Frequently Asked Questions

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Federal Loan Repayment

What should I do if I'm having trouble making my monthly payments?

Federal loans have a variety of options available—you may be eligible for repayment options that could lower your monthly loan payment, or you could qualify for a deferment or forbearance.

We're here to help! Call us at 800-798-8722 to discuss your situation and the options that may be available to you!

If your loans are in a default status, please contact the Collections Department at 800-954-2440.

Learn more about student loan repayment options >

Learn more about loan deferment & forbearance >

What is a deferment?

A deferment is a postponement of payment that's available when you meet specific criteria. There are several different types of deferment. Deferment criteria are based on federal regulations.

Loans in a default status are not eligible for this option. 

Learn more about loan deferment >

What is a forbearance?

Forbearance is a short-term, temporary suspension of your payments. Forbearance is intended to help you if you're having temporary financial difficulty and do not qualify for a deferment.

Loans in a default status are not eligible for this option. 

Learn more about loan forbearance >

Which is the better choice—a deferment or a forbearance?

It depends on your individual situation. Typically a deferment is the better choice if you have subsidized loans because the federal government will pay the interest that accumulates during the deferment period. With a forbearance, there is no interest subsidy.  

Another major difference between a deferment and a forbearance is that a deferment is automatically granted (if you qualify), whereas a forbearance is granted at the servicer’s discretion.

Learn more about loan deferment & forbearance >

Do I have to continue making loan payments while I'm in the process of applying for a deferment?

Yes, unless you've applied for and been granted a forbearance to cover the payments that will come due while you're in the process of applying. Continuing to make payments will help protect your credit. We'll notify you, in writing, when your request has been approved.

What if my loan(s) is in deferment and my situation changes?

Call us at 800-798-8722 so we can make sure you're in the best option based on your new circumstances!

How do I renew a deferment or forbearance?

To determine whether you're eligible to renew your deferment or forbearance, call us at 800-798-8722.

What happens to the interest on my loan(s) during a deferment or forbearance?

During a deferment, if your loan(s) is subsidized, the federal government will pay the interest that accumulates during the deferment period. If your loan(s) is unsubsidized, you're responsible for the interest that accumulates during the deferment period.

During a forbearance, you're responsible for the interest that accumulates on both your subsidized and unsubsidized loans.

Any interest that's unpaid at the end of the deferment or forbearance period will be added to your principal balance. This increases your principal balance, and you’ll pay more interest in the long run. As a result, your regular monthly payment may need to increase after your deferment or forbearance ends so the loan can be paid off in the term you have remaining. You can prevent, or minimize, this by making payments toward the accumulating interest during the deferment or forbearance period.

Is my credit rating affected while my loan(s) is in a deferment or forbearance?

We report your loans to the national credit bureaus every month regardless of the status of your loan(s). Keep in mind that a loan that's past due is reported as past due regardless of a pending deferment or forbearance, so you should continue to make payments on your loan(s) until we notify you that your request has been approved.

Even if your deferment or forbearance is approved, it won’t remove any past due payments reported to the credit bureaus while we were waiting to receive and process your application.

Learn more about how credit reporting works >

I'm already past due on my loan(s). Can I still apply for a deferment or forbearance? What should I do?

Yes, you can still apply for a deferment or forbearance unless you're in default.

If your loans are in a default status, please contact the Collections Department at 800-954-2440.

Learn more about loan deferment & forbearance >

What is default?

Default typically occurs when you consistently fail to make your payments for a specified period of time during the repayment period. But we 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 us.

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
How will I know if my deferment or forbearance application is approved?

We'll send you confirmation, in writing, once your application has been received and approved. It can take up to 5 to 7 business days for us to process once we receive your application.

I just graduated and I’m now due for my monthly loan payment. Don’t I get a 6-month grace period?

Stafford loans have a one-time, 6-month grace period. If you return to school at least half-time after using the full grace period, you'll be placed in a school deferment so you aren’t required to make payments while you're enrolled. However, once you drop below half-time, you'll become due for your regular monthly payments.

If you can’t make payments, contact us to discuss your options! You can reach us at 800-798-8722.

Is there anything I can do to reduce the interest rate?

Interest rates for federal student loans are determined by federal law. While there isn’t a way to change your contractual interest rate, you can pay less interest by making extra payments and/or sending payments even when payments aren’t due.

Am I eligible for loan forgiveness?

Loan forgiveness is reserved for very specific situations. A few examples include working full-time in a qualifying public service job or teachers working full-time in a low-income community.

You can learn more by visiting our Loan Consolidation & Forgiveness page.

What is Public Service Loan Forgiveness? How do I apply?

Public Service Loan Forgiveness is a program that forgives any remaining balance on Direct loans after you've made 120 qualifying payments in a qualifying repayment plan while employed full-time for a qualifying employer.

If your federal loans are part of the Federal Family Education Loan (FFEL) Program (which is what they are if they are with VSAC), you must consolidate them into a Direct Consolidation Loan. Keep in mind that only payments made on the new consolidation will count towards forgiveness; the payments made prior to consolidating into a Direct Consolidation Loan will not count.

You can learn more about Public Service Loan Forgiveness at studentaid.ed.gov.

How do I consolidate?

Federal loan consolidation is done directly through the Department of Education.

To learn more about eligibility, benefits, drawbacks, and how to apply, visit our Loan Consolidation & Forgiveness page.

I was reported to the credit bureaus as past due. Can the late reporting be removed now that the account is current?

Unfortunately, late reportings that were reported accurately cannot be removed. However, if you keep your account current, we'll be able to report you as current moving forward.

How do I fill out the Income Driven Repayment plan application?

You can find information on how to apply on our Income-Based Repayment page. We're also happy to walk you through the application; just call us at 800-798-8722 to reach a counselor!   

I can’t download an application. What should I do?

You'll need Adobe Reader to download and view applications. Visit www.adobe.com to download the free Adobe Reader software.

Do you accept electronic signatures on your applications?

We require a handwritten signature—which can include a digitally drawn signature—for all repayment option applications.