Default Prevention Plan

Latin Beauty Academy is committed to assisting and educates students and parents about their loan repayment obligation, encouraging them for getting a successful repayment, and prevents delinquent repayment. Our institution employs evaluation, prevention, and outreach activities to work in advance to reduce the risk of default by our borrowers. The Institution’s Default Prevention Plan will allow to our school, as needed, in managing our cohort default rates. Our institution in this matter is focused on implement effective and easy tools that reduce defaults, promote student and school success, help preserve the integrity of the loan programs, and reduce costs to taxpayers are available to our school.

The objectives for our Institution’s Default Prevention Plan are:
* Identify the factors causing the default rate to exceed the threshold
* Establish measureable objectives and the steps the institution will take to improve its cohort default rate
* Specify the actions the institution will take to improve student loan repayment
Default Prevention and Management Plan
This Default Prevention and Management Plan provides to our institution with activities, techniques, and tools to promote student and parents success and reduce student loan defaults in the Federal Family Education Loan (FFEL) and William D. Ford Federal Direct Loan (Direct Loan) programs. As requirement, our institution has adopted a default prevention and management plan following regulatory guidance including: entrance counseling and exit counseling for borrowers, reporting timely and accurate enrollment information to the U.S. Department of Education (the Department), and sharing satisfactory academic progress information across campus.
Benefits of Adopting a Default Prevention and Management Plan
Default Prevention and Management Plan promotes student and school success by increasing retention and reducing delinquency and default. Our institution and students receive benefits when we implement the activities, techniques, and tools outlined in this plan. The benefit for our institution is avoiding any limitations on participation in the loan programs due to excessive cohort default rates (CDRs). Students benefit by having continued access to Title IV Student Financial Assistance Programs, learning good debt management practices, and establishing a healthy credit history. As our school is actively committed to promoting student success, we guarantee an excellent students learning process, graduation, obtain employment, and demonstrate financial responsibility through repayment of the funds borrowed to finance their education.
Consequences of Default for Borrowers
Latin Beauty Academy is responsible that our student borrowers understand who default on student loans face serious consequences. Stafford Loans are considered in default after 270 days without payments. At the time of default, outstanding interest is capitalized and collection fees may be added, resulting in a loan balance that is higher than the amount borrowed. Defaulted loans are reported to credit bureaus, causing borrowers to sustain long-term damage to their credit rating. Defaulters may also face difficulty in securing mortgages or car loans, may have their wages garnished, and their federal income tax refunds and other federal payments seized. Until the default is resolved, collection efforts continue and the defaulter will be ineligible for additional federal student aid.
Consequences of Default for Schools
Latin Beauty Academy understands that a default for our schools implies serious consequences due to high CDRs. Consequences include the loss of participation in the FFEL, Direct Loan, and/or Pell Grant programs. Schools may also be provisionally certified.
Early Stages of Enrollment
Latin Beauty Academy and borrowers are benefited with the implementation of our default prevention and management activities. Our school can undertake these required and recommended activities to make up a default prevention and management plan as early as during student enrollment in order to reduce the incidence of default.
Entrance Counseling
Latin Beauty Academy requires that first time borrowers of FFEL and Direct Loan program loans receive entrance counseling. During entrance counseling, our institution explain how the master promissory note works, emphasize the importance of repaying the loan, describe the consequences of default, and show borrowers sample monthly repayment amounts based on their program of study at our school. Our school enhances entrance counseling to include financial literacy and ensure that borrowers thoroughly understand all information. In addition, our school collects as much contact information about borrowers as possible during entrance counseling to facilitate future contact if needed. These activities ensure more knowledgeable, responsible borrowers, and result in fewer defaulters as well.
Financial Literacy for Borrowers
As recommended by the Department of Education, our school provides borrowers with information concerning the income potential of occupations relevant to his/her program of study, counseling at various stages of enrollment, interactive tools to manage debt, repayment options, and school contact information. Our institution offers this information through a variety of media such as counseling, classes, publications, and electronic newsletters to email accounts, adding the information to award letters, or using a combination of methods. Our school also provides borrowers with entrance counseling material and the following resources at enrollment and following graduation or withdrawal:
• Estimate of required monthly payments on the borrower’s loan balance,
• Calculators to help estimate and manage debt,
• Loan servicer contact information,
• Contact information for delinquency and default prevention assistance on campus,
• Introduction to NSLDS for Students,
• Repaying Your Student Loans publication.
Early Identification and Counseling for Students at-Risk
Latin Beauty Academy, from the admission interview and financial aid process, identify borrower who may be a student at-risk who withdraw prematurely from educational programs, as well as borrowers who do not meet standards of satisfactory academic progress or both. Our institution implements counseling at-risk borrowers focused on the causes of withdrawal or unsatisfactory academic progress and solutions to resolve these matters. The end result of working with at-risk our students will be more borrowers completing their educational programs, equating to a higher retention rate for the school and lower numbers of defaulted borrowers.
Communication Across Campus
Latin Beauty Academy recognizes the importance of keeping a good communication of information relevant to the prevention and management of defaults must be a school-wide effort, which is the responsibility of the entire administrations and directors. Latin Beauty Academy has as mandatory policy communicate information across campus, which involve a default for borrower students. Each administrators and directors are trained on communication procedures for effectiveness and inclusiveness, as well as communicate additional information to promote success.

