraduate student or a graduate or professional student.

Q. What is a deferment?
A. An authorized period of time during which a borrower may postpone either principal payments or principal and interest payments. The federal government makes interest payments on subsidized Federal Stafford during authorized deferment periods.

Q. What is forbearance?
A. An authorized period of time during which the loan holder agrees to temporarily postpone or reduce a borrower's payment if the borrower intends to repay his or her loan but is having temporary financial difficulties. Borrowers are still responsible for the interest during this period.

Q. What is consolidation?
A. A loan program that allows borrowers to combine all of their federal education loans into a single loan. The program allows borrowers to make a single monthly payment and extend the repayment period (up to 30 years depending on the loan amount). Consolidation loans can make loan repayment more manageable for borrowers with high loan balances.

Important note: Due to market conditions, many lenders are not currently offering consolidation loans. If you are considering student loan consolidation,
please contact your existing lender(s) for more information about
consolidation or repayment alternatives to consolidation.

Q. Why am I receiving delinquency notices while attending in school?
A. You should contact your lender immediately and notify them of any changes in your enrollment status such as: you transferred schools, you dropped below half time or you are attending school beyond your anticipated graduation date.

Q. Why do you keep calling my relatives and friends?
A. When you signed your promissory note, you provided the names, addresses and phone numbers of relatives and friends so that your school, loan holder or guarantor would be able to reach you.

Q. Who can help me manage my student loan debt?
A. Our Default Prevention department is dedicated to helping borrowers manage their student loan debt. If at any time during your repayment term you are unable to make your student loan payment, please contact your lender immediately for available deferment or forbearance options. We are also available to help you develop a successful repayment strategy and provide you with overall debt management counseling. Contact us at 800.358.5460, in Oklahoma City at 405.234-4352.

Default

Q. What is a defaulted loan?
A. A defaulted student loan occurs when a borrower fails to repay his or her loan according to the terms agreed upon on the promissory note. This usually happens if a borrower becomes 270 days delinquent with the lender. Default can also occur for failure to submit requests for a deferment or cancellation on time. If a loan defaults, the guarantor (OGSLP) purchases the loan from the lender and begins collection activities.

Q. I mailed in my deferment/forbearance to the lender. How can I be in default?
A. This agency considers you in default based on the information sent by your lender. If you have concerns about a deferment/forbearance, you need to contact your lender. You are still expected to make arrangements to set up a satisfactory repayment agreement with OGSLP.

Q. What can I do if I can’t pay the loan in full and I can’t make a substantial payment per month on my defaulted loan?
A. You can enter into a satisfactory repayment plan with OGSLP. Contact OGSLP for further assistance at 1.800.522.8022.

Q. At what point is my default reported to the credit bureau?
A. 60 days from the date of default.

Q. When is collection cost added?
A. Collection cost will be added if:
- No payment is made within the first 60 days of default, OR
- Payment ever becomes 35 days delinquent.

Q. What happens when my loan goes into default?
A.
- No more Title IV financial aid
- No grants
- State and federal tax refunds or other federal payments can be offset and applied to your student loan account.
- Possible wage garnishments
- Possible hold on your academic transcript
- Default is reported to credit bureaus
- Capitalization of accrued interest, increasing the loan balance
- Collection costs (approximately 19%) added to the loan balance

Q. Now that I am in default can I get more student aid?
A. Yes, (must not have ineligible loans) only after you have made 6 consecutive satisfactory payments on your defaulted student loan. You must continue to make on-time monthly payments to continue to receive aid while the loan is in default.

Q. How can I get my loan out of default?
A You can:
- Make lump sum payment to pay the loan in full
- Make monthly payments until the balance is paid in full
- Make and fulfill a settlement offer

As long as the loans are not ineligible funds, you can:
- Rehabilitate the loan
- Consolidate the loan

Q. Can my Federal and state Taxes be intercepted?
A. Yes, and the money will be applied against the balance of your defaulted loan. This is a non-voluntary payment

Q. What is rehabilitation (of a defaulted loan)?
A. A process by which a borrower may bring a FFELP loan out of default by adhering to specified repayment requirements.

Q. What is the requirement to qualify for loan rehabilitation?
A. Twelve consecutive on time payments. Note: Beginning July 1, 2006, borrowers will only need to make 9 monthly payments instead of 12 to rehabilitate a defaulted loan.

Q. Can I consolidate my defaulted loan?
A. Yes, after you have established monthly payments and met the required number of payments.

Q. What is the difference between rehabilitation and consolidation?
A. Rehabilitation brings your loan out of default and updates any credit bureau listings made by OGSLP and your loan is purchased by a lender. Consolidation will bring your loan out of default by making a new loan with different repayment terms. Your default credit rating is not completely removed with a consolidation loan.

Q. Can I get a forbearance or deferment now that my loan is in default?
A. No