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Explanation of Deferments

Explanation of Deferments:
Repayment of principal and interest is not required during deferred periods, and the 10-year repayment period can be interrupted. In order to receive deferment, you must report your eligibility for deferred status to your lending institution or its billing agent, EduServ Technologies, Inc., on the appropriate deferment request form. Mail your form immediately upon receipt of the first bill after you are eligible for deferment status. If you are unable to make your payments and are not eligible for the following deferments, contact your Lending Institution.

* Federal Perkins Loans Made On Or After July 1, 1993 might qualify for a deferment benefits stated below.

1. Enrolled in an institution of higher learning and pursuing at least half-time course of study:
2. Pursuing a course of study in an approved fellowship program or approved rehabilitation training program for disabled individuals (This entitlement does not include a medical internship or residency program.);
3. Unable to find full-time employment (3-year limit);
4. Experiencing economic hardship. (3-Year limit);
5. Engaged in services described under the cancellation provisions; and
6. A residency program in dentistry.

* Federal Perkins Loans Made On Or After July 1, 1987 through June 30, 1993 might qualify for the deferment benefits stated below. You may also apply for the deferments listed above for loans made July 1, 1993 and after, but only for periods beginning October 7, 1998 and after.

1. Enrollment and attendance as a regular student in a least a half-time course of study in an institution of higher education.
2. Internship or residency program in a hospital or health-care facility offering postgraduate training and leading to a degree/certificate awarded by an institution of higher education. (2-Year limit)
3. Temporary total disability for borrower or spouse. (3-Year limit)
4. Temporary total disability of a dependent in your care preventing you from attending school or from being employed. (3-Year limit)
5. Active duty in the National Oceanic and Atmospheric Administration Corps. (3-Year limit)
6. Parental leave deferment if the following provisions are met by you: (6-month limit)
7. 1. Are pregnant or are caring for your newborn or newly adopted child; and
   2. Not gainfully employed/attending school; and,
   3. Have attended an eligible school at least half time during the last six months.
8. The mother of preschool age children and are entering or re-entering the work force making less than $1 more than federal minimum wage. (12-Month limit)

* Federal Perkins Loans Prior To July 1, 1987 - See promissory note.

1. You may also apply for the (6)deferments listed for loans made July 1, 1993 and after, but only for periods beginning October 7, 1998 and after.

Explanation of Cancellations:
You are eligible to apply for partial cancellation of loan principal and accrued interest on your Federal Perkins, National Direct, or National Defense student loan if you meet one of the eligibility criteria described below, and regardless of the provisions listed in your promissory note. However, if the service or employment for which you are claiming partial loan cancellation is not included in your promissory note, then the service or employment must start October 7, 1998 or after. In this case, teachers employed in a year-around program may qualify if the school year began on or after 7/1/98.

Teacher Cancellation Benefits:
Borrowers performing teaching services might be eligible for a cancellation credit that can be applied toward payments of loan principal and accrued interest. A teacher is defined as one who is a professional employee of a school system working on a full-time basis and is devoted to providing classroom instruction or related services in support of the educational program.

Handicapped Students - Teachers working in classes where the majority of the students are handicapped and in an institution providing elementary or secondary education as determined by state law.