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ACS Student Loan: What You Need to Know

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ACS Student Loan

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 loans as an ACS borrower.

Who Is ACS?

ACS Education website

Affiliated Computer Services, Inc. (ACS) was founded in 1988 by Darwin Deason in Dallas, Texas, and initially provided data services to the financial aid industry.

In 2010 ACS was acquired by the Xerox Corporation.

Let's clear up some confusion: ACS Education Services is not actually an institution that directly lends money to students. 

The ACS is an independent student loan servicer.

This means that ACS Education is a company that works along with the Federal Government's lender (Department of Education) in order to manage federal student loans, basically working as a bridge between the lender and the student borrower.

What Is an ACS Student Loan?

ACS Education

The ACS being the servicer of your student loan, as we said before, meaning they're in charge of handling your account payments, performing customer service, accessing the National Student Loan Data System (NSLDS), 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 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 loan forgiveness

Public service loan forgiveness (PSLF)

Teacher loan forgiveness

Student loan discharge

Total and permanent disability (TPD)

What Are the Advantages of this Loan?

ACS advantages

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 student loan 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 student loan 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 loans program. They provide a secure repayment calculator to help you figure out interest rates and estimate your monthly student loan payments.

ACS calculator screenshot

ACS repayment calculator

Your account 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 federal student loan servicer like ACS will also include benefits that make payment easier and all in one place. With ACS Education services account you'll have the option to:

  • Pay online
  • Set up recurring payments free of charge
  • Sign up for payment reminders
  • Have an e-Signature option for filling out online forms
  • Access detailed account information
  • Apply for an unemployment deferment, economic hardship deferment or forbearance for FFEL student loans online

Also, ACS Education's customer care team can answer questions about managing any outstanding loans you may have.

These benefits make organizing and dealing with your loans much easier and all in one place.

What Are Some Downsides?

ACS Education downsides

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.

Consolidating student 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:

  • FFELP Loans (Stafford, PLUS, Grad Plus, SLS, and Consolidation)
  • Federal Direct Loans (Stafford, PLUS, Grad Plus, SLS, and Consolidation)
  • Federally Insured Student Loans
  • Federal Perkins Loans
  • Health Professions Student Loans
  • Nursing Student Loans

Besides the issues with consolidating student loans, 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 student 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.

How Do You Qualify?

ACS student loans how to qualify

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 include 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 requirements you need to qualify for certain ACS loans before you apply, as those qualifications will apply with the ACS student loan program as well.

How Do You Apply for an ACS Student Loan?

ACS Education how to apply

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 loans program.

Bottom Line

ACS borrower

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.