Frequently Asked Questions
What is CornerStone Education Loan Services?
CornerStone Education Loan Services was created by UHEAA to bring excellent customer service to students throughout the nation.
Why not just go by UHEAA?
UHEAA is a subsidiary of the Utah State Board of Regents with the specific mission of assisting students with ties to Utah. CornerStone is a national service that was created to service federal student loans throughout the nation.
About Federal Loans
How do I know what type of federal loan I have?
There are a couple ways to find out if you have a FFELP Loan or a Direct Loan:
- Sign into Account Access. You will see a list of your loans with CornerStone. Account access provides details about each loan, including the loan type, the interest rate, the balance and more.
- Visit the National Student Loan Data System (NSLDS). Check NSLDS to see a complete list of your FFELP Loans and Direct Loans, you'll need your federal PIN to access the information.
What are my responsibilities as a borrower?
Your responsibilities are the same whether you have a FFELP Loan or a Direct Loan:
- Borrow only what you need.
- Read your promissory note.
- Pay on time.
- Keep in touch with CornerStone.
You still have to repay your loan even if you don't graduate.
Do You Have Transferred Loans?
Does the loan transfer affect all of my student loans?
Not necessarily. CornerStone will notify you of the loans we service. For additional details create an online account and sign into Account Access.
Please continue to make all payments for loans that remain with your previous servicer. If you aren't certain about who services your loans, visit the National Student Loan Data System at nslds.ed.gov for a complete list of your FFELP Loans and Direct Loans and their servicers.
I already have an online account with CornerStone, do I need to create a new one?
No, your transferred loans roll under the same account number. However, if you don't have an account with CornerStone, you have to create one through: Create Account.
Will my account number stay the same?
If you already have an account with us, your transferred loans roll under the same account number. If you do not have an account with us, we will assign you an account number. Look for your unique 10-digit number on all correspondence, billing statements, etc.
Does the loan transfer affect my grace period? Do I need to begin making payments?
No. If you have a Stafford Loan (subsidized or unsubsidized), you get a 6-month grace period that begins the day after you graduate, leave school, or drop below half-time status and ends the day before your repayment period begins.
Will my monthly payments change?
No, we received your current repayment plan from your previous servicer.
Will my due date change?
No, we received your due date information from your previous servicer.
Can I make online payments, schedule payments in advance and manage my loans like I did before?
Yes. Account Access allows you to make online payments from the bank account of your choice, schedule payments up to 60 days in advance, view details of your loan, and much more. If you haven't signed up for an account yet, sign up today.
I signed up for paperless billing with my previous servicer. Do I need to re-apply with CornerStone?
Yes. You need to enroll in paperless billing with CornerStone if you haven't yet.
I applied for a deferment or forbearance with my previous servicer. Do I need to re-apply with CornerStone?
If your previous servicer approved your deferment or forbearance before your loan was transferred, you do not need to re-apply.
If you didn't receive confirmation that your deferment or forbearance was approved before your loan was transferred, please contact us to find out what you need to do.
What do I do if I just sent a payment to my previous servicer?
You don't have to do anything. Your previous servicer will forward it to us.
Do I need to do anything if I use a bill pay service to pay my bills?
Yes. You need to contact your service and let them know that CornerStone is the recipient of all future payments.
Will my CornerStone 1098-E Student Loan Interest Statement include the interest for all the payments I made this year?
No. The 1098-E only applies to the time period after your loan was transferred. You'll receive a 1098-E from every servicer where you paid $600 or more in interest.
I'm still in school, how does the loan transfer affect me?
As long as you're enrolled more than half-time, your loan status is the same.
Will my co-maker/endorser still have access to my loans with CornerStone?
Yes. They will have their own account number that they can use to sign in.
Do You Have Direct Loans?
What kind of fees do Direct Loans have?
Origination fees are charged by the U.S. Department of Education when you borrow a Direct Loan. These fees are deducted when your loan is disbursed.
The origination fee is:
- For loans awarded on or after December 1, 2013, the origination fee for Direct Subsidized or Unsubsidized Loans is 1.072%. If your loan was awarded after July 1, 2013 and before December 1, 2013, the origination fee was 1.051% and for loans awarded before July 1, 2013 the origination fee for Direct Subsidized or Unsubsidized Loans was 1%.
