|
The Guarantor of Choice SM |
Creating Consistency in Educational Finance: A Training Curriculum
Module 1: Customer Service Representatives
Practice scenarios: Determining the most appropriate repayment option
Knowing the rules and regulations about deferments and forbearances is important in helping borrowers with loan repayment. More importantly, it is critical that borrowers are advised on the most appropriate repayment option based on their financial situation. Following are some scenarios that can help customer service representatives assess a borrower's financial situation and determine the most appropriate repayment option.
Scenario A:
Jennifer is working, earning $4,000 each month, but is having a hardship because of a recent divorce and moving to a new location. She is currently under the standard repayment plan, and she'd like to postpone payments for just a couple of months while she gets back on her feet.
Solution: First of all, Jennifer exceeds the minimum salary requirements to qualify for an Economic Hardship Deferment. One option for her would be to change from a standard repayment plan to a graduated repayment plan. This would allow her to reduce the payment amount while she gets back on her feet. Another option would be a reduced-payment forbearance.
Scenario B:
Robert has used 60 months of forbearance and all of the unemployment deferment option. His loan balance has reached $45,000, and Robert doesn't want to share his gross monthly income, making it difficult to qualify him for an Economic Hardship Deferment.
Solution: Robert appears to have already received substantial forbearance and deferment assistance. Therefore, to approve another forbearance would only encourage Robert not to pay on his loan. A more effective way to handle this type of situation might be to advise Robert of the different repayment options. A standard repayment option or an extended plan (if he qualifies) would be the most appropriate guidance for Robert.
Scenario C:
Brian has called and requested forbearance for a few months. He is the assistant manager of a retail store and makes $6.25 per hour. He's only working about 30 hours per week. He has no other student loans, but he pays $200.00 in child support each month. All of his loans were disbursed after July 1, 1993, his balance is $23,000, and his monthly payment is $178.00.
Solution: In this case, Brian's annual income is below the poverty line, so he would qualify for an economic hardship deferment. Unaware of the deferment option, Brian is requesting a forbearance. In this instance, it is the responsibility of the customer service representative to give Brian the option to apply for an economic hardship deferment.
Scenario D:
Terry has called in and wants to know if there is any way to help her with her payments. With all of her student loans with the various servicers/lenders, she pays $800.00 a month and is having a very difficult time. Her annual salary is $48,000. What options are available?
Solution: In this instance, consolidation or a graduated repayment plan would be appropriate repayment options for Terry to consider. Consolidating her loans will allow Terry to combine all her loans, reduce her payments, and make one combined payment. However, Terry should be warned that if she chooses to consolidate, she will end up paying more interest over the life of the loan. Another option for Terry would be to change from a standard repayment plan to a graduated plan. This would allow her to have a reduced payment at the beginning of repayment and then have the payment adjusted as her salary increases. The disadvantage to this second option is that Terry will still have to manage her loans with the different lenders.
|
© 2008 Texas Guaranteed Student Loan Corporation |
|