As we all know, college is expensive.
Many people must take out loans in order to afford tuition and fees, resulting in 44.2 million Americans with student loan debt.
One common program people use is called an ACS student loan. If this is something you have or are planning to look into, then keep reading.
We are going to answer some common questions and go through what you need to know about ACS loans as a borrower.
Let's clear up some confusion: ACS Education is not actually an institution that directly lends money. The ACS is an independent loan servicer.
This means that ACS Education works along with the lender in order to manage the student loan, basically working as a bridge between the lender and the student borrower.
The ACS is the servicer of the student loan, as we said before, meaning they're in charge of handling your payments, performing customer service, reporting to credit bureaus, seeking payment on defaulted loans, and processing any forgiveness programs that you might apply for.
ACS student loans also allow you to consolidate your loans, meaning it allows you to bundle together multiple ACS loans.
ACS Student Loan Forgiveness
What is ACS loan forgiveness? There are several options for federal loan forgiveness, cancellation, and discharge if you hold any ACS student loans: (click to expand)
Income-Driven Repayment Plans offer to keep monthly payments affordable by making them a certain percentage of the borrower current income.
Income-driven plans come with a built in forgiveness for any amount left after the repayment program ends (usually 20-25 years).
The Public Service Loan Forgiveness (PSLF) Program will forgive any remaining balance of your Direct Loans after 10 years of qualifying payments under a qualifying plan while working full-time in either a public service position or a not-for-profit organization.
The Department of Education provides a PSLF Emplo
yment Certification form for you to fill out.
Under the Teacher Loan Forgiveness Program, if you teach full-time for five complete and consecutive academic years in a designated elementary or secondary school, or educational service agency that serve low-income families, you may be eligible for Loan forgiveness of up to a total of $17,500 on your FFEL or Direct loans.
Apply using the ACS Teacher Loan Forgiveness Application form.
In certain situations, some of your ACS student loans can be canceled.
The most common discharge programs are (including links to ACS loan discharge applications):
A Total and Permanent Disability (TPD) discharge releases you from repaying 3 types of loans:
In order to qualify you must provide the Department of Education proof that you are totally and permanently disabled.
More detailed information can be found here:
Applying for a total and permanent disability discharge for your ACS school loans can be done online on the TPD website.
We've actually already mentioned one of the main advantages of this type of loan: consolidation.
Many people take out multiple loans when going to college, which means that they'll have multiple different payments and interest rates each month. This can be confusing and hard to organize.
With ACS student loan consolidation, you can say goodbye to having 5 different payments with 5 different checks. You can consolidate your loans into a single monthly payment (depending on the types of loans you have).
You'll also have the option to "lock in" a particular interest rate, which can reduce your overall cost when repaying the loan.
If you choose not to consolidate your loans, there are still numerous benefits to using the ACS student loan program. They provide a repayment calculator to help you figure out interest rates and estimate your monthly payments.
Your payments will depend on the amount of money you have taken out in loans, with larger amounts being repaid over longer periods of time.
Having a loan servicer like ACS will also come with benefits that make payment easier and all in one place. With ACS Education services you'll have the option to:
These benefits make organizing and dealing with your loans much easier and all in one place.
The consolidation that has many benefits can also result in some negatives in certain situations.
Consolidating your loans can mean that you will be repaying them for a much longer period, even if you are paying a lower amount each month. A longer repayment period can mean you will pay more in interest overall.
This consolidation can also result in a higher interest rate, which would again result in paying more in the long run compared to non-consolidated loans.
Also, not all loans are available for consolidation. You can't combine federal and private loans into one consolidation either. The following are the types of loans that the ACS lists on their website that they will accept for consolidation:
Besides the issues with consolidation, there are some other issues to be aware of when considering an ACS school loan. In recent years, there have been numerous complaints about how ACS manages student loans, which resulted in the Department of Education severing ties with this loan servicer.
Borrowers have expressed frustration with the ACS' methods of management, saying that they were told misinformation about payment plans, and that borrowers would feel trapped in plans they no longer wanted.
There was even a 2016 lawsuit in Massachusetts citing these exact issues that settled for 2.4 million dollars.
There is no set way to qualify for the ACS student loan program, as it will depend on a variety of factors. Depending on the type of loans you have or want, you'll have different qualification guidelines.
Federal loans usually depend on enrollment in certain accredited universities, your GPA, and your income level. Depending on which school you are attending, those institutions could have specific guidelines are well.
Banks and credit unions will look at your credit score to see whether you qualify for a loan or not. While not every loan will look at or depend on these things, some will.
Be sure to know exactly what you need to qualify for certain ACS loans before you apply, as those qualifications will apply with the ACS student loan program as well.
Let's say you know all of the benefits and the risks, and you qualify for some loans. How do you actually apply?
If you are applying for a federal loan, you'll have to fill out a Free Application for Federal Student Aid (FAFSA) form. Once you fill that out, you should receive a Federal Student Aid Report which will indicate which loans you were awarded.
The ACS can help you will all of these things: you can go on their website and they can guide you through the process. You'll need to register on their website, and you can call to have someone talk you through the steps.
If you have already graduated, you will need to figure out which loans you have, and whether they can be applied for consolidation through the ACS student loan program.
The ACS student loan program has its advantages and disadvantages. It will all depend on what loans you have, your financial situation, and your particular wants and needs.
It's important that you understand exactly what the ACS student loan entails so you can make proper payments and manage your finances properly.
Student loan debt can be intimidating, but if you understand your situation and follow through on payments, you should be all set.
We know that it is easy to become overwhelmed by student loans and student loan debt. If you have any questions or need any help with your loans, please don't hesitate to contact us.