- For loans awarded on or after December 1, 2013, the origination fee for Direct PLUS loans is 4.288%. For loans awarded on or after July 1, 2013 and before December 1, 2013, the origination fee was 4.204% and for loans awarded before July 1, 2013 the origination fee for Direct PLUS Loans was 4%.
Do I need to pay interest while I'm still in school?
Maybe. It depends on the type of loan you have:
- Subsidized Loans - No. The government pays the interest on your loan while you're in school.
- Unsubsidized Loans - No. You don't have to pay interest while you're in school or while you have an in-school deferment. Although, paying interest early saves you money in the long run. Any interest you don't pay during this period will be added to your principal balance (capitalized). Because interest is added to principal when it is capitalized, you will pay more over the life of your loan.
- Parent PLUS Loans - Interest accrues from the day of disbursement, if you don't pay the interest it will be added to your principal balance before your loans enter repayment.
Do Direct Loans have different repayment options than FFELP Loans?
Direct Loans have the same repayment options as FFELP Loans, with two exceptions:
- The Income Sensitive Repayment Plan is not available for Direct Loans.
- The Income Contingent Repayment Plan is available for certain Direct Loans. Your required monthly payment is based on your eligible loan debt and on your and your spouse's adjusted gross income and family size. The payment amount may be adjusted annually and the maximum repayment period [under this plan] is 25 years.
What incentives are offered on Direct Loans?
You will receive an interest rebate of:
- 0.5% of the principal amount of any Direct Stafford Loan first disbursed on or between July 1, 2010 and June 30, 2012.
- 1.5% of the principal amount of any Direct PLUS Loan first disbursed on or between July 1, 2000 and June 30, 2012.
You have to make your first 12 monthly payments within 6 days of your due date to keep this rebate. If you don't, it will be rescinded and added to your principal balance.
You are eligible for an interest discount of 0.25% for using automatic payments
Student Loan Questions
About Student Loans
What does Subsidized mean?
Subsidized means that the government pays the interest on your loans while you are in school and in periods of deferment. And for loans disbursed before July 2012, the government pays the interest while you're in your grace period.
What does Unsubsidized mean?
Unsubsidized means that you are responsible for paying the interest on your loans from the moment they are disbursed (even while you're in school or deferment). Your interest can be capitalized (added to your principal) at specific times during the life of your loan.
Direct vs. FFEL
What is the difference between Direct and FFEL Loans?
The main difference between Direct Loans and Family Federal Education Loan Program (FFELP) loans is the source of funding. The funds for FFELP loans came from financial institutions, whereas the funds for Direct Loans come directly from the U.S. Department of Education, from the U.S. Treasury.
What repayment plans are available through each loan program?
Most repayment plans are the same, including standard repayment, extended repayment and graduated repayment; other repayment plans are specific to the loan program. Income-Contingent Repayment (ICR) is available only to Direct Loan borrowers and Income-Sensitive Repayment (ISR) is available only to FFELP borrowers. Income-Based Repayment (IBR) is a new program available to both loan programs. Pay As You Earn is a repayment program based on your income.For more information about repayment plans visit our Repayment Plans page.
What borrower benefits are currently available?
The largest borrower benefit offered by the Direct Loan Program is a 0.25% interest rate reduction on your student loans by signing up for automatic payments. This is the most noticeable borrower benefit, other benefits include a reduction in the loan origination fee for making your first 12 payments on time. If you fail to make a payment on time (within six days of the due date) within the first 12 months, the origination fee will be added back to into the principal of your loan(s). If you have questions about the borrower benefits available to your loans contact CornerStone.
What is Loan discharge?
Loan discharge is the process by which student loan debt can be eliminated, releasing the borrower from their obligation to repay their debt, provided they meet certain criteria.
How do I qualify for loan discharge?
There are many types of discharge, ranging from partial to full loan discharge. Below is a list of loan discharge types, as well as a short description of their eligibility requirements.
Closed School Discharge
- If your school closes while you’re enrolled or soon after you withdraw, you may be eligible for discharge of your federal student loan. For complete details on this loan discharge type or to apply, please see the School Closure Discharge Application, or feel free to reach out to one of our customer service representatives.
- Please be advised, your discharged amount may be considered taxable income.