Information regarding borrowers’ academic progress and enrollment status is components of the information received by all relevant offices across campus including the offices that disburse funds and authorize payments. It is clear for Latin Beauty Academy that an accurate and timely communication among school entities and the Department of Education not only ensures the right aid is getting to the right student, but such communication will help our school comply with regulations regarding the school’s standards of administrative capabilities, accurate and timely reporting of borrowers’ enrollment status, and satisfactory academic progress.
Default Prevention and Retention Staff
Latin Beauty Academy has designed to dedicated staff to cooperate to student retention activities as a key to our school and student success as well as default reduction. Our institution adopts this strategy as they are in an excellent position to establish working relationships with borrowers from early in the students’ experience through repayment.
Late Stages of Enrollment
Latin Beauty Academy for during the later stages of enrollment and after students have left school, implements default prevention and management activities that help reduce defaults and help ensure borrower and school success.

Latin Beauty Academy has created a committee to address challenges and outline plan for preventing default. The activities of plan are focused on promote student and school success by increasing retention and reducing delinquency and default. Our institution has defined the challenge and trusts in its leadership, making the president and other administration and staff (all departments within the institution) aware of the risk.

Latin Beauty Academy, as needed, will create a data expert in order to provide statistical facts to identify common attributes of defaulted borrowers. In addition, as need it, the institution will obtain a copy of the NSLDS Borrower Default Summary Report (SCHDF1). Cross reference the defaulters with our internal data and seek key information such as in-school attributes (examples: GPA, early withdrawals, major, scholarships, or grants). These data elements will allow our institution to focus on risk. For example, is the average GPA lower for defaulters compared to non-defaulters? We understand how important is to know our possible delinquent borrowers. Our institution will be checking the ED School Portfolio Summary Report:

https://studentaid.ed.gov/sa/about/datacenter/student/portfolio

Latin Beauty Academy will be recognizing our cohort population (i.e., the number of students who, if they default, will change the cohort). We are knowledgeable to use the Federal Student Aid Cohort Default Rate Guide, which is a detailed explanation on how the cohort default rates are calculated.

The Guide is available online at Federal Student Aid’s Default Prevention Resource Information webpage. In addition, NSLDS Delinquent Borrower Report (DELQ01) provides the student’s demographic data including address, phone numbers and email address, as well as loan data including date, type, total outstanding balance, and current monthly payment amount. NSLDS School Repayment Information Loan Record Detail Report (DRC016), which helps to identify the entire cohort population.

