Michigan residents who are delinquent on their federal student loans can receive free one-on-one counseling to return to a path of financial success, according to the Michigan Department of Treasury.
The terms for different student loan programs, including amount, interest rate and repayment terms can vary greatly from program to program. It is important to be an educated borrower and review the terms of each program prior to accepting any loan funds. Federal student loans are administered through one of two federal loan programs - the Federal Direct Loan Program or the Federal Family Education Loan Program (FFELP). As of July 1, 2010, no new loans are available through FFELP.
- Michigan Guaranty Agency
The Michigan Guaranty Agency (MGA) works in partnership with commercial lenders which provided loans to borrowers through the Federal Family Education Loan Program. As the guarantor for your FFELP lender, MGA provides assistance to the lender when the lender has difficulty collecting the student loan debt. If no payments are received and the loan defaults, MGA becomes the loan holder and collection attempts continue, with payments due to MGA.
MFA-Student Loan Programs serves existing Federal Family Education Loan (FFELP) and Michigan Alternative Student Loan (MI-LOAN) borrowers with delinquency/default resolution, rehabilitation, and loan servicing oversight. *No new loans are being issued. MFA-SLP, formally the Michigan Higher Education Student Loan Authority (MHESLA), has been providing higher education services to Michigan citizens since 1975.
- Federal Government Loan Types and Terms
New federal student loans must come from the William D. Ford Direct Loan Program. Direct Loans are funded directly by the federal government, which means a student enrolled at that school receives their federal student loans (including Stafford, PLUS and GradPLUS loans) directly from the school instead of from a lender. The following describes terms for new Direct Loans.
- Private Education Loans
You may have heard or seen advertisements that suggest you can borrow thousands of dollars to pay college expenses. These advertisements generally are promoting private student loans, also known as alternative loans. Although many students must borrow private loans to meet all of their college costs, there are more cost-effective ways of paying for college. As a result, you should use private loans only as a last resort, if all of your other sources of financing fail to cover your college costs.