Unpaid Refund Discharge
- If you withdraw from school after receiving a loan, your school may be required to return part of your loan money. You may be eligible for a partial discharge of your Direct Loan or FFEL Program loan if you withdrew from school, but the school did not return the portion of your loan that it was required to return under applicable laws and regulations. Check with the school to see how refund policies apply to federal aid at the school. Only the amount of the unpaid refund will be discharged. For complete details on this loan discharge type or to apply, please see the Unpaid Refund Discharge Application, or feel free to reach out to one of our customer service representatives.
- Please be advised, your discharged amount may be considered taxable income.
False Certification or Unauthorized Payment/Signature Discharge
You may be eligible for this discharge if you fall into one of these circumstances:
- Your school falsely certified your eligibility to receive the loan based on your ability to benefit from its training, and you did not meet the ability-to-benefit student eligibility requirements (for example, you did not have a high school diploma or General Educational Development certificate).
- The school certified your eligibility, but because of a physical or mental condition, age, criminal record, or other reason, you would not meet state requirements for employment in the occupation in which you were being trained.
- If you were a victim of Identity Theft, and as a result student loans were obtained in your name, you may be entitled to a discharge of your obligation to repay these loans. For complete details on this loan discharge type, please reach out to one of our customer service representatives.
- An individual from a school signed your name on the application or promissory note without your authorization, or an individual from the school endorsed your loan check or signed your authorization for electronic funds transfer without your knowledge, unless the loan money was given to you or applied to charges that you owed to the school.
- For complete details on this loan discharge type or to apply, please view the False Certification Loan Discharge Applications, or feel free to reach out to one of our customer service representatives.
- All funds discharged in this manner may be considered taxable income
Total and Permanent Disability (TPD) Discharge
- All TPD claims are currently handled by Nelnet. To learn more, please visit the TPD Website
- All funds discharged under TPD on or after January 1, 2018 and on or before December 31, 2025 will be considered non-taxable income.
- In the event that you or your student passes away, your family is not responsible to pay any portion of the remaining loan balance. Your loans will be discharged.
- All funds discharged due to death on or after January 1, 2018 and on or before December 31, 2025 will be considered non-taxable income.
Keeping Information Safe
What is identity theft?
Identity theft is when someone other than you uses your personally identifying information (PII) without your knowledge to commit fraud and/or other crimes. PII includes your name, Social Security number or credit card number.
How do I keep my information safe?
To avoid identity theft, you have to understand the ways your personally identifying information (PII) can be stolen.
- Dumpster Diving. Thieves will look for bills and other PII in your trash. To make it more difficult for thieves to find your information in the trash, shred any documents that include any PII before throwing it away.
- Skimming. Thieves can store your credit card or debit card numbers when your card is being processed. Make sure that you only use your credit/debit cards at reputable places. If people are acting suspicious or there are strange attachments on the credit/debit card machine do not use your card.
- Phishing. Thieves will send you e-mails, text messages or phone calls posing as a bank or other financial institution to trick you into telling them your PII. Do not give your information to anyone over the phone especially if you didn't initiate contact with the other person.
- Change your Address. Thieves will use change of address forms to get your mail sent to a different address where they can intercept it. Keep track of the mail you receive and regularly check the address on file where you do business.
- Stealing. Thieves still use low-tech ways to get your information, like stealing your wallet or purse to find your PII. Be aware of your surroundings and take precautions to protect your belongings.
- Pretexting. Thieves will contact your financial institution, utility company or other institution to get your PII. Keep track of the contacts you have where you do business regularly.
What should I do if my identity was stolen?
The first steps you should take are to file a police report, check your credit reports, notify creditors and dispute any unauthorized transactions. Unfortunately, you might not know anything is wrong until after your information has been used. Follow the steps your financial institutions and other businesses give you to restore your standing.
Student Loan Assistance Scam Basics
What is a student loan assistance scam?
Many student loan debt relief companies may charge fees to provide services that the U.S. Department of Education and CornerStone can provide for free. Visit the Department Of Education’s blog for more information.
What services do you provide for free?
We offer a variety of services including but not limited to:
- Lowering or postponing your monthly payment
- Offering consolidation, forgiveness, and discharge guidance
- Changing your repayment plan
- Assisting in the process of filling out forms
I think I am a victim of a student loan assistance scam. What should I do?
