Frequently Asked Questions

General

Where can I find information about my student loan(s)?
All federal student loan information can be found at Federal Student Aid, which is the central database for all federal loans administered by the U.S. Department of Education. FSA allows you to access information on federal loan and/or grant amounts, loan status (including outstanding balances), and the current loan holder(s).

If you have a private student loan(s), check the promissory note to find contact information for your lender(s). Then you can contact your lender(s) to request loan statements and other loan information.

What is the difference between a lender and a loan holder?
A lender is an individual or institution—such as a bank or a credit union—that provides loans, or borrowed funds. A loan holder is the institution that holds the title to a loan and is therefore entitled to seek repayment of the debt. The loan holder could be a lender, a guaranty agency or the U.S. Department of Education, depending upon the type of loan and how it was administered.

Lenders often transfer the title for a defaulted student loan to a guaranty agency or financial institution, which becomes the new loan holder. This institution will then attempt to recover the balance.

Who is ECMC?
Educational Credit Management Corporation (ECMC) is a nonprofit company with a mission to help students succeed. ECMC works to lower student loan default rates; sponsors college access and success initiatives, and financial literacy programs; and provides resources to support student loan borrowers to successfully repay their loans.

How is ECMC involved with my student loan(s)?
ECMC is a guarantor of federal student loans through the Federal Family Education Loan Program (FFELP) and provides support services to the federal government for student loan accounts that are in default or bankruptcy. (Please note: As of July 1, 2010, loans are no longer originated or disbursed through this program.)

Can I access my student loan information on this website?
Yes, if you borrowed a student loan(s) through the Federal Family Education Loan Program (FFELP) and ECMC guaranteed your loan(s), or if you know that ECMC is your loan holder. You can register to access your account information on our secure website. Once you register, you'll be able to view and manage your ECMC student loan account information online. Registration is free, so you can take advantage of the customized information and tools we provide you, as well as save any settings and review them later. Keep in mind, use of our website is subject to the Privacy Policy and Terms of Use.

Whom do I contact if I have questions about my student loan(s)?
You should always start with your lender(s) when you have questions about your student loan(s). To find your lender's contact information, refer to your promissory note or go to the Federal Student Aid (FSA) website, which is the central database for federal student loan information. Contact ECMC if you need additional help.

Student Loan Basics

When do I start repaying my loan(s)?
Your first payment is due when your grace period ends, which for most federal student loans is six months after you graduate, withdraw, or drop below half-time enrollment.

IMPORTANT NOTE: Under the Master Promissory Note, it is your responsibility to know when and where to send your payments—do not wait to receive a payment notice or statement to make your payment. If you wait for your lender(s) to contact you first, you may have already missed a payment.

If you do not know when and where to send your payment, go to the Federal Student Aid (FSA) website, the central database for federal student loan information. You will find contact information so you can call you lender(s) if you have any questions.

Can I get federal tax credit for paying tuition or interest on my student loan(s)?
You may be able to take advantage of a number of federal tax benefits, including credits, deductions and savings incentives to offset your costs for college or career training.

Also, you will find details on all the tax benefits at the Internal Revenue Service website www.irs.gov.

What if I can't afford to make my payments?
If you cannot afford the payment once it is due, you may work with your lender(s) to try to find a solution that works for you. Federal student loans offer several options, such as deferments and forbearances, as well as flexible income-driven repayment options. Find out more in our Repayment Options section.

If you do not know who your lender(s) is, go to the Federal Student Aid (FSA) website, the central database for federal student loan information. This website will provide you contact information for your lender(s).

Where can I get a complete summary of my loan(s)?
If you know who holds your federal student loan(s), you can contact each of those entities to receive a personal loan statement.

If you are unsure who holds your loan(s), visit the Federal Student Aid (FSA) website, which is the centralized database for federal student loans. If you have a private or state loan(s), you will need to locate your promissory note for that loan(s) or call your school for more information.

What is the difference between subsidized and unsubsidized loans?
With subsidized loans, the federal government pays the interest on the loans while you are in school, during your grace period and during any authorized periods of deferment. Examples of these types of loans include Perkins loans and subsidized Stafford loans.

In the case of unsubsidized loans, all the interest that accrues is your responsibility to pay. You have the choice of paying the interest quarterly or allowing the interest to accumulate until you enter repayment. Examples include PLUS loans and unsubsidized Stafford loans.

What's a deferment?
A deferment is an authorized period of time during which you may postpone monthly payments. Deferments are granted by the lender under specific circumstances, such as unemployment or returning to school. Use our Deferment Eligibility Checker to see whether you qualify for a deferment. You may also contact your lender(s) for help.