Our faculty, from the classroom, promotes in the students be responsible with his/her loan making on time payments, as well as our administration use the resources from the Department of Education, such as: https://studentloans.gov/myDirectLoan/index.action
http://www.ifap.ed.gov/DefaultManagement/DefaultManagement.html
http://ifap.ed.gov/DefaultPreventionResourceInfo/
https://ifap.ed.gov/ifap/byNSLDSType.jsp?type=NSLDS%20Record%20Layouts&set=archive
Exit Counseling
Regulations require that Latin Beauty Academy must provide exit counseling. Exit counseling is an effective way to prevent defaults and is often the last opportunity that borrowers have to work with someone at our school regarding his/her loans. Our institution has designed an in-depth counseling that is focused on fully explaining repayment plans and choices that fit the borrowers’ needs are essential. Exit counseling is the opportunity to clear up any misconceptions students may have about their loan obligations and re-emphasize the consequences of default. Our institution takes full advantage of this opportunity to work with our students.
Withdrawals
Latin Beauty Academy is aware that many borrowers who default on their loans are borrowers who withdrew from school prior to completing their academic programs. Our institution identifies these borrowers, at the highest risk of default, while still on campus. Our institution understands that an early identification and timely intervention can improve student retention and reduce the number of defaulted loans. In addition to fulfilling the regulatory requirement to provide exit counseling to students, our school attempt to work with students even after they have left school by encouraging them to complete their programs of study and helping them resolve the issue(s) that prompted their withdrawal. In addition, our institution offers job placement services for a limited timeframe to students who have withdrawn. We provide valuable service for taking advantage of the borrower’s return to campus to provide counseling. Our institute considers that an employed borrower, even one earning less than if he/she had completed school, is better able to make loan payments than an unemployed borrower.
Timely and Accurate Enrollment Reporting
Timely and accurate enrollment reporting to the Secretary or the guarantor as appropriate is required by regulation and promotes school and student success. Our school activity ensures that borrowers receive their full grace period, and further ensures that contacts from the loan servicer such as correspondence and telephone calls occur in the appropriate timing and sequence. Our servicer’s contacts are designed to increase the likelihood that borrowers will satisfy loan obligations. We understand that timely and accurate reporting of changes in enrollment status is required of all schools. Adhering to a monthly schedule of reporting changes in enrollment status help with data accuracy.
After Students Leave School
Our effective default prevention and management activities help borrowers during repayment. In addition, these activities help our school to correct data and improve prevention and management practices and initiatives.
NSLDS Date Entered Repayment (DER) Report
The DER Report is available to schools upon request from NSLDS. As recommended by the Department of Education, Latin Beauty Academy bi-monthly compare its DER Report and makes any necessary corrections to their borrowers’ status using NSLDS Enrollment Reporting. Latin Beauty Academy assumes that a borrower’s DER is correct, as it is subject to change. Lenders can change a student’s enrollment status based on data from the clearinghouse or a student’s request. Likewise, Latin Beauty Academy update enrollment information based on information received from the student or another reliable source. Latin Beauty Academy understand that reviewing the DER Report will result in more accurate data, assuring that borrowers enter repayment in the correct cohort year and that schools receive accurate cohort default rates (CDRs).
Early Stage Delinquency Assistance (ESDA)
ESDA begins at the time of separation or early in the grace period. ESDA is a highly focused effort by lenders, guarantors, and schools to assist particular borrowers to prepare for entry into loan repayment. Certain borrowers, such as those who have failed to complete their academic program or borrowers who share specific characteristics or academic or related experiences, may be more likely are details used by Latin Beauty Academy to encounter difficulties initiating and maintaining on-time loan repayment. Latin Beauty Academy has designed ESDA activities afford lenders, guarantors, and own school as an opportunity to provide focused, enhanced loan counseling, borrower education, and personal support during the grace period, and in so doing help decrease the chances of later loan default. In addition to ESDA, our institution utilizes default aversion assistance offered by guarantors and similar assistance from the Direct Loan Servicer for borrowers who are at least 60 days delinquent.
Late Stage Delinquency Assistance (LSDA)
Though guarantors and the Direct Loan Servicer are extremely effective in working with borrowers throughout repayment, they lose touch with some borrowers. Latin Beauty Academy helps to re-establish communication during the late stages of delinquency, serving as a liaison between delinquent borrowers and staff experienced in borrower assistance. Our institution uses LSDA techniques enable to rescue severely delinquent borrowers, those who are more than 240 but less than 361 days delinquent, from default. Latin Beauty Academy recognize that LSDA can be successfully implemented with a minimal investment of time and staff. Our institution has implemented a call log sheet bi-weekly, which lets the most delinquent borrowers know that they have options, and that help is available.
Maintain Contact with Former Students
Latin Beauty Academy implements and practices the above strategies to keep in contact with our former students after they have left campus. Our institution, from the first step of the process, tries to collect ample reference information including cell phone numbers, e-mail addresses, and numbers and names of a variety of family members such as grandparents and cousins to have the resources to maintain contact with former students. Latin Beauty Academy also employs this strategy to avert defaults with borrowers during every stage of repayment.

