Student Loan FAQ

Contact your lender, servicer, or Champion to explain your situation. Chances are you have options that may allow you to make a lower payment, or no payment at all depending on the details of your loan and finances. Contact us today and we can help you pick the right solution.

Champion is a student success company. For over 25 years we’ve helped students just like you navigate the often confusing and complex processes of getting and repaying student loans. We are NOT a debt collector or a collections agency of any kind. We were hired by your school to help their important students know more about their loans, and deliver the answers and support you need.

If you received a call, an email or a letter from us, it is likely we need to speak with you to relay some urgent information about your loan. Give us a call today, and no matter what your situation, we can provide you with answers and options to make sure you protect your future.

If you fail to make your scheduled student loan payments, your loan will eventually go into default. After you become 270 days delinquent (behind on your payments), your lender can file a claim with the guarantor of your loan. When this happens, the guarantor will pay the money you owe to your lender. The guarantor will then be responsible for collecting your loan on behalf of the federal government through a variety of options that may include wage garnishment or withholding of tax refunds.

Being in default can severely harm your credit and your ability to qualify for other loans, housing, and even employment. However, it’s also really simple and straightforward to get things back in order, repair your credit, and even qualify for student loans again through a process called
Rehabilitation. You can rehabilitate your loan by making nine monthly on-time and full payments in a row after speaking with your servicer. The income-based options available to you mean that monthly rehabilitation payment can be as low as five dollars a month.

A student loan deferment allows you to postpone the payment of your loan for a period of typically 6-months’ time. You are entitled to defer your student loan payments if you (1) meet certain eligibility criteria, and (2) if you request a deferment by completing the appropriate forms. A wide range of difficult financial situations are covered by 9 different deferment forms. To apply or get further information about deferments, contact your lender, servicer, or Champion. You can also download the applicable deferment forms from our website.

Forbearance is a period of time during which a lender permits a borrower to temporarily postpone making payments or make reduced payments. Forbearance is usually granted at the discretion of the lender. You are still responsible for the interest that accrues; and, if unpaid, the interest may be capitalized. Forbearance is often used to bring delinquent loans current in situations where there is a legitimate financial hardship, and you do not qualify for a deferment. To find out if this is the right option for you, or to get further information about forbearances, contact your lender, servicer, or Champion.

A status of Claim Pending means your loan has gone past the maximum number of days past due. Your guarantor has not yet paid the lender’s claim, and it might be possible for you to avoid the consequences of default. But time is short, and you need to act immediately. There are only a few days before the guarantor will pay the claim and finalize the default of your loan.

Interest capitalization is when a lender adds the unpaid accrued interest on a loan to your outstanding principal balance. This effectively increases the total amount owed (or the loan balance). Interest is then accrued on your new, higher total principal balance.

If your lender did not receive your deferment or forbearance form, contact your lender or Champion as soon as possible. Be sure to have your completed form nearby. If you don’t have a copy of your completed form, you will need to request, complete and submit a new one to your lender right away. You can also download the deferment forms from our website.

If your lender did not receive a payment, contact the lender as soon as possible. Tell the representative the amount of payment, when you mailed it, and the check or money order number. If the payment was a check, ask your bank if and when it cleared, and provide this information to the lender along with a copy of the front and back of the check if possible. Be sure to write legibly on all forms and keep copies. Your lender can file a claim with the guarantor if the deferment, forbearance, or payment is not received and your loan becomes at least 270 days delinquent.

If you are currently in school and are being billed for your student loan, its likely you transferred schools, dropped below half-time status or are attending school beyond your expected graduation date. You should contact your lender or Champion and be ready to provide proof of your current in-school status. Failing to do so means your lender will expect you to begin making payments as soon as your grace period ends, which is typically 6 months following your last date of attending school (at a minimum of half-time status).

If your relatives are receiving calls from Champion, it’s likely we need to speak with you urgently about your loan. When you signed your promissory note, you provided the names, addresses and phone numbers of relatives and friends who could be contacted in the event your loan holder, servicer or Champion is unable to contact you directly. We would reach out to them hoping they can leave a message for you or provide your new address and phone number.

Never! Champion will not report any information about you or your loan to any credit agency or creditor. However, federal regulations require your lender to report your loan and repayment information to all credit agencies. Champion is here to help you make sure you never need to worry about your student loans negatively affecting your credit, and we are here to answer any questions you have about how to keep your financial future protected.

Absolutely, contact Champion today and we will help you identify who your servicer and guarantor are, along with the best methods of contacting them. However, we are only able to look up loan information for students who attend or have attended schools who work with Champion College Services. Ask your school’s Financial Aid Office for more information if you’re unsure. You can also get a complete listing of your loans from the National Student Loan Data System (NSLDS).

Champion can provide you with general assistance regarding your private or parent PLUS loans, but we are not able to contact servicers or guarantors on your behalf because private and parent PLUS loans may have unique requirements that differ from more traditional Title IV loans.

There are quite a few different programs you might qualify for, depending on your circumstances, which could allow for some or all of your student loan debt to be forgiven, discharged or cancelled. If this occurs, you would no longer be required to make a payment even if you haven’t finished paying off the loan.

Reasons for eligibility may include death or a disability, closure of the school you are attending and whether you are employed as a teacher or in certain public service jobs.

The U.S. Department of Education provides information on the different types of loan forgiveness, discharge and cancellation that you can view here, and it include details about eligibility for each program you should review to determine if you qualify.

If you’re still unsure about your options, contact your loan servicer or Champion today.

Student loans are not typically resolved through bankruptcy, meaning you will still likely be responsible for paying your student loans even if you have successfully filed for bankruptcy in the past or expect to do so in the future. In order for your student loans to be cancelled or discharged in a Chapter 7 or 13 bankruptcy, you would need to prove in court that making a regular loan payment would cause undue financial hardship.

It’s highly recommended that you discuss the specifics of your student loan debt with your legal counsel or bankruptcy attorney; they will be able to help you fully understand if and how your student loans will be impacted by the bankruptcy options available to you.

You are eligible for an in-school deferment (meaning you don’t need to make a loan payment while currently in school), as long as you meet the criteria. This typically means you need to be attending half-time at a minimum, and that you are not attending beyond your expected graduation date.

While it’s incredibly convenient to not have a student loan payment to worry about while you are in school, you need to be aware of the interest that may still be accruing (and that you will be required to pay) during your in-school deferment. This interest that accrues and increases your total loan debt, coupled with the fact you will eventually max out the loans you are eligible to receive make it unrealistic to plan on staying in school indefinitely to avoid paying your student loans.

If you were provided with student loans and attended but did not finish your program at school, you will almost certainly be required to pay those loans back.

Those students who received a loan but either didn’t attend school or only attended for a few days may be eligible to cancel their loans. The promissory note you signed for your loan identified the date by which you are able to cancel the loan. Be aware that if you attended even a day beyond that date, you are responsible for repaying the full loan amount, and the school is not obligated to refund any of the loan funds.

To discuss the details of your situation and get more info, contact your loan servicer or Champion today.

Didn’t find the answer you were looking for? We apologize, and we’re standing by to help you get the info you need. Reach out to us and get some quick assistance today.