There was quite a bit of confusion caused by an acquisition by ACS Education Services in late 2017, an acquisition which s also caused some uncertainty among borrowers whose existing student loan loans were serviced directly by ACS. If you had private or federal student loans serviced by the ACS, here s what you should know about paying off your school loans. The acquisition by the New York Central School District of acquiring the charter for the schools in NYC and the addition of charter schools in different areas of the school system was initially opposed by teachers unions and other school administrators. But after considerable discussion and deliberation, the New York State education department approved the acquisition. Here s what you should know about making the most of your New York City school loan repayment.
One option that borrowers with loans from the New York Central School District can consider is deferment. By deferring payments until such time as late spring or early fall – at which time the new Standard Plus Rate will be in effect for the selected loan – borrowers will avoid accruing more interest on their loans. This is important, as rising rates have been one of the causes of increasing New York City home foreclosures.
Another option available to borrowers who have Direct Deposits with their New York City school loans is the possibility of deferment for a designated period. This is particularly appealing to borrowers with good credit, since the interest rates for Direct Deposits are traditionally higher than those for conventional student loans. To qualify for a deferment, borrowers must meet certain requirements. They must demonstrate an ability to pay on time throughout the designated period. Borrowers must be enrolled in classes at the time of their application, and they must request deferment in writing to the lender.
One benefit of deferment is that it allows borrowers to consolidate their Direct Loans with their New York City school district’s Direct Loan program. In many cases, this is a much more attractive option than traditional consolidation of all of the borrower’s loans with the original creditors. This is because with Consolidation, the borrower no longer has to make monthly payments directly to the lender, but instead is sent a single payment every month. In addition, there are usually less fees and penalties attached to the consolidation process, making it an economically-sound decision for students and their parents.
For borrowers with Direct Loans, another option is the possibility of an interest rate reduction. Interest rate reduction is available to borrowers who ask for it, and interest rates are lower when offered. For students in the New York City public school system, it makes financial sense for them to request an interest rate reduction when they apply for new Direct Loans. This is because if they have stellar grades and dependable financial management, they will have little difficulty getting a competitive interest rate on their Direct Loans.
For students who have loans from the New York City school district, or who are planning to attend one of the New York City schools, they should look into the possibility of deferment. Deferment allows student borrowers to defer their Direct Loans until a later date. Depending on the financial aid office at the New York City schools, deferments can occur as late as thirty days to ninety days. There is no grace period associated with deferment, so when it is applied for it must be repaid. However, deferments can save a financially strapped student thousands of dollars in interest charges over the course of a college education.
Perhaps even more interesting than the interest rates and deferments available to students are the unique income-driven repayment plans that New York City schools offer. Income-driven repayment plans require students to agree to a monthly loan payment that is two percent lower than their usual monthly pay. For example, if a student earns two hundred thousand dollars in the fall of his first year and two hundred thousand dollars in the spring of his first year, the loan debt could be reduced by about twenty-five thousand dollars. These income-driven repayment plans can be good options for students who need the extra money but do not want to risk defaulting on their loans. The credit rating of the borrower does not affect the approval of the loan.
New York City area student loan servicing companies offer the flexibility to consolidate one’s Direct Loans into one account. Consolidation is a great option for students who may be experiencing cash flow problems due to a large number of loans and/or a high number of loans with different creditors. Certain Consolidation loans carry lower interest rates, which may be a better deal for students who are struggling to make their regular monthly payments. Consolidation loans may also be more affordable than some of the other options available to students who qualify for and obtain their Direct Loans.