Our institution also works with lenders, guaranty agencies, and servicers to identify delinquent and hard to reach borrowers, or those who have not been contacted at all to assist them with their repayment options and obligations. Latin Beauty Academy understands that contacting borrowers is an essential activity upon which successful default prevention and management can be built and contact from the school may be the only effective technique to save a borrower from the negative consequences of default.
Loan Record Detail Report (LRDR) Data Review
Latin Beauty Academy considers that although an aggressive and proactive approach to default prevention and management is responsibilities of our institution; it is also an important task do not end with prevention plans, initiatives, and strategies. Latin Beauty Academy together to borrowers, and the loan programs in general all benefit from a thorough examination of the draft and official CDR data to ensure that the rates are accurate and include the correct borrowers and loans. Upon receiving their rates, Latin Beauty Academy examines the LRDR, the report containing all the data that comprises the CDR calculation; it is our responsibility to challenge incorrect data reflected in their draft CDR, or request an adjustment, or submit an appeal of inaccurate data as reflected in their official CDR.
Analyze Defaulted Loan Data to Identify Defaulter Characteristics
Latin Beauty Academy understands that no matter how effective and far-reaching a default prevention and management plan is, some borrowers default. For this reason, our institution recognizes that a major part of any plan is to periodically review progress in preventing defaults. We consider one element of this review is a comprehensive analysis of defaulters. Latin Beauty Academy gathers information to discern who is defaulting and why and use this information to improve their default prevention and management practices and initiatives. In addition, we use internal data, which includes key information such as high school attended, other program of studies, demographics, grades, etc. Reviewing the LRDR also provides key data about borrowers that can assist in determining common characteristics among defaulters.

Latin Beauty Academy recognize that causes for defaults can include, but are not limited to, absent or incomplete internal procedures, practices, and communication, particular programs and course requirements or structure, and ineffective counseling. Frequent examination of defaulter characteristics coupled with an assessment of default prevention and management successes and shortcomings provide valuable information. Our institution promotes success by taking preventive measures to correct ineffective practices thereby preventing current and future borrowers from experiencing the same difficulties that plagued past defaulters. Our institution is consent that one solution to preventing future defaults lies in understanding what caused past defaults.
Enhanced Entrance and Exit Counseling
Latin Beauty Academy is in compliance with the applicable requirements in 34 CFR 682.604, 34 CFR 685.304, 34 CFR 668.165 and 34 CFR 668 Subpart D, the Department recommends that entrance and exit counseling also include the following:
Requests for Borrower Information

* During entrance and exit counseling, obtain information from borrowers regarding references and family members beyond those requested on the loan application, and ask for cell phone numbers and email addresses for borrowers and for family members;
* During exit counseling, obtain updated information from borrowers including their addresses, cell phone numbers, email addresses, and addresses of their references and various family members.
Information about Repaying the Loan
* Estimated balance of loan(s) when the borrower completes the program;
* Interest rate on the borrower’s loan(s);
* Name, address and telephone number for the borrower’s lender;
* During exit counseling, provide a sample loan repayment schedule based on the borrower’s total loan indebtedness;
* Estimated monthly income that the borrower can reasonably expect to receive in his or her first year of employment based on the education received at your school;
* Estimated date of the borrower’s first scheduled payment.
Reminders about Personal Financial Management and Title IV Loans
* Latin Beauty Academy provides financial literacy resources to borrowers at enrollment, throughout attendance, and following graduation or withdrawal;
* Latin Beauty Academy assures that students borrow only what is needed and can cancel or return any funds in excess of what is needed;
* Latin Beauty Academy is making sure that student borrowers must inform their lenders immediately of any change of name, address, telephone number, or social security number;
* Latin Beauty Academy enforces that if a borrower is unable to make a scheduled payment, he or she contact the lender before the payment’s due date to discuss a change in repayment plan or other repayment options;
* Latin Beauty Academy guarantees that general information will be provided about:
* Repayment options; and
* The sale of loans by lenders and the use by lenders of outside contractors to service loans.
Tools and Activities Implemented by Latin Beauty Academy
Latin Beauty Academy ensures data accuracy and employ effective loan counseling and default prevention and management techniques to aid students through the following resources:

FSA Assessments for Default Prevention and Management
* http://www.ifap.ed.gov/qamodule/DefaultManagement/DefaultManagement.html

