Perkins Loan Repayment

• Repaying your Loan
• Deferring your Loan
• Canceling your Loan
• Consolidating your Loan
• Debt Management

Educational Computer Systems, Inc (ECSI) is the loan servicer for the University of Puget Sound. You may check your loan status and manage your account information through ESCI on-line. Login to “My Account” by using School Code P3.

If you have additional questions about your loan, you may contact the Perkins Loan Office at 253.879.3466 or 253.879.3440 or by e-mail.

Your Rights and Responsibilities as a Borrower

As a Federal Perkins Loan borrower you have certain rights and responsibilities.  For a more detailed explanation of those rights and responsibilities please refer to your promissory note.

Repaying your Loan

When do I begin repaying my loan?
You will begin repayment nine months after you graduate, leave school, or drop to less than half-time student status.  You may choose to prepay the whole loan or any part of it at any time without penalty.

How do I get a repayment schedule?
Before you graduate (or if you drop below half-time attendance) you will need to complete a loan exit counseling session that provide information about how to manage your student loan after college.  The exit loan counseling session is available on-line through ECSI. Login to “My Account” by using School Code P3 and select "Exit Interview" to begin the exit loan counseling process.

How much will my payments be?
The interest rate on the Perkins Loan is five percent.  Your monthly payment will depend on the total amount you borrowed and the length of your repayment period.  The minimum payment amount is $40 per month.  Since there is a maximum 10 year repayment period, your monthly payments may be higher depending on the total amount you borrowed.  For help in estimating your monthly loan payment, you can use the on-line loan repayment calculator.

If you borrowed a Perkins Loan at another school you, may be entitled to have your loan payments pro-rated.  This means each school may be able to reduce your monthly payments based on the total amount you borrowed.  The maximum 10 year repayment period still applies and you will continue to make payments to each school.  Please contact the Perkins Loan Office if you have an outstanding loan with another school.

How will I be billed?
The University of Puget Sound is the lender for your Federal Perkins loan.  ECSI will send you an annual payment coupon book with monthly coupons.  You will send the corresponding coupon with each monthly payment.  You may also pay your loan each month through automatic withdrawal from your bank account. 

It is your responsibility to contact ECSI with any changes to your name, address, or phone number.  You can update this information online.

What if I am late making my payments?
“Default” occurs if you don’t make an installment payment when due or don’t comply with the promissory note’s other terms.  As a requirement of the federal government, all student loan activity is reported to the national credit bureaus on a monthly basis.  You will be charged a late fee on past due accounts at the rate of $1.00 per month.

What happens if I default?
The consequences of default are severe:

• The entire loan balance (principal and interest fees) can be immediately due and payable.
• You’ll lose your deferment options.
• You won’t be eligible for additional federal student aid.
• Your account might be turned over to a collection agency. If so, you’ll have to pay additional interest charges, late fees, collection costs, and possibly court costs and attorney fees.
• Your account will be reported to national credit bureaus, and your credit rating can be damaged. You might find it very difficult to receive other types of credit, such as credit cards, car loans, or mortgages. Because many landlords do credit checks, it might be hard to rent an apartment. Some employers check to see if you’re responsible by looking at your credit rating, so bad credit could even affect getting a job. On top of this, your default will remain on your credit report for up to 10 years.
• Your federal income tax refunds (and in some states, your state income tax refunds) might be withheld and applied toward your loan repayment.
• Your employer, at the request of the loan holder, may withhold (garnish) part of your wages.
• You might be unable to obtain a professional license in some states.

Do these sound serious? They are, so don’t let any of them happen to you!  Make sure to contact the Perkins Loan Office as soon as you think you might have trouble making payments.

Can a defaulted loan be rehabilitated?
You may rehabilitate a defaulted loan by making on-time monthly payments.  After you have made 12 consecutive monthly payments that are both reasonable and affordable, your defaulted loan will again be subject to the terms and conditions of your original promissory note and the default will be removed from your credit history.  You can rehabilitate a defaulted loan only once.

What if I am financially unable to make payments on my loan?
If you cannot make a scheduled payment, contact the Perkins Loan Office immediately.  Every effort will be made to work with you through a difficult financial period.

