Financial Tools & Tips

Qualifying for financial assistance from the Federal Stafford (student) Loan program is never impacted by your credit history.

However, if you choose to borrow a private educational loan for your educational and living expenses, or if your parent wishes to be considered for a Federal PLUS Loan, you (or your parent) normally cannot have an adverse credit history.

A copy of a credit report may be obtained (for a fee) at any time from one or more of the three national reporting agencies: Experian, TransUnion, and/or Equifax. 

A credit report containing information from all three agencies may be obtained (at no charge) once per year at Annual Credit Report or by calling 877-FACT-ACT. 

Always review your credit report carefully for errors and incorrect information. If you identify a mistake, follow the instructions included in the report.  If you have a negative credit report, do not utilize the services of any company or person claiming to be able to 'fix' your credit profile. They won't be able to do so. All information, positive and negative, remains a part of your credit history.

Your credit history does, however, continue to evolve over time. As you use credit responsibly and pay your bills on time, you'll build a positive credit history. In fact, your bill-paying pattern during the most recent 18-24 months is typically much more important than your financial activity of 3-5 years ago.

If you're having difficulty paying your bills, the non-profit National Foundation for Credit Counseling (NFCC) has member agencies that can assist you in establishing a budget and negotiating a repayment plan with your creditors.

If you want to avoid the temptation of assuming additional debt, you have the option to visit OptOutPrescreen.com. Opting out means you no longer wish to receive notification of preapproval credit or insurance offers.  You can learn more about your options on OptOutPrescreen's frequently asked questions page.

Parent PLUS Loan Application Information and Process

Information about the Parent PLUS Loan for Undergraduate, dependent students can be found on the Admitted Student Information page and Federal Student Aid.  If you’re applying for a Parent PLUS Loan, the video below will provide important tips and walk you through the application process. 

Data theft occurs when someone obtains key pieces of your personally identifying information, such as your name, address, birthday, phone numbers or Social Security Number (SSN). Identity theft occurs when that information is used for any fraudulent or other unlawful purpose. The unlawful acquisition of personal identifying information does not necessarily mean that identity theft has occurred. This distinction is important when considering any response you might wish to make to the disclosure of your SSN. 

Order your free credit report

...Or order additional copies of your report from Experian, TransUnion, or Equifax for a fee.

...Then review your credit report

Once you have received a copy of your credit report, look for any accounts that you don't recognize, especially accounts opened recently. Look at the inquiries or requests section for names of creditors from whom you haven't requested credit.

Some inquiries, labeled something like "promotional inquiries" are for unsolicited offers of credit, mostly from companies with whom you do business. Don't be concerned about those inquiries as a sign of fraud. (Note: If you place a fraud alert (See Section 'What is a Fraud Alert and How do I Place One?') on your account, you are automatically removed from lists to receive unsolicited pre-approved and pre-screened credit and insurance offers. You can also stop those offers by visiting https://www.optoutprescreen.com or calling 1-888-5OPTOUT)

Look in the personal information section for addresses where you have never lived. Any of these things might be indications of fraud. Also be on the alert for other possible signs of identity theft, such as calls from creditors or debt collectors about bills that you don't recognize, or unusual charges on your credit card bills.

If you find items you don't understand on your report, call the credit bureau at the number given on the report. Credit bureau staff will review your report with you. If the information can't be explained, then you will need to call the creditors involved and report the crime to your local police or sheriff's office.

If you find errors in your credit report, informing the issuing credit bureau at the phone number located on the report to have the information removed or corrected.

 

If you determine that someone actually has used your personal information for an illegal purpose, you should considering taking the following steps:

 

These Internet sites provide information on steps you can take to protect your credit and identity. 

Department of Justice
https://www.usdoj.gov/criminal/fraud/websites/idtheft.html

The Department of Justice site describes what can happen if you are a victim of data theft or identity fraud. It provides steps for action, tips for reducing your risk of fraud, and phone numbers, addresses, and links to credit bureaus and other governmental agencies you may need to contact. 

Department of Education
https://www.ed.gov/

You can find information about identity theft specific to students. Use the search bar and look for “identity theft” for more information.

  Federal Student Aid - Scam Warnings

Are you having difficulty managing your monthly student loan payments? Consolidating your Federal Student Loan obligations is a good way to make repayment easier and often can lower your monthly payment(s). In addition, you'll be responsible for just one payment each month (instead of a separate payment for each of your loans) and you may also be able to 'lock in' a lower interest rate. 

