Federal Perkins Loan Program

Introduction

The basic campus-based loan fund at HSU is the Federal Perkins program. The Federal Perkins (formerly known as Perkins/Direct and NDSL) fund is federally subsidized. It is administered by the campus, in compliance with regulations established and monitored by the U.S. Department of Education. Our continued participation in this program is dependent upon maintaining a low default rate and following the collection procedures required by the U.S. Department of Education.

Interest is computed at the rate of five percent (5%) per annum simple interest on the unpaid balance. No interest accrues while a student is enrolled in at least six (6) or more units, and during periods of grace or deferments. There are special provisions for cancellation of the loans when employed in certain professions.

The Financial Aid Office is responsible for determining eligibility and awarding loans for the Perkins Loan Program. Student Financial Services personnel are responsible for disbursing the loans, counseling the borrower regarding the obligations of the loan, and collecting when the loan enters repayment.

Repayment

The student loan program is very valuable for students struggling to meet the ever-increasing costs of pursuing a college education. Perkins Loans are available for currently enrolled students because former students have repaid their loans. If a loan is not repaid, a future student will not have the same benefit. The ability of the Financial Aid Office to keep future loan commitments depends on you keeping the commitment you make when you sign your student loan promissory note.

A loan is a serious obligation. In accepting a Perkins Loan, you also accept the obligation of repayment as stated in the Promissory Note. Loan funds are to be used only for educational expenses.

When you receive a Perkins Loan, you are required to meet with Student Financial Services personnel for each advance. At that time, they will quickly review the terms of the loan and answer questions.

Who to Contact

If you have any questions regarding your Federal Perkins Loan or need to complete an Exit Interview, please call a collection counselor at (707) 826-4407.

Exit Interviews

An exit interview is a federal requirement of the Perkins Loan Program. An exit interview must be scheduled if you do any of the following:

Take less than 6 units in a semester.
Take a leave of absence (even if for only one semester).
Withdraw from school.
Transfer to another school.
Graduate -- at the end of the semester in which you graduate.

When Do I Begin Repayment?

As stated in the Promissory Note, you will receive a nine (9) month grace period that begins after you are no longer registered at least half-time at HSU. During that grace period, no interest will accrue. Payments are due monthly. After the grace period has ended, you will accrue one (1) month of interest before your first payment is due.

Your minimum loan payment will be calculated according to your promissory note. Presently, the minimum monthly payment is $40.00 on a Federal Perkins loan. This amount is based on the terms of the promissory note that you signed. Older promissory notes may have different amounts. Please refer to your promissory note to verify the amount that pertains to you. Remember this is a minimum payment. Your payment may be larger depending on the amount you borrow. There is a maximum repayment period of ten (10) years.

There are no prepayment penalties on your student loan.

Who is ECSI?

ECSI (Educational Computer Systems, Incorporated) provides billing services for the HSU Perkins Loan Program. When you receive a Perkins Loan, information about your loan is transferred to ECSI. Upon entering repayment, you will receive bills from ECSI as scheduled and should make payments directly to them. They will credit your account and notify the university. ECSI also receives and processes changes of address and student deferment/cancellation forms.

Student Financial Services personnel at HSU are in daily contact with ECSI and have online access to loan information. They also maintain individual files of correspondence, Promissory Notes, and record of any special activities. Should you have questions regarding your billing or a problem with your payment schedule, please contact Student Financial Services at HSU, not ECSI. Although you will be sending your payment to ECSI, the money is owed to HSU. Only HSU can make special arrangements with you.

What Types of Deferments are Available?

You may defer or delay the repayment of your loan for a defined period of time. The following types of deferments are available depending on when you received your Perkins Loan. You can obtain a copy of the Request for Deferment form by downloading it from the ECSI forms page.

In School -- at least a half-time student
Graduate Fellowship
Rehabilitation Training
Residency in Dentistry
Unemployment
Economic Hardship
Forbearance
Hardship
Military, Peace Corps or VISTA
Volunteer Service
Temporary, Total Disability (Borrower, spouse or dependent)
Internship/Residency Program

What Types of Cancellations are Available?