If you do not know who your lender(s) is, go to the Federal Student Aid (FSA) website, the central database for federal student loan information. For a private student loan(s), refer to your promissory note to find your lender's contact information.

What's a forbearance?
A forbearance is an authorized period of time during which a lender agrees to temporarily postpone payments or reduce your payment amount if you are experiencing short-term financial difficulties. Even though your payments are postponed, you will still be responsible for paying the interest that accrues on your loans, even on subsidized loans.

Can I pay all or part of my loan(s) before payments are due (prepay)?
Yes, you may prepay your loans in part or in full at any time without any prepayment penalty, regardless of your repayment plan. If you can afford it, prepaying your loans helps reduce the total cost of the loan.

Preventing Default

Why am I getting a letter(s) about my student loan(s) from a different organization(s)?
Your lender (whether a bank or credit union, school, or the U.S. Department of Education) provided you with the borrowed student loan funds. Many times a lender will employ a servicer to assist in managing a student loan account, which functions can include:

• Sending payment notifications
• Processing the paperwork on payments, deferments and forbearances
• Working with borrowers to determine the best repayment option

If you have missed payments, you may be hearing from organizations other than your lender(s) or servicer(s). Specifically, you may have received communication from the organization that guaranteed your federal student loan(s) to insure them against default—this could include a company like ECMC for Federal Family Education Loan Program (FFELP) loans, or the U.S. Department of Education for Direct Loan Program loans. It's also possible you have heard from a collection agency.

I've heard that being late on my student loan payments will affect my credit. How?
You are building a credit score through the repayment of your student loan(s). Your credit score is based on your financial history—the loan(s) you have, amounts you owe, on-time payments, etc. If you are consistently late on your student loan payments, this may be reflected on your credit report, including missed payments and default.

Can I lower my monthly payment to an amount that works better for my budget?
If you have not defaulted on your student loans, work with your servicer(s)/lender(s) to discuss available options. Your servicer(s)/lender(s) can work with you to develop a repayment strategy and help you find a repayment plan that will fit your individual financial needs.

If you are past due on your student loan(s), you will first need to bring your loan(s) current before you can change your repayment plan. This can be done by paying the past due amount or requesting deferment or forbearance, if applicable, to cover the past due payments.

If you do not know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, the central database for federal student loan information. You will find contact information for the servicer(s)/lender(s) of your federal student loans. If you have a private or state student loan(s), refer to the promissory note to find contact information for your lender(s).

Can I get federal tax credit for paying tuition or interest on my student loan?
You may be able to take advantage of a number of federal tax benefits, including credits, deductions and savings incentives to offset your costs for college or career training.

Also, you will find details on all the tax benefits at the Internal Revenue Service website www.irs.gov.

Where can I get a complete summary of my loan(s)?
If you know who holds your loan(s), contact each loan holder or servicer. If you are unsure who holds your loan(s), visit the Federal Student Aid (FSA) website, which is the centralized database for federal student loans. If you have private or state loans, you will need to locate your promissory note or call your school for contact information.

Should I consolidate my federal loan(s)?
With a Direct Consolidation Loan, you bundle one or more eligible federal loans—such as Stafford, Perkins or consolidation loans—into a new loan with new repayment terms. Some common reasons to consolidate your loan(s) are to:

• Reduce multiple student loan payments into one single payment
• Lower the interest rate (this is not guaranteed—interest could stay the same or even increase)
• Lower your monthly payment

See our Loan Consolidation section for more information.

To determine if consolidation is right for you, contact your servicer(s)/lender(s). They can help you understand the pros and cons of consolidation as it relates to your situation. If you do not know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, the central database for federal student loan information. This website will have contact information for your lender(s).

What can I expect my servicer(s)/lender(s) to do for me?
Your servicer(s)/lender(s) is there to help you, whether to explain your options or to make adjustments to your account as needed. You should know the difference between what your servicer(s)/lender(s) is required to do for you by law and what your servicer(s)/lender(s) is not required to do.

Your servicer(s)/lender(s) is required to honor your grace period, during which time you are not obligated to make loan payments. If you meet the eligibility requirements of a deferment—because you're in school or unemployed, for example—your servicer(s)/lender(s) is required to give it to you. If you qualify for a mandatory forbearance, your lender must grant it to you.

However, even if you qualify for a deferment or forbearance, you may still need to apply. Your servicer(s)/lender(s) won't necessarily grant you a deferment or forbearance unless you request it. Additionally, your servicer(s)/lender(s) is not required to grant you a forbearance for reasons of financial hardship if your situation does not meet their criteria. Finally, while you may ask your servicer(s)/lender(s) to change your due dates or give you a discount for setting up automatic payments, your servicer(s)/lender(s) is not required to honor either request.

