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Financial Aid
Borrower Benefits
Choosing the Right Borrower Benefits Program
Many lenders offer benefits programs to their student loan borrowers
as an incentive to maintain a good payment history. Because each
program may be just a bit different, it's sometimes difficult
to determine the best option. Use the information here to help
ensure you're asking the right questions when deciding which Borrower
Benefits Program is right for you.
Benefits Offered May Include:
Reduced interest rate for on-time payments - your interest
rate may be reduced by a certain percentage if you make your
payments on time for a specified period of time, such as 12,
24 or 36 consecutive months.
Reduced interest rate for direct debit payments - your
interest rate may be reduced by a certain percentage if you
have your payment automatically deducted from your checking
or savings account.
Rebate at time of payoff - you may eligible to receive
a rebate of part of your loan balance at the time it's paid
in full.
Rebate or loan credit for on-time payments - you may
be eligible to receive a rebate of part of your loan balance,
or a credit applied against the balance if you make your payments
on time for a specified period of time set by the lender.
Waived or rebated fees - any applicable fees may be
waived or paid by the lender or guarantor, or may be wholly
or partially rebated.
Rebate or loan credit of fees - any applicable fees
may be wholly or partially rebated, or the same amount applied
as a credit to your loan balance when you enter repayment or
other milestone set by your lender.
Lender makes last payment(s) - your lender may make
the last one or several of your payments on your behalf, based
on requirements set by the lender.
Principal reduction - you may qualify to have your balance
reduced by a specified amount, if you meet conditions set by
the lender.
Questions to Ask
What if my payment is late?
What is considered "late"? One day? Ten days? Other?
Is there a grace period for late payments which would still
let me qualify for the benefit?
Must my payments be made according to my original payment schedule
in order to qualify?
Can I/How can I regain eligibility for the benefit if I lose
it?
What happens to my benefit if I receive a deferment or forbearance
for my loan?
What if my lender sells my loan(s) to another lender or contracts
with a servicer to service my loan(s)?
Will I be required to sign up for programs at the lending institution
(e.g., e-mail subscription services, electronic deposit/payments/statements)
in order to qualify for the benefit?
Must my application be "e-signed" in order to receive
the benefit?
What it my account doesn't have sufficient funds to cover payments
made by electronic debit?
How long will the benefit apply? The entire life of the loan
or for only a specified period?
Does the benefit apply to all of my loans or just some of them?
If I consolidate my loan(s), will the benefit still apply? Is
there a different benefit(s) for consolidation loans?
Is a waiver or payment of fee contingent on the guarantor used?
What if I pay off my loan early?
Can the benefit change or be rescinded at a later point?
Will I receive a certificate or coupon that must be presented
to receive benefits?
What percentage of borrowers qualifies for and actually receives
borrower benefits?
Things to Remember
Compare all offered benefits to determine the best option
for you.
Be sure to keep all of your student loan paperwork, including
information about your borrower benefits program, in a central,
easily-accessible location.
Information about borrower benefits may be printed in a brochure
from your lender, and/or may be listed on their Web site. Be
sure to keep dated copies of the applicable information.
When you finish college and begin repayment, make inquiries
about when the benefits will begin and verify that what you
were offered is what you're receiving.
Last updated
November 29, 2007 12:32 PM
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