You may cancel all or a portion of your loan over a period of time depending on when you received your Perkins Loan. You can obtain a copy of the Request for Cancellation form by downloading it from the ECSI forms page.

Teacher in a qualified elementary or secondary school
Special Education Teacher
Headstart Staff Member
Peace Corps/VISTA Volunteer
Law Enforcement
Medical Technician/Nurse
Work with High Risk Children
Early Intervention Services
Child and Family Services

If you have any questions, contact a collection counselor at (707) 826-4407.

How Do I Maintain a Good Credit Record?

For most students, a Perkins Loan is the first experience with credit. Student loans can be an excellent way to establish a good credit rating. Pay your loan promptly each month or quarter. Here are some tips on establishing good credit:

Notify Student Financial Services collection personnel or ECSI of any change of address or name.
Send the payment due each month or quarter even if you do not receive a bill. Send extra payments to reduce your total interest when you can.
If you are eligible for any of the aforementioned deferments or cancellations, file the appropriate form on or before your payment due date.
Always call Student Financial Services collection personnel at HSU if you have a question or problem.
Never ignore correspondence or payment requests, no matter what the circumstances.

What is a Federal Consolidation Loan?

Consolidation Loans offer you the opportunity to combine different types of federal student loans. Consolidation is an option that will simplify your repayment. If you have a William D. Ford Direct Loan with Stafford and/or Perkins Loans you can currently consolidate through the Department of Education by contacting the USDE Consolidation Loan Information Center online, or by calling 1-800-557-7392.

What If I Have Problems Repaying My Loan?

If you have a problem making scheduled payments on your loan, contact Student Financial Services immediately. A collection counselor will work with you to help you avoid the costs and adverse consequences of delinquency and having your loan classified as in default. Deferment and forbearance are options that can help you avoid default and maintain a positive credit history.

What Happens If I Do Not Repay My Loan?

The federal due diligence requirements for collection of Federal Perkins Loans have become increasingly strict. If you ignore bills or move without notifying Student Financial Services or ECSI, the following steps will be taken:

Transcript Hold
A hold will be placed on your transcripts and any future re-admission to HSU. This hold will not be released until the past-due portion of your loan is cleared.
Late Fees
If your account goes more than thirty (30) days past due, you will be assessed late fees. A late charge, not to exceed twenty percent (20%) of the scheduled payment, will be imposed.
Credit Reporting
When you apply for credit of any kind, the potential creditor usually checks your credit record through a credit reporting service. A delinquent student loan on that record will be an obstacle to your obtaining a home loan, car loan, credit card, or any other form of credit. Even when you clear the delinquency, the fact that the loan was once delinquent will remain on your credit report.
State Offset Program
This is a program that automatically offsets a taxpayer's state personal income tax refund and/or lottery winnings if the taxpayer owes the university a debt.
Referral to a Collection Agency
The regulations that govern the student loan program require that California State Universities refer to an outside collection agency any past-due borrower who has not responded to our internal collection efforts. Collection agencies are in the business of pursuing collections vigorously and aggressively. If the circumstances warrant, they will proceed with litigation. You may be responsible for all court costs, attorney fees, and collection costs, in addition to the entire unpaid principal balance plus interest. A court judgment on your credit record is detrimental to both your career and private life. Your wages may be garnished and your credit report will be affected. In addition, you must pay all the costs of the collection agency. The fee the collection agency charges to collect this delinquent debt is known as the collection cost or contingency fee.
Acceleration
Your promissory note includes an acceleration clause. This means that the university can declare the entire unpaid balance of your loan due and payable even if only one payment is late.
Assignment to the Department of Education
The Department of Education recommends that we assign all Federal Perkins Loans in default to the federal government. Once this assignment takes place, you owe the debt directly to the U.S. Treasury. The federal government has hired special agencies to collect on these defaulted loans. Once the university has assigned your loan, you must deal with the federal government or their agents exclusively. Although you will still have to repay the loan, the money you pay to the federal government is not returned to HSU to be used by other students.

Don't let any of these happen to you!

Remember, if you have a problem making your payments, call Student Financial Services at (707) 826-4407. Our collection staff will work with you to help you avoid default.