Federal Stafford Loan FAQs
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The Student Aid and Fiscal Responsibility Act (SAFRA) was included in the health care reconciliation bill passed in the Spring of 2010. This Act eliminated the Federal Family Education Loan Program (FFELP) allowing borrowers to select private financial institutions as their “lender of choice” effective July 1, 2010. Please contact the financial aid office at your college or university to determine how the process for funding of Federal student loans is completed.
The credit union is committed to providing service to our current borrowers.
Click here to learn the Steps to Financial Aid Success.
Federal Stafford Loan Terms
Accrued Interest-interest that is accumulating on the principal balance of your unsubsidized federal student loans. We encourage you to pay as you can on accruing interest to avoid paying extra dollars in repayment.
Capitalized Interest-accrued interest that is combined with your original principal amount to create a new principal amount, resulting in paying interest on your accrued interest.We DO NOT capitalize interest during your in school or grace status. Any accrued interest is capalitized at the time your loan is sold or transferred by the secondary market servicer.
Guarantor or Guarantee Agency- a state or private non-profit agency that administers a student loan insurance program. The guarantor "insures" the loan for the lender. We have a working relationship with North Texas Higher Education Authority and Texas Guaranteed Student Loan Corporation (TGSLC).
Master Promissory Note-a legal document that obligates the borrower to repay a loan.
Secondary Market-a state or private agency that purchases Stafford and PLUS loans from a lender.
Servicer-a company that specializes in handling billing, collection, deferments, etc. on behalf of a lender or secondary market. We service and maintain your student loans, on site in College Station, until you approach repayment. At that time your loans my be sold to a secondary market or transferred to our third party servicer, Higher Education Servicing Corporation(HESC), to provide you with the highest level of service and repayment options available.
Questions and Answers
When is the interest due on my student loans?
Interest accrues on unsubsidized loans. If you have an unsubsidized loan you may make periodic payments if you choose, but payment is not required while you are still in school.
How do I make payments on my loans?
If the credit union still services your loans, payments may be mailed to the credit union or payment may be made in person. If your loans have been sold, payments must be made to the current servicer.
How do I get a student loan?
In order to apply for a Federal Stafford loan, you are required to fill out the Free Application for Federal Student Aid (FAFSA). The Department of Education will send you a Student Aid Report (SAR). Upon receipt of the SAR, you will need to determine whether your school requires you to submit the SAR to the financial aid department or if the Department of Education has forwarded a copy for you. The school then determines your eligibility and will send out an award letter. This letter will inform you of the types of grants and /or loans for which you are eligible. At this point, you will fill out any forms accompanying your award letter and return it to the school. The school will process your paperwork and certify all amounts and disbursement dates; and advise you of the funding process.
Why does the student loan department need my current address?
Your student loans are maintained on a separate database from your regular member accounts. These two systems do not interact in any way. It is important to keep your address current with the student loan department so that you do not fail to receive any information, which may affect your student loans.
Why can't I close my credit union account if I still have outstanding student loans?
The National Credit Union Administration (NCUA) has required the credit union to maintain regular member accounts for any student borrowers with outstanding student loans. The $5 balance must be maintained until all loans are sold to a secondary servicer. Once these loans are sold, you are free to close your account. However, maintaining your $5 savings account after you have graduated, will enable you to receive information on future loan promotions and the quarterly newsletter as well as continuing to earn interest.
I selected Greater TEXAS Federal or Aggieland Credit Union as the lender for my student loans, but now my loans have been sold to a secondary market. Why have my loans been sold and how can I reach them?
In the past, Greater TEXAS Federal and Aggieland Credit Union contracted with a secondary market institution to provide the best repayment options to its borrowers.
Please contact the Student Loan Department to determine where your loan(s) have been placed.
As a non-profit, financial cooperative, the credit union always looks out for our owner-member's best interest. Due to changes new legislation has created in the student loan industry, the credit union has re-evaluated our secondary market partnerships with Sallie Mae and NelNet (formerly LoanStar). To provide our members with the best possible service and superior benefits, the credit union will begin selling all student loans funded on or after October 1, 2007 to North Texas Higher Education Authority.
Is there a way I can look at my student loans on the Internet?
Yes. The Adventures in Education TGSLC's Student Loan Inquiry page allows you to access your student loans, who your lenders and/or servicers are, the status of your loans, and more. To look at your credit union loans online, go to www.aggielandsl.org.