Report the company and the actions that have occurred to your state Attorney General. To check the status of your account, please contact one of our Customer Service Representatives immediately at 1-800-663-1662.
Updating Your Account
How do I update my account information?
You can update your information in Account Access. Make sure to update information any time your contact information changes so you will get important information from CornerStone.
If I change my demographics in Account Access, how long before it updates on your systems?
If you change your address or telephone through our web site, it will update in our system within two hours. However, if the update was made at the end of a business day, the change will not occur until the following business day.
What do I need to do to change my name on CornerStone's records?
Because of federal regulation, we are required to document all name changes. To update your name send one of the following documents:
- A copy of your Social Security card with your new name;
- A copy of your driver's license with your new name;
- A copy of your marriage certificate (if that's why your name changed);
- A copy of your passport with your new name;
- A copy of military orders, documents or papers with your new name;
- A copy of court documents filed for a name change;
- A copy of a divorce decree (if your name changed because of divorce).
Once we have one of these documents, we will update our records with your new name.
How do I change my Social Security number?
If you need to change your Social Security number please send one of the following pieces of documentation. Make sure that the documentation you send has the same name that we have on file.
- Your Social Security card or written verification from the Social Security Administration;
- One of your W2 forms;
- Your driver's license with the Social Security number on it;
- Official military documents, orders or papers with your Social Security number.
Are there any penalties to prepaying my loan balance?
How do I pay off my loan?
What happens if I pay more than my monthly installment amount?
If you pay more than your monthly installment amount your account will be "paid ahead." Being paid ahead will affect the amount due on future monthly billing statements.
When your account is in a paid ahead status your monthly statement will reflect a current amount due of $0.00. Below the statement detail, will be more information indicating when the next payment is due and how much that payment will be.
For example, if your monthly installment amount is $50 and you pay $100, your next billing statement will show $0.00 due for that month. However if you pay $75, then your next billing statement will show $25 due for that month.
Important note: Even when your billing statement shows $0.00 due, interest continues to accrue every day, so it’s beneficial to continue to pay your regular payment amount each month rather than skipping a month. If you purposely paid a whole month ahead so you wouldn’t have your regular payment, just be aware that interest is continuing to add up even on the “month off” from payments.
If you are paying under the Income-Based Repayment (IBR) plan or Income Contingent Repayment (ICR) plan and your scheduled payment is $0.00, any money you choose to pay will not pay your account ahead.
What is a Third Party?
Simply put, a third party is anyone other than the loan borrower or endorser.
Can my parents receive information about my loan?
Unless your parents are endorsers on your student loans, they are considered third parties and cannot receive information about your loan. You can give them access to specific information about your loan(s) by filling out the Third Party Authorization form and returning to to CornerStone. This also applies to anyone else who is not the borrower or an endorser on the loan.
What information can someone I authorized as a third party receive?
We can provide the same information we provide to a borrower to any authorized third party. However, while a borrower can request any and all changes to his/her account, an authorized third-party can only request changes to a borrower’s address and telephone information.
What information can someone I don't authorize as a third party receive?
No information about a borrower's account can be given to an unauthorized third-party. Without the permission of the borrower, we cannot even confirm that a borrower has an account with us, or disclose any information specific to the borrower’s account. We can, however, provide general information about student loans.
Can an authorized third-party set up or change a payment arrangement?
No. Third-party authorization only entitles the authorized party to receive information. For someone other than the account holder to perform any actions on an account they need to have a Power of Attorney.
How can I find my loan balances?
Sign into Account Access and navigate to View Loan Details. Here you can find your current principal balance, unpaid interest and total current balance. You can also find the date the loan was disbursed, the type of loan, and your loan status. If you click on View Details, you can see the current interest rate on all of your loans.
Where can I find the interest rates on my loans?
Log onto Account Access and navigate to View Loan Details. Here you can find your current principal balance, unpaid interest and total current balance. You can also find the date the loan was disbursed, the type of loan, and your loan status. If you click on View Details, you can see the current interest rate on all of your loans.
I thought I was already signed up for automatic payments, how do I check?
Log onto Account Access and navigate to Payments & Billing and then automatic payments. If you are signed up for automatic payments your payment information will be displayed. If not, you will see a link to download the automatic payment application.