For more information, visit our Working With Student Loan Servicers.

Resolving Default

How do I know if my federal student loan(s) is in default?
You might have received a Notice of Default. Perhaps your federal tax refund was seized, or wages were withheld from your paycheck—any of these actions toward you indicate that your loan(s) is in default. Your loan holder(s) can tell you the status of your loans and help you understand your options if you are in default.

If ECMC holds your loan(s), Contact Us. If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

I was told my loan(s) is in default, but I think it's a mistake. What should I do?
If you believe your student loan(s) is not in default, contact your loan holder(s). You may be required to provide documentation or evidence of the discrepancy. This could include school records showing your enrollment status, a copy of an authorized deferment or forbearance, or front and back copies of loan payment checks that have been canceled and you believe were not applied to your loan balance.

If ECMC holds your loan(s), Contact Us. If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

Why were wages withheld from my paycheck?
Administrative wage garnishment—funds deducted from your paycheck without your consent—is permitted by law if you default on your federal student loan(s). If you do not make voluntary payments on your defaulted federal student loan(s), the administrative wage garnishment process may be initiated. Prior to the wage withholding becoming affective, you should have received a letter—Notice Prior to Wage Withholding—describing the process.

Are there any additional costs to my loan(s) after it defaults?
Yes. Unpaid interest that accrued on your loan(s) prior to the default is capitalized (added to the principal balance of the loans), creating a situation in which you are charged interest on a higher principal balance. Also, as required by federal regulations, collection costs are added to your defaulted loan balance 60 days after default. Collection costs may include attorney fees, collection agency charges and court costs.

Why is a collection agency calling me about my defaulted loan(s)?
You are being contacted by a collection agency because you have not made satisfactory arrangements to repay your defaulted student loan(s). Being contacted by a collection agency is one of the consequences of default.

Contact the collection agency or your loan holder(s) to discuss your options.

If ECMC holds your loan(s), Contact Us. If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

Why was my tax refund and/or Social Security payment seized? Can I get it back?
If you default on your student loan(s) and do not make arrangements to pay it back, federal regulations require that any government payments for which you are eligible be seized and applied to your loan debt. This is commonly called offset or tax offset, but it could also be called IRS offset or Treasury offset.

You may apply for a refund or return of these funds if the offset:

• Was done in error
• Is causing you extreme financial hardship
• Occurred while you were in bankruptcy

Contact your loan holder(s) to discuss your situation. If ECMC holds your loan(s), follow the links below for more information if you are:

• Experiencing Extreme Financial Hardship
• In Bankruptcy

If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

I want to go back to school, but my loan(s) is in default. Can I get Title VI federal financial aid?
If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

Once you have resolved your default status with your loan holder(s), your school may request additional documentation from your loan holder(s) commonly referred to as a Title IV eligibility letter or clearance letter. If ECMC holds your loan(s), you can Request a Title IV Eligibility Letter or contacting an ECMC representative at 855-810-4920.

Will my defaulted federal student loan(s) be reported?
Loan holders are required to report federal student loan defaults to the national consumer reporting agencies. A default on your credit history may remain for up to seven years.

Can I get federal tax credit for paying tuition or interest on my federal student loan(s)?
You may be able to take advantage of a number of federal tax benefits, including credits, deductions and savings incentives to offset your costs for college or career training.

Also, you will find details on all the tax benefits at the Internal Revenue Service website www.irs.gov.

What is a credit bureau?
A credit bureau is a national consumer reporting agency. It is any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses and means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. 15 U.S.C. § 1681a(f).

What is a credit report?
A credit bureau report is a consumer report under the Fair Credit Reporting Act. It is any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for:

• Credit or insurance to be used primarily for persona, family, or household purposes;
• Employment purposes; or
• Any other purpose authorized under section 1681b of the Fair Credit Reporting Act. 15 U.S.C. § 1681a(d).

I was turned down for a loan because of student loan default. How can I fix this?
You need to contact your loan holder(s) to determine if there are options to resolve the default. The status of other items on your consumer report may have contributed to the decision. Obtain a free copy of your consumer report at www.annualcreditreport.com.

If ECMC holds your loan(s), Contact Us. If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

How do I correct mistakes on my consumer report?
You can dispute any entry on a consumer report by filing a dispute with the national consumer reporting agencies.

• Equifax
• Experian
• TransUnion
• Innovis, Inc.

