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Help for Hurricane-Affected Student Loan Borrowers

By U.S. News & World Report

After staying in a hotel for a week because Hurricane Harvey flooded her Texas hometown, Patience Wieland was relieved to find out that her student loan servicer had placed her monthly payments on hold.

Some lenders, including the Department of Education’s student loan service providers, are offering hurricane-affected borrowers forbearance as a short-term form of financial relief. Forbearance allows borrowers to either stop making payments temporarily or reduce a monthly payment on a short-term basis.

“I found it refreshing that the federal loan programs automatically arranged a month’s forbearance for hurricane-damaged areas like Houston for my loan,” says Wieland, from Friendswood, Texas, where many residential homes flooded. “I didn’t have to call. I received an email and a paper notice from my student loan service provider Great Lakes.”

Wieland says the service provider must have enacted the payment option based on her ZIP code.

“Forbearance extended my loan a little. And I’ll pay a little more interest, but it also means one less thing to worry about when other people’s needs are more pressing,” says Wieland, who has several friends and neighbors with a long recovery ahead of them.

Learn three ways a [student loan could be discharged.]

The Department of Education gives student loan borrowers who are impacted by recent hurricanes a couple of financial support options, such as forbearance and ceasing collections.

“Borrowers in impacted areas are provided forbearances upon request for up to 90 days. In the event a borrower is or becomes delinquent, we will automatically place them on a forbearance and make it retroactive to before the delinquency, and place it on their account for up to 30 days,” a Department of Education spokesperson said via email.

While the natural disaster-related forbearance option is not new to federal student loans, the government was more proactive about communicating this protection to borrowers after Harvey, says Jovan Hackley, a spokesman from Student Loan Genius, an Austin-based student loan benefits provider. “These protections for federal loan borrowers have been in place for some time.”

For borrowers in impacted areas who are in default, the Department of Education said in an email to U.S. News that collection activities will cease upon request.

Borrowers can request forbearance or to stop collection activities on a federal student loan via the web or — for those without internet access — phone.

Discover eight [facts about direct student loan consolidation.]

And it isn’t just the Department of Education that is offering relief for student loan borrowers. A few major banks — such as Wells Fargo, JPMorgan Chase & Co. and Bank of America, to name a few — as well as other private lenders are offering payment relief options to affected customers.

“Many providers like College Ave Student Loans may already have taken steps to assist you or will be ready to work with you during this difficult time,” said Joe DePaulo, CEO and cofounder of College Ave Student Loans.

But Hackley cautions hurricane-affected borrowers to only request forbearance if they need it, because interest still accrues on the loan balance, even if the pending payment has been halted temporarily.

“Forbearance stops the payment but doesn’t stop the interest accrual and doesn’t lower your balance. Those payments will have to be made eventually, and that interest adds up over time,” he says.

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

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Help for Hurricane-Affected Student Loan Borrowers originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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