How can I see how much I've already paid?
Log into Account Access and navigate to Payments & Billing then click on Payment History. You'll be able to see how much has gone to principal, fees, interest, and the total amount paid. You can also view detail about each payment.
Don't I get more than one grace period?
You receive one six-month grace period for the duration of your loans. Once you have used your grace period, you will not receive any additional grace periods.
How do I get a lower payment?
Automatic Payment Basics
Can you automatically deduct my payments from my bank account each month?
Yes, we offer automatic payments. It's free, it's convenient, and you will qualify for a 0.25% interest rate reduction.
Why should I sign up for automatic payments?
We know your time is valuable, automatic payments make it easy to repay your loans because you don't have to think about it. Just sign up once and your payment will be made each month on time and without worry.
How do I know if I've already signed up for automatic payments?
Each month you will receive a billing statement. If you are currently enrolled in AutoPay, there will be a message on your statement indicating your payment will be processed electronically. You can also log into Account Access and navigate to Payments & Billing then to Automatic Payments. If you're already signed up, it will list your account information and the payment information. If you haven't signed up, it will give you the chance to download the autopay form.
When is my automatic Payment drawn if my due date falls on a weekend?
The payment will be withdrawn on the next business day, but will be posted to our system on the due date in order to keep your account current. The payment will never be drawn before the scheduled due date.
How much notice do I have to give to stop an automatic payment from being made?
You must allow at least three business days prior to your payment due date in order to stop an automatic payment from being drawn. For payment due dates that fall on a weekend, notification must still be received three business days prior to your payment due date to cancel the payment before the withdrawal process begins.
Signing Up For Automatic Payments
How do I sign up for autopay?
When will automatic payments start?
It will take about 10 days for your automatic payment application to be processed. We'll send you a confirmation before we start withdrawing your payments. Make sure to keep making payments until you get confirmation.
Updates To My Automatic Payments
How can I make changes to my automatic payments?
Please fill out a new form and return it to us. Currently, we cannot process electronic requests. Please mail your completed form. Or you can call us to make changes.
Your Enrollment Status
I am still in school. Why are my loans coming due?
To qualify for an In School Deferment, you must be enrolled half-time or more at an eligible institution. Please contact your school to verify your current enrollment status.
How will CornerStone know that I'm back in school?
If your school has the capacity to update the National Clearinghouse Database, they will automatically notify us of your enrollment status. If your school does not have access to the National Clearinghouse database, you will need to request that they send us an Enrollment Verification Report.
What do I need to do while I'm in school to make sure my loans are in good standing?
I just graduated, what should I do now?
First of all, CONGRATULATIONS! Graduating from college is a serious accomplishment. Here are some other things to keep in mind:
- Make sure to keep CornerStone up to date if you change your address, phone number or e-mail address
- If you have a grace period start planning how you will start paying your student loans.
- We will send you information as you get closer to repayment. Please follow any instructions included in the correspondence we send.
Why are payments due? I just graduated. Don't I get a grace period?
If you have consolidated loans, you no longer have a grace period. If you have not consolidated your loans, you have likely already used your one allotted grace period.
How long until my loan is paid off?/How long will it take to pay off my loans?
The amount of time it will take for you to pay off your loans depends on the amount you borrowed, your interest rate, and your repayment period. Click here to try our student loan payoff calculator to give you an idea about how long it will take before you pay off your loans.
Why didn't my whole payment go to principal?
When we receive a payment we apply the payment to any accrued interest and fees first and then to principal.
Do you take credit cards or debit cards?
We do not take payments by credit cards or debit cards.
How can I make a payment?
The four main ways to make a payment are autopay, online payments, payments over the phone and payments through the mail.
The easiest way to make a payment is by using autopay. You can set up your payment to be withdrawn on time each month without worrying about finding a stamp or remembering to call us. Plus you can get an interest rate reduction for using autopay. Click here for more information about using autopay.
Do you take cash payments?
To help us avoid the temptation to track George, we cannot take cash payments for student loans. Please make a payment online, over the phone, or through the mail.
How do I make a payment online?
Log into Account Access and select Payments & Billing then follow the instructions on that page to make a payment.
Is it free to make a payment over the phone?