You may also dispute the item directly through the company that provided the information to the national consumer reporting agencies.

If ECMC holds your loan(s), Contact Us. If you don't know who holds your loan(s), go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

Bankruptcy

What happens to my student loan(s) if I file for bankruptcy?
While in bankruptcy, you are protected from collection activities on most your of your debts, including student loans. During the bankruptcy process your loans will continue to accrue interest, increasing your loan balance if no payments are made. Remember, student loans are not dischargeable (included in your general bankruptcy discharge), absent a finding of undue hardship. Congress intended that discharge for undue hardship be reserved for individuals facing more than the financial hardship that accompanies all bankruptcies. So a separate adversary proceeding within a bankruptcy is required for you to prove to the bankruptcy court that your situation meets the undue hardship standard. Accordingly, unless a bankruptcy judge grants you an undue hardship discharge of your student loan(s), you will still have to pay back your student loan(s) after bankruptcy.

What does dischargeable mean?
When you file for bankruptcy, certain debts, called "dischargeable" debts, are forgiven when you obtain your bankruptcy discharge order. A discharge order permanently prevents creditors (people you owe money to) from taking any action to collect on such discharged debts. Remember, student loans are not dischargeable debts absent proving undue hardship in an adversary proceeding.

I was told my student loan(s) is not dischargeable debt, what does that mean?
A nondischargeable debt is a debt that is not forgiven as part of your bankruptcy. So you are required to repay it when the bankruptcy is complete. Examples of debts that may be nondischargeable include taxes, student loans and child support. If the bankruptcy court does not determine your student loan(s) is dischargeable, you will have to repay it after bankruptcy. Remember, student loans are not dischargeable debts absent proving undue hardship in an adversary proceeding.

Is there anything I can do to get my student loan(s) to be a dischargeable debt?
You can file a separate "adversary proceeding" with the bankruptcy court. The purpose of the adversary proceeding is to prove "undue hardship." Please consult with a bankruptcy attorney to discuss your options. Learn more

How do I prove undue hardship on my student loan(s)?
To prove undue hardship, you must file a separate adversary proceeding with the bankruptcy court explaining your situation and why repayment of your student loan(s) would be an undue hardship. Please consult with a bankruptcy attorney to discuss your options. Learn more

Do I need to authorize ECMC to talk to someone other than myself about my bankruptcy case?
No. However, if you wish ECMC to discuss your private information to someone other than you or your attorney, we will need you to complete and sign an Authorization giving your consent. Send the form directly to ECMC. Mail the form to:

ECMC
P.O. Box 16408
St. Paul, MN 55116-0408

Why should I make payments on my student loan(s) during bankruptcy if I don't have to?
Interest on a student loan(s) continues to accrue on your loan balance during bankruptcy. Please consult with your bankruptcy attorney to discuss your options. Learn more

If my tax refund was seized, but I filed bankruptcy, can I get my refund back?
If you defaulted on your student loan(s) because you failed to make payments over a 270-day period, your state and federal tax refunds can be withheld (referred to as an offset) to pay back your student loan(s). If you filed for bankruptcy prior to the offset, you may be able to get the money returned to you. Learn more

What is Chapter 7 bankruptcy?
In Chapter 7 bankruptcy, your nonexempt assets may be liquidated (sold), to pay your creditors. Unsecured debt, like credit card debt, is usually discharged in the bankruptcy. Remember, student loans are not automatically discharged under your general bankruptcy discharge order. So, unless you file an adversary proceeding in which the bankruptcy court concludes you met the undue hardship standard, your student loan(s) will remain a debt you must repay following bankruptcy.

What is Chapter 13 bankruptcy?
A Chapter 13 bankruptcy does not liquidate your assets, but it does require you to repay all or a portion of your debts in installments specified by a court-approved bankruptcy plan.

If you successfully complete your Chapter 13 bankruptcy plan, the court discharges most or all of your remaining unsecured debt. Remember, like a Chapter 7, your student loan(s) is not automatically discharged under your Chapter 13 general bankruptcy discharge order. So, unless you file an adversary proceeding in which the bankruptcy court concludes you met the undue hardship standard, your student loan(s) will remain a debt you must repay following bankruptcy.

What is a Chapter 13 bankruptcy plan?
A Chapter 13 bankruptcy plan is a reorganization plan detailing how you will pay some or all of your creditors. A typical Chapter 13 plan lasts three or five years, during which you make monthly payments to a court-appointed representatives, called a trustee, under a court-approved plan of reorganization. That trustee distributes plan payments to your creditors as scheduled in your Chapter 13 bankruptcy plan.