Loan Counseling Students and Counselors
* http://www.studentaid.ed.gov

The Student Guide and NSLDS for Students
* http://www.studentaid.ed.gov

How much will it cost?
* http://nces.ed.gov/ipeds/cool/
* http://www.dlssonline.com/tools/search.asp (for Direct Loan Borrowers)

How will student pay for the loan?
* http://studentaid.ed.gov/students/publications/student_guide/index.html

Will student make enough money to repay his/her loans?
* http://www.bls.gov/search/ooh.asp?ct=OOH
* http://data.bls.gov/PDQ/outside.jsp?survey=nc

Repaying Student Loans
* http://www.studentaid.ed.gov/students/publications/repaying_loans/index.html

Ombudsman Office
* http://www.ombudsman.ed.gov

Ensuring Student Loan Repayment Best Practices for Schools
* http://www.ifap.ed.gov/eannouncements/0119stuhbkbestprectice.html

SFA Assessments for Schools
* http://www.ifap.ed.gov/IFAPWebApp/qualityassurance/SFAAssessment.jsp

Mapping Your Future
* http://www.mapping-your-future.org

Jump Start Coalition for Personal Financial Literacy
* http://www.jumpstart.org

Enrollment Reporting and Data Accuracy NSLDS Enrollment Reporting Guide, formerly SSCR User’s Guide
* http://www.ifap.ed.gov/nsldsmaterials/010904NSLDSEnrollRepGuide.html

NSLDS Date Entered Repayment Report, School Repayment Information Loan Detail Report, and Enrollment Reporting Summary Report
* https://www.nsldsfap.ed.gov

NSLDS Reports, requesting and formatting questions
* https://www.nsldsfap.ed.gov Reports Tab

NSLDS User ID
* CPS/WAN Technical Support 1-800-330-5947
* NSLDS Customer Support 1-800-999-8219

Cohort Default Rate Guide for information on challenges, adjustments, and appeals
* http://ifap.ed.gov/DefaultManagement/DefaultManagement.html

Default Prevention FSA Assessments
* http://www.ifap.ed.gov/qamodule/DefaultManagement/DefaultManagement.html

Ensuring Student Loan Repayment Best Practices
* http://www.ifap.ed.gov/eannouncements/0119stuhbkbestprectice.html

NSLDS Reports and Exit Counseling
* https://www.nsldsfap.ed.gov

NSLDS Reports, requesting and formatting questions
* https://www.nsldsfap.ed.gov Reports Tab

NSLDS User ID
* CPS/WAN Technical Support 1-800-330-5947
* NSLDS Customer Support 1-800-999-8219

Late Stage Delinquency Assistance (LSDA) Guide:
* For Direct Loan Schools, Direct Loan Servicing/Schools website, accessed via COD website http://www.cod.ed.gov

For FFEL Schools, Default Prevention Strategies
* http://www.ifap.ed.gov/qamodule/DefaultManagement/DefaultManagement.html
* or contact your guaranty agency

General Connections/Publications Information for Financial aid Professionals (IFAP) Library with publications, training, tools, references, laws, etc.
* http://www.ifap.ed.gov

The Office of Federal Student Aid
* http://www.ed.gov/about/offices/list/fsa/index.html

The Student Guide
* http://www.studentaid.ed.gov

NSLDS
* https://www.nsldsfap.ed.gov or https://www.nsldsfap.ed.gov/secure/logon.asp

ED Pubs, the Department of Education Online Publication Ordering System, helps students identify and order free publications from the Department. Examples of resources available at ED Pubs include the following:
• Repaying Your Student Loans (in English and Spanish)
• The Student Guide
• Getting Ready to Pay for College
• Counselors and Mentors Handbook
www.edpubs.org
1-877-4ED-Pubs or edpubs@inet.ed.gov

U.S. Department of Education Default Prevention and Management Team
Default Prevention and Management Activities
For our institution educate our students when requested loans is one of the most important activities within the plan. Our first question is: WHAT EVERY STUDENT/PARENT BORROWER NEEDS TO KNOW?

Student and parent must know the weigh the need for loans, only what is actually needed, and the repayment obligations. The loans must be repaid even if student did not complete his/her program. Borrowing in excess of what is actually needed means the student/parent must repay more at a later date. The monthly payments will be higher and it may be paying over a longer period of time due to the interest that accrues on the loans.
Track and Manage the Student Loans
Latin Beauty Academy ensures that our borrower students know how to keep track of their student loans or to contact their loan servicer for repayment, log onto to the National Student Loan Data System (NSLDS) at www.nslds.ed.gov or call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913). We remember to our students that the PIN number that they used as their electronic signature for the FAFSA can also be used to gain access to NSLDS.