Yes. You can always make a payment free of charge by calling our customer service department.
How can I see how much I've already paid?
Log into Account Access and navigate to Payments & Billing then click on Payment History. You'll be able to see how much has gone to principal, fees, interest, and the total amount paid. You can also view detail about each payment.
What happens when a payment is returned for Non-Sufficient Funds (NSF)? Will it be re-submitted to the bank?
If the payment was made by the borrower through Check-by-Phone, on our web site, or any other way the you initiated the payment, we will re-submit it to the your bank ONE TIME. That means you could have another NSF charge if it is returned again. If the payment was made through autopay we WILL NOT re-submit it to your bank.
If I payoff my loan within 120 days of disbursements, do I cancel my loan?
Within 120 days of the date your school disbursed your loan money (by crediting the loan money to your account at the school, by paying it directly to you, or both), you may return all or part of your loan to us. You do not have to pay interest or the loan fee on the part of your loan that you return within 120 days of the date that part of your loan is disbursed. If you received an up-front interest rebate on your loan, the rebate does not apply to the part of your loan that you return. Your loan will be adjusted to eliminate any interest, loan fee, and rebate amount that applies to the amount of the loan that you return.
I made a payment but I don't see it on my account.
Your payment may still be in transit. It is currently taking us 30 days to receive payments from your previous servicer. Once we receive the payment, it will be applied to your account.
I can't make my payments? What should I do?
We suggest that you contact us to discuss alternate payment arrangements if you would be able to make a smaller monthly payment. If you are entirely unable to pay, you may require for a deferment or forbearance. Please review the forms online to determine if you qualify.
What's the difference between forbearance and deferment?
Both a deferment and a forbearance postpone payments on your loans. During a deferment, the government will pay the interest on your subsidized loans. During a forbearance, interest will accrue on all of your loan types. One other difference is that deferment is an entitlement, so if you qualify for deferment you can receive it; forbearance is discretionary and is applied based on business decisions at CornerStone.
How long can I use a deferment/forbearance?
An unemployment deferment lasts for 6 month at a time. An economic hardship deferments last for 12 months at a time. You have an allotted 36 months of each type of deferment for your entire loan term. Forbearance is discretionary, and may last for up to 12 months at a time.
How do I postpone payments?
You may postpone your payments through deferment or forbearance. You can take the deferment/forbearance eligibility quiz by logging into Account Access, where you can apply online for forbearance and deferment. The forms are also available here or you may call us and request that the forms be mailed to you.
When will my account be reported to credit agencies?
We credit report accounts that are 60 or more days delinquent. We send these credit reports to the three bureaus at the end of every month. If you have missed a payment, please make arrangements to bring your account current as soon as possible.
Can a negative credit report be removed from my account?
If the negative reporting was valid and verifiable, the credit reporting cannot be removed.
Why are you still calling? I already sent the forms.
Billing & Interest Questions
How long before my payment is due does CornerStone send a bill?
All borrowers in repayment are sent a monthly bill. To make it easy to make a payment before your bill is due, we will send bills 21 days before the due date.
How long will it take to apply my payment once you receive it?
We will post your payment to your account within 24 - 48 hours after we have received it.
I don't want to get bills in the mail, how do I update my billing preferences?
Log into Account Access and go to Account Profile then click on Change Paperless Enrollment then select the checkboxes next to the information you'd like to receive electronically; read and click that you agree with the agreement; and click Update Paperless Enrollment. Once you've updated your information, you'll receive a confirmation e-mail. You can also make sure that your e-mail address is correct on the Account Profile page, take a minute to make sure it's correct because if it isn't you won't be able to get our e-mails.
What is Interest?
Interest is the cost of borrowing money. It is usually represented as a percentage of the principal balance (the amount you initially borrowed). For example, if your interest rate is 5% and you borrowed $100, when you pay back the $100 you will pay 5 additional dollars ($105 total) for the privilege of borrowing the money.
What type of interest will I pay on a student loan?
Student loans are simple interest which means that you pay interest only on the principal balance. As your principal balance is paid off less interest will accrue on your account.
How often does interest accrue on my account?
Interest accrues daily on your student loans.
What is an interest rate?
An interest rate is the percentage of money charged for its use. For example, if you borrowed $100 and then had to pay $5 as interest, the interest rate on that $100 is 5%.
