repayment FAQs (frequently asked questions)
Many repayment programs are available, and it's important to understand all of your options. The following is a list of frequently asked questions to help you choose the repayment option that best meets your needs and circumstances.
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 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.
- Income-Based repayment — Your monthly loan payments are limited to a percentage of your income (includes spouse’s income, if applicable). Monthly payments are adjusted annually based on changes in income and family size. Income-Based repayment will also forgive remaining debt, if any, after 25 years of qualifying payments..
- Extended repayment plan — You extend payments for a lengthened repayment term of up to 25 years. (This alternative is available only to borrowers who received their first loan on or after Oct. 7, 1998, and have more than $30,000 in outstanding principal and interest through the Federal Family Education Loan Program [FFELP].)
You can contact VSAC toll-free at 800-798-8722 to discuss an alternative repayment plan.
If your loans are in a default status, please contact the Collections Department at 800-642-3177 ext 6605.
A deferment is a specific period of time during which you are approved to cease making payments of the principal on your loan.
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 are based on federal regulations. Deferments are not granted automatically — you must request a deferment. Loans in a default status are not eligible for this option.
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.Return to top
A forbearance is 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 VSAC agrees to grant a forbearance, you are responsible for the interest that accrues on your loan(s) during the period of forbearance. Normally, VSAC will ask you to pay the interest during the forbearance, but in some circumstances, VSAC may allow you to add the interest to your balance at the end of the forbearance period. Keep in mind that if you add the interest to your principal balance, you will pay more interest in the long run. Loans in a default status are not eligible for this option.
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.
Keep in mind that one of the major differences between a deferment and a forbearance is that a deferment is automatically granted (if you qualify), whereas a forbearance is granted at the lender's discretion.Return to top
Rules governing the Federal Family Education Loan Program (FFELP) require certification for certain deferments.
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. VSAC will notify you when your request has been approved.Return to top
Contact VSAC toll-free at 800-798-8722 to re-evaluate your options.
To determine if you are eligible to renew your deferment or forbearance, contact VSAC toll-free at 800-798-8722 for assistance.Return to top
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 VSAC agrees to grant a forbearance, you are responsible for the interest that accrues on your loan(s) during the period of forbearance. Normally, VSAC will ask you to pay the interest that accrues during forbearance; but in some circumstances, VSAC may allow you to add the interest to your loan balance at the end of the forbearance period. Keep in mind that if you add the interest, your principal balance increases and you'll pay more interest in the long run.
VSAC reports your loans to national credit bureaus 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 VSAC notifies you that your request has been approved.
A completed application does not alter the historical record of payments reported to the credit bureaus. For more information about credit bureau reporting or how to request a copy of your credit report, click here.
Yes, you can still apply for a deferment or forbearance unless you are in default.Return to top
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 VSAC 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 VSAC. If your loan(s) is declared to be in default, VSAC will transfer your loan(s) to the guaranty agency that issued your loan. Contact VSAC to see what guaranty agency issued your loans.
If you default on your VSAC loan(s), it’s transferred to VSAC’s Claims & Collections Department for collection. VSAC can:
- add a fee of up to 24 percent to your loan balance
- order your employer to send part of your paycheck to VSAC
- order your federal and state tax refunds, and other payments made to you by the federal government, sent to VSAC
- assign your loan to the federal government for litigation against you
- report your default to national credit bureaus
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Contact our loan counselors with questions or for help with your individual situation — before you borrow as well as during repayment.