Latin Beauty Academy informs to borrower students that on this website: www.nslds.ed.gov they will not only show students all of the federal and private loans student borrowed, but also who the servicer is for their loan(s). The servicer is the entity student will be corresponding with to coordinate repayment. In addition, we advise that to see a list of Federal Student Aid servicers for the Direct Loan Program and for FFEL Program Loans purchased by the U.S. Department of Education, go to the Loan Servicer page.

Latin Beauty Academy Also Advises to Our Borrower Students Based on the Following Questions/Answers:

1How Do I consolidate My Loans?
If you are expecting to borrow a Federal Stafford or Federal PLUS Loan for this coming year and also have a Federal Family Educational Loan, Stafford or PLUS Loans from prior years, you will have at least two lenders to repay when you graduate: your selected private lender and the federal government. The Direct Lending Consolidation program offers a way for you to combine both loans into one consolidation loan with one point of repayment. This loan consolidation program will be available to you once you graduate and begin thinking about repayment.

Latin Beauty Academy clarifies that there are advantages and disadvantages to loan consolidation and we recommend that you research this option carefully before proceeding. If you have questions about whether or not consolidation is right for you, please contact the Direct Loan Consolidation Loan Information Center at www.loanconsolidation.ed.gov.
2Who is eligible for loan consolidation?
To qualify for a Direct Consolidation Loan, borrowers must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in grace, repayment, deferment or default status. Loans that are in an in-school status cannot be included in a Direct Consolidation Loan.
3What is PUT program?
Since 2008 Stafford lenders have sold some of their loans to the Department of Education in an attempt to build liquidity in the market and provide more loans to students. This is called the Loan Purchase Commitment (PUT) Program.
As a result, continuing students may have already received communication from the Department of Education explaining the purchase. These loans are not considered Direct Loans but continue to be part of the Federal Family Education Loan Program (FFELP).
It is important to note that loans borrowed in the future may not have the servicer as loans you have borrowed already. This means that when you begin to make payments on your loans after graduation you may be making multiple payments to multiple entities.
4How Do I Repay My Student Loans?
Your loan servicer will provide information about repayment and will notify you of the date your loan repayment begins. It is very important that you make your full loan payment on time either monthly (which is usually when you’ll pay) or according to your repayment schedule.
If you don’t, you could end up in default, which has serious consequences. Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans.
Can you repay your loans while in school? Yes! Contact your loan servicer through www.nslds.ed.gov.
5When Should I begin Repaying my Loans?
After borrowers graduate, leave school, or drop below half-time enrollment, loans that were made for that period of study have several months before payments are due. This is called the “grace period”. Grace periods extends to 6 months after borrowers leave school or ceases to be enrolled in at least half time enrollment for 6 months. Grace periods can also extend up to 12 months; however, you must contact your loan servicer directly. During the grace period, no interest accrues on subsidized loans. Interest accrues on unsubsidized loans during grace periods, and this interest is capitalized when borrowers enter repayment. Borrower repayment period begins the day after their loan grace period ends. First payment will be due within 60 days after the repayment period begin.
Each loan has only one grace period. If borrowers return to school after the grace period has expired, the borrower qualifies for deferment while borrowers are enrolled but return to repayment after borrower leave school. There is no additional grace period. You are able to make payments on your student loan while you are still enrolled. If you have unsubsidized loans, you are able to make payments on your interest that is accruing.
6What Repayment Plans Are Available to Me?
When it comes time to start repaying your student loan(s), you can select a repayment plan that’s right for your financial situation. Generally, you’ll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose.

Standard Repayment
With the standard plan, you’ll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you’ll have up to 10 years to repay your loans. Your monthly payment under the standard plan may be higher than it would be under the other plans because your loans will be repaid in the shortest time. For that reason, having a 10-year limit on repayment, you may pay the least interest. To calculate your estimated loan payments, go to the Standard Repayment plan calculator.

Extended Repayment
Under the extended plan, you’ll pay a fixed annual or graduated repayment amount over a period not to exceed 25 years. If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans. If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.