What is the interest rate on my student loans?
How can I get my interest rate lowered?
You can reduce your interest rate by choosing to enroll in automatic payments. We reduce your interest rate by 0.25% if you choose to have your payments automatically withdrawn.
What is capitalization?
Capitalization is the addition of unpaid interest on a loan to the loan's principal balance. Basically, the unpaid interest becomes part of the principal balance.
When does capitalization occur?
Capitalization occurs when your loan goes into repayment. For example, if you had a forbearance on your loans and the forbearance ended, any interest that accrued while your loan was in forbearance will be capitalized.
What is an Endorser?
An endorser (or co-signer) agrees to repay the loan if the borrower does not. When a PLUS loan is denied due to the applicant’s adverse credit, the applicant (borrower) may get a credit-worthy endorser.
What is the difference between an endorser and a co-borrower?
Co-borrowers (or co-makers) are jointly responsible for repayment of a loan. Co-borrowers are present only on spousal consolidation loans. Endorsers (or co-signers) are only responsible to pay if the borrower does not. Endorsers are present only on PLUS loans. When a PLUS borrower cannot get a loan because of poor credit, he/she may find a credit-worthy endorser to “co-sign” on the loan.
Can I take a deduction on my taxes for capitalized interest and origination fees paid on my student loans?
In 2004, the IRS established new rules permitting tax deductions for capitalized interest paid by student loan borrowers. At the same time, the IRS also established rules permitting student loan borrowers to deduct a portion of any origination fees charged. You can find specific information about how to calculate the amount of capitalized interest and origination fees you may deduct by consulting IRS Publication 970 titled "Tax Benefits for Education," available on the IRS website located at www.irs.gov. Your tax advisor can also help you with this issue.
Can you send a letter to my mortgage company to show deferment?
Yes. We can create that letter and send it in one to two business days. We can mail it or fax it to your mortgage lender. You can also print a loan verification letter right now by logging into Account Access.
What is Consolidation?
Much like a consolidation loan for other types of debt, Federal Direct Loan customers can combine all of their student loans into one new loan that is guaranteed by the Department of Education. This allows customers to have their loans serviced in one place.
Should I consolidate?
There are several pros and cons to consolidation. Please review the following list before making a decision:
- All loans serviced in one place
- Extended terms (months ) to repay, which may result in a lower monthly payment
- More repayment options
- Expanded loan forgiveness options
- No origination fees
- Extended terms may increase the total amount of interest paid
- Loss of borrower-benefits (i.e. Interest discounts provided by your previous Guarantor)
- Loss of qualifying payments towards IDR forgiveness
- Loss of qualifying payments towards Public Service Loan Forgiveness (PSLF)
How do I consolidate?
You can apply online at StudentLoans.gov. If you are interested in consolidating your loans, you may do so online at StudentLoans.Gov. If you have been happy with the service you have received thus far, you have the opportunity to select CornerStone, among others, as your new servicer.
Where Will My Consolidation Application Be Processed?
The Department of Education has assigned Navient to originate and process all new consolidation loans for NFP’s (Not-For-Profits). Once your loan has been created, it will be transferred to the servicer you selected on your application.
Where Would I Send a Physical Application?
You can send all consolidation related paperwork to the following address:
c/o Navient LCP – E1140
PO Box 8005
Fishers IN 46038 – 8005
Where Can I get an Update on my Consolidation Process?
The Department of Education has selected Navient to originate and process any new Consolidation Loans for all NFP’s (Not-For-Profits). They can be reached by any of the following ways:
- Email: ED_Consolidation_Orig@navient.com
- Fax: (866) 233-8899
- Phone: (800) 722-1300
- Hours: Monday – Thursday 8 am – 9 pm ET and Friday 8 am – 8 pm ET
What is the Interest Rate on a Consolidation Loan?
The interest rate on a new consolidation loan is a fixed rate calculated from the weighted average of the loans you’re looking to consolidate. This rate is rounded to the next highest 1/8th of a percent, with a cap of 8.25%. The rate is fixed for the life of the loan.
When Will My Consolidated Loan Enter Repayment?
Consolidation Loans enter repayment once they have been transferred to your servicer. If you have any questions regarding your repayment options, please contact one of our Customer Service Representatives.