Virginia Student Loans
Take Some Time to Learn the Choices
State governments have become increasingly proactive in sanctioning companies to be their premier “go-to” for the Federal Family Education Loan Program (FFELP). In many cases the same agency may also provide alternative loans and more specialized loans. All are chosen for their commitment to offering the best advantages and incentives to residents.
Virginia’s “go-to” student loan guarantor is the Educational Credit Management Corporation (ECMC), also the loan guarantor for Oregon’s FFELP program. The job of the ECMC is to financially back the federal Stafford and PLUS loans and work hand in hand with lenders and loan servicers who all play a crucial role in the process of financing a college student.
How ECMC Works
The way ECMC works is you choose a financial lender, such as Bank of America or Sallie Mae, from whom you are interested in borrowing for your Stafford Loan or your PLUS Loan. You fill out the ECMC application with the appropriate lender number and submit it to ECMC. And you can do this online.
The trick to making the whole financial aid process affordable for you, though, is realizing that when you choose a lender, you should explore their loan packages. Each of them offers slight variations on the FFELP theme. Typically you will find them all competing to offer you the lowest interest rates, no loan or origination fees, credit rewards, and interest reductions as your repayment goes along.
How to Find an Alternative Loan
Chances are you will choose to work with a lender who not only provides the FFELP but also is in the business of alternative student loans, as well. True good deals often come from not-for-profit lenders as opposed to private lenders like your commercial bank. The former have educational, tax-free funds from which they finance the loans, giving them the leg up in offering the most attractive rates and benefits.
Remember when you apply for an alternative loan, sometimes called a supplemental loan, you will either be required to prove your own good credit or have a co-borrower ready to sign with you. Some lenders even offer more discounts for good credit times two, yours and that of your co-borrower.
Using a Lender Favored by your School
Another way to shop for a good student loan deal is to check with your college financial aid office. They will tell you which lender they typically use for loans. For example, the University of Virginia’s Law School uses Bank of America. You may not necessarily use Bank of America on your own, but UVA has negotiated a win-win relationship with BOA that must provide their students with ultra-competitive student loan deals.
Special Loan Programs
Recently Sallie Mae established two versions of a Stafford Loan that offer low interest rate loans exclusively for Virginia’s teaching or nursing students. The purpose of the program is to offer incentives for students to pursue the careers and to keep those who are fresh graduates right within the state:
- Teach for Virginia Student Loan Program gives teaching students a significant credit toward the balance of their loan if they agree to teach in Virginia after graduation.
- Care for Virginia Student Loan Program are bundled with the same criteria and benefits.
Repayment and Consolidation of Loans
Remember, most students carry multiple student loans, which means many of them are sweating repayments, most of which come due after the first six months following graduation. When you have more than one loan, especially federal, and may be a bit stressed under the debt burden, you might apply with your chosen lender for the Federal Consolidation Loan or another private consolidation loan. Eliminate your chances of defaulting; make one, low monthly payment as opposed to a few high payments. The obvious drawback is the extended period of repayment.