This means, for example, that if you have $35,000 in outstanding FFEL Program loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFEL Program loans, but not for your Direct Loans. Your fixed monthly payment is lower than it would be under the Standard Plan, but you’ll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.

This is a good plan if you will need to make smaller monthly payments. Because the repayment period will be 25 years, your monthly payments will be less than with the standard plan. However, you may pay more in interest because you’re taking longer to repay the loans. Remember that the longer your loans are in repayment; the more interest you will pay. To calculate your estimated loan payments, go to the Extended Repayment plan calculator.

Graduated Repayment
With this plan, your payments start out low and increase every two years. The length of your repayment period will be up to ten years. If you expect your income to increase steadily over time, this plan may be right for you.

Your monthly payment will never be less than the amount of interest that accrues between payments. Although your monthly payment will gradually increase, no single payment under this plan will be more than three times greater than any other payment. To calculate your estimated loan payments, go to the Graduated Repayment plan calculator.

Income Based Repayment (IBR) – Effective July 1, 2009
Income Based Repayment is a new repayment plan for the major types of federal loans made to students. Under IBR, the required monthly payment is capped at an amount that is intended to be affordable based on income and family size. You are eligible for IBR if the monthly repayment amount under IBR will be less than the monthly amount calculated under a 10-year standard repayment plan. If you repay under the IBR plan for 25 years and meet other requirements, you may have any remaining balance of your loan(s) cancelled. Additionally, if you work in public service and have reduced loan payments through IBR, the remaining balance after ten years in a public service job could be cancelled. For more important information about IBR go to IBR Plan Information.
7What is Loan Default?
Loan default is failure to repay a loan according to terms of the Master Promissory Note. There can be serious legal consequences for student loan defaulters.

There are different options to prevent falling into default status.
The following are some options:

Deferment: A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue for subsidized loans. This request can be made if you are returning to school and are enrolled in at least half-time status. For Deferment options, click here. Please contact your loan servicer for more information.

Forbearance: A period during which your monthly loan payments are temporarily suspended or reduced. You may qualify for forbearance if you are willing but not able to make loan payments due to certain types of financial hardships. A complete list of Direct Loan forbearances and their eligibility criteria can be reviewed at www.dlservicer.ed.gov.

Repayment Plan: Changing repayment plans is a good way to manage your loan debt when your financial circumstances change. For example, you can usually lower your monthly payment by changing to another repayment plan with a longer term to repay the loan. There are no penalties for changing repayment plans.
8What if I Default on My Loan?
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled. Our school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe.
9Consequences of Default
National credit bureaus can be notified of your default, which will harm your credit rating, making it hard to buy a car or a house. You will be ineligible for additional federal student aid if you decide to return to school. Loan payments can be deducted from your paycheck. State and federal income tax refunds can be withheld and applied toward the amount you owe. You will have to pay late fees and collection costs on top of what you already owe you can be sued.
10How Do I get Help with My Loan Problems?
If you are having a problem with your federal student loan, contact the FSA Ombudsman at the US Department of Education. The FSA Ombudsman is dedicated to helping students resolve disputes and other problems with federal student loans.

The FSA Ombudsman will research your problem in an impartial and objective manner and will try to develop a fair solution. The FSA Ombudsman does not have the authority to impose a solution. Nevertheless, many students have found the FSA Ombudsman to be helpful in resolving disputes with lenders.

You can contact the FSA Ombudsman by phone at 1-877-557-2575, by fax at 1-202-275-0549, by mail at U.S. Department of Education, FSA Ombudsman, 830 First Street, NE, Fourth Floor, Washington, DC 20202-5144, by visiting fsahelp.ed.gov or by e-mail at fsaombudsmanoffice@ed.gov.

For more information and to learn what actions to take if you default on your loans see the Department of Education’s Default Resolution Group Web site.

Latin Beauty Academy is committed to helping you be successful while in school and after you have graduated or while taking time off of school. We understand finding a job or maintaining employment in our given economy can be difficult as well as managing your student loans.

There are also numerous articles which address this very concern such as on ConsumerReports.org, “Managing student loans in a shaky economy.”

Important: Remember, you are responsible to repay your student loans as agreed on your signed Master Promissory Note(s). Please keep your contact information up to date with your loan servicer to ensure you receive important correspondence. When in doubt, contact your loan servicer. Staying in touch with your loan servicer will maintain a good relationship and decrease the chances of loan default.

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