Student loan counseling from Cambridge Credit Counseling

What the Session Covers#

Cambridge Credit Counseling’s student loan counseling helps with choosing or changing a repayment plan, lowering monthly payments, ending garnishments and tax levies, discussing forbearance or deferment, checking whether you may qualify for forgiveness or cancellation, and consolidating federal student loans. Cambridge Credit Counseling’s counselors also review your budget along with all the federal repayment plans you may qualify for.

Federal Loans Only#

Cambridge Credit Counseling’s student loan counseling does not cover private student loans. It assists only with the federal student loan repayment process.

Does Everyone Need Student Loan Counseling?#

Student loan counseling is not required to repay your student loans, but it can be a useful tool. Navigating the federal repayment options on your own can be difficult, and many people find the process overwhelming. A Cambridge Credit Counseling counselor can help you understand the terms of each available repayment plan, how much you would be required to pay and for how long, and when you should accelerate your plan to avoid paying excessive interest, so you can determine which repayment option works best for your situation.

Federal Options Are Available Directly Through Your Servicer#

Repayment plan changes, forbearance, deferment, forgiveness review, and consolidation are federal programs run by your loan servicer or the Department of Education. Applying for these federal options directly does not require paying anyone. If you have not made payments in years, Cambridge Credit Counseling’s counselors can help you design a budget to use the federal loan rehabilitation program, which can bring a loan out of default and end garnishments and tax refund seizures.

Teacher Loan Forgiveness#

You may be eligible to have as much as $17,500 of your subsidized or unsubsidized Direct or FFEL Program loans forgiven. To be eligible, you must:

• Be a new borrower with no outstanding balance on a Direct or FFEL Program loan as of October 1, 1998, or on the date you obtained a Direct or FFEL Program loan after October 1, 1998.
• Be a full-time teacher in a low-income elementary or secondary school, or educational service agency.
• Be a teacher in that school or agency for five consecutive years.

PLUS loans aren’t eligible for this option.

Student Loan Forbearance#

A forbearance is a temporary pause in your loan repayment: you won’t have to make a payment, or you can temporarily make a smaller payment. Some forbearance is limited (on a Perkins Loan, forbearance may not add up to more than three years, and on a Direct Loan disbursed on or after July 1, 2027, a general forbearance may not exceed 9 months within any 24-month period), so save it for when you really need it. During a forbearance you probably won’t be making any progress toward forgiveness or paying back your loan. As an alternative, consider income-driven repayment. Your payment on an income driven plan might be $10 or less.

You must continue making payments on your student loans until you have been notified that your request for forbearance has been granted. If you stop paying and your forbearance is not approved, your loans will become delinquent, and you may go into default. Most types of forbearance are not automatic. To apply, you identify which type of forbearance you’re requesting, fill out the form for that type, gather any documents needed to show that you meet its eligibility requirements, and send the form and documents to your federal student loan servicer.

Interest Accrues During a Forbearance

If you get a forbearance, you’re still responsible for the interest that accrues while you’re not making payments. After your forbearance ends, you’ll pay off your accrued interest through normal monthly payments. For most loan types, interest won’t capitalize at the end of a forbearance.

General Forbearance

Whether to grant a general forbearance is decided by the Department of Education for a Direct Loan, by the lender for an FFEL Program loan and by the school for a Perkins Loan, which is why it is sometimes called a “discretionary forbearance.” You can request one if you are temporarily unable to make your scheduled monthly loan payments because of poor health or other reasons acceptable to the Department of Education (for a Direct Loan), your lender (for an FFEL Program loan) or your school (for a Perkins Loan), such as financial difficulties, medical expenses or a change in employment. General forbearances are available for Direct Loans, Federal Family Education (FFEL) Program loans, and Perkins Loans. A general forbearance may be granted for up to 12 months at a time on an FFEL loan, a Perkins Loan or a Direct Loan disbursed before July 1, 2027. On a Perkins Loan, forbearance may not add up to more than three years in total; on a Direct Loan disbursed before July 1, 2027, a general forbearance can be renewed for as long as you still qualify.

Mandatory Forbearance

If you meet the eligibility requirements for a mandatory forbearance and you request it with the documents that show you qualify, it must be granted. Mandatory forbearances apply only to Direct Loans and FFEL Program loans and may be granted for no more than 12 months at a time. You may be eligible in the following circumstances:

• AmeriCorps
• Department of Defense Student Loan Repayment Program
• Medical or Dental Internship or Residency
• National Guard Duty
• Student Loan Debt Burden
• Teacher Loan Forgiveness

Forbearance rules are changing. For Direct Loans disbursed on or after July 1, 2027, a general forbearance is limited to 9 months within any 24-month period, instead of 12 months at a time renewable while you qualify, and economic hardship and unemployment deferments are not available for those loans.

Available in Every State#

Cambridge Credit Counseling offers student loan counseling in every state, with no state restrictions.

What It Costs If You Move Forward With Cambridge Credit Counseling#

If you decide to work with Cambridge Credit Counseling on your student loans, you pay a monthly fee of $49 or less, based on your budget, plus a success fee once your application is approved by your loan servicer or the Department of Education.

Cambridge Credit Counseling’s Broader Services#

Cambridge Credit Counseling is a nonprofit agency that also offers credit counseling, debt management plans, housing counseling, reverse mortgage counseling, and bankruptcy counseling. Its credit counseling is a free service for people struggling with credit card and other unsecured bills.

What to Do Next#

If you are behind on federal student loan payments or unsure which repayment plan fits your budget, you can call the Cambridge Credit Counseling Student Loan Counseling Division at (888) 661-7910 to talk through your options. Cambridge Credit Counseling also offers a free credit counseling session for people who are looking for ways out of debt more broadly.