On the other hand, your new consolidation loan interest rate may be higher, which can result in a greater total amount of interest required to be paid over the life of the loan, especially if you select a longer repayment schedule. However, the benefit of having a lower single monthly payment may outweigh the higher total finance charges.

To determine whether consolidating your student loans is an option for you and read more about consolidation, visit Studentaid.gov.

 

It's extremely important to understand that you, and only you, are responsible for repaying the federal loan funds you've borrowed. This is true even if you fail to graduate with a degree, have difficulty locating employment, or if you're not satisfied with your educational experience. If you do not make the required payments on your loan obligation according to the terms of the legal promissory note you signed, and do not apply for a forbearance or a deferment, your loans can go into default, which has serious consequences. In addition, federal student loans are not dischargeable through bankruptcy.

If you default on a federal loan...

• your loan may be turned over to a private collection agency to recover the money you owe,
• you'll be liable for any costs incurred to collect on your defaulted loan, including late fees, court costs and legal/collection fees,
• you can be sued for the entire amount of your loan,
• your employment wages can be garnished,
• your state and federal income tax refunds may be withheld,
• your credit history will be negatively impacted, making it difficult to purchase a vehicle or home, and/or
• you'll be ineligible to receive any additional federal or state financial assistance until your defaulted loan is fully satisfied.

Defaulting on a federal student loan is very serious. Here's how to prevent default from occurring...

1. Make sure you understand your borrowing responsibilities and options.
2. Always make your loan payments on time.
3. Promptly notify the UCM Office of Student Financial Services of any changes to your name, address, or any other information that may impact repayment of your loan.
4. If you begin to have difficulty with your loan payments, consider applying for a forbearance or a deferment. Don't wait! These options are not available to an individual whose student loans have already gone into default.
5. Consider consolidating your federal student loans into a single educational loan, with one interest rate and one monthly payment.
6. Maintain accurate records of your loans, as well as all the other financial assistance you received while pursuing your education.

 Need more information? The U.S. Department of Education publishes a guide to help students with repaying their defaulted loans. You can also read more about default at Federal Student Aid.

 Student Loan Deferment information from the U.S. Department of Education.

 Federal Student Aid Ombudsman

After you graduate or otherwise leave the University of Central Missouri, you may be willing (but not financially able) to make the monthly payments on your Federal Student Loans. If you do not qualify for a federal loan  deferment, applying and being approved for a forbearance will permit you to postpone your monthly payments (or make lower payments) for a limited period of time. 

Unlike a deferment, you normally must pay the interest due each month during any forbearance period that is approved for you. However, you can choose to capitalize the interest and have it added to the total amount outstanding on the loan when you're once again able to make regular monthly payments.

Visit Studentaid.gov for detailed information about applying for federal loan forbearance.

 Income-Based Loan Repayment

A past or current bankruptcy normally has no impact on a student's future eligibility for federal grant, loan, and work assistance.  In addition, federal grant or loan aid cannot be denied to a student solely due to a bankruptcy (as long as the student is not currently in default on a previously received federal loan). This is because a student's credit history is never checked as part of determining his/her eligibility for federal student assistance. Further, if a student's federal loan is discharged in bankruptcy after (s)he defaults, the loan is no longer considered to be in default (and no further payments are required). 

Federal student loans, however, are rarely discharged in bankruptcy and only if the student petitions (and can prove) that repayment will cause an extreme financial hardship. Also, federal student loans have no statute of limitations. Delinquent loan payments and loan defaults can impact a student's credit rating for a minimum of 7 years. 

On the other hand, a parent who applies for Federal PLUS Loan funds is usually denied if (s)he has an adverse credit history, one definition of which is having had debts discharged in bankruptcy within the past 5 years.

 A student with an adverse credit history due to a bankruptcy will usually be denied private educational loan funds by most lending organizations. However, the student may be allowed to receive a private educational loan if (s)he has a credit-worthy co-signer. A parent's bankruptcy or adverse credit history normally has no impact on a student's eligibility for private loans. Also, the U.S. Bankruptcy Code states that if certain private loans can be proven to be education-related (similar to the treatment of federal student loans) these private loans are not required to be discharged during a bankruptcy filing. 

Visit FinAid for additional information about the relationship between bankruptcy and financial aid.

 Public Service Loan Forgiveness