What if I have a problem with my loan?
If during repayment you develop a problem with your student loan, you should first attempt to resolve any complaints by contacting the Perkins Loan Office.  If you have made a reasonable effort to resolve the problem and it has not been successful, you may seek the assistance of the Federal Student Aid (FSA) Ombudsman of the Department of Education.  The Ombudsman’s office is a resource for borrowers to use when other approaches to resolving student loan problems have failed.  They may be contacted at 800.557.2575 or via their Web site.

Deferring your Loan

Under certain conditions you can receive a “deferment” on your loan.  During a deferment, you’re allowed to temporarily postpone payments on your loan without being charged interest. You must apply for a deferment by filing properly certified forms requesting deferment.  You can download forms from the ECSI Web site.

The deferments listed below apply to all Perkins Loan borrowers who received their loan on or after July 1, 1993.  Other deferments may also be available if you have an outstanding balance on a loan made before July 1, 1993.

Deferment Conditions:

• Half-time enrollment at a postsecondary school
• Study in an approved graduate fellowship program
• Study in an approved rehabilitation training program for the disabled
• Unable to find full-time employment
• Economic hardship
• Engage in the following services:
  • Teaching in low-income schools
  • Head Start staff member
  • Special Education teacher
  • Teaching math, science, foreign language, bilingual education or other fields designated as teacher shortage areas
  • Early Intervention
  • Child or family service agency
  • Nurse or medical technician
  • Law enforcement or corrections officer
  • Peace Corps volunteer
  • U.S. Armed Forces

Forbearance
If you can’t meet your repayment schedule but aren’t eligible for a deferment, you can receive a forbearance for a limited and specific period.  During forbearance, your payments are postponed or reduced, but interest continues to accrue and you are responsible for paying it.  You will need to provide documentation to show why you should be granted forbearance.

Canceling your Loan

You may have all or part of your Perkins Loan canceled for full-time employment in certain types of service, as long as your loan is not in default.  You must contact the Perkins Loan Office at the beginning of your service for the proper forms and specific criteria you must meet to request cancellation.

* As of October 7, 1998, all Perkins Loan borrowers are eligible for all cancellation benefits regardless of when the loan was made or the terms of the borrower’s promissory note.  However, this benefit is not retroactive to services performed before October 7, 1998.

Loan Cancellation for Teachers
Additional information on teaching service cancellation and deferment options can be found on the Federal Student Aid Web site.

U.S. Army Loan Repayment Program
Although it is not a cancellation, the U.S. Army offers a loan repayment program as an enlistment incentive.  If the borrower of a Federal Perkins Loan serves as an enlisted person in the U.S. Army, Army Reserves, or Army National Guard, the Department of Defense will repay a portion of the loan.  For more information, contact your local military recruiting office.

Consolidating your Loan

Check with your lender about loan consolidation.  Be aware that if you consolidate your Perkins Loan, you will forfeit cancellation and many deferment benefits.  Information about loan consolidation can be found at Northwest Education Loan Association (NELA).

Debt Management

The Layman’s Guide to Educational Debt Management is based on eight simple strategies for managing your student loan.

1. Know your Portfolio
Know not only what loans you have borrowed, but which loans are subsidized and which ones are unsubsidized. You should also know from whom you have borrowed your loans and, most importantly, who services them.  For information on the student loans that you have borrowed, visit Mapping Your Future.

2. Know the "Relative Cost" of Your Loans
Consider not only the interest rate (fixed vs variable), but the capitalization policies on your loans in order to determine which ones are costing you more.

3. Know Your Grace, Deferment, and Forbearance Options
These are the tools to help you manage your student loans.

4. Know Your Decision Points and Keep a Calendar
Be sure you know when you are required to file deferment or forbearance forms, as well as when you will need to select a repayment option.

5. Run the Numbers" Before Choosing Any Repayment Plan or Consolidation Option
Be sure you know not only the monthly payment amount, but the total repayment amount over the life of your loan(s) before selecting a repayment option, including consolidation.

6. Keep Good Records
Proper documentation now may help alleviate problems later.

7. Know When You Need Outside Professional Help
Understanding your student loans may only take you so far.  You may need the advice of a financial professional.

8. Know and Use Your Support Systems
No need to have a student loan in a delinquent or default status.  There are solutions!  Contact your lender for assistance.

You will find more information on financial planning at www.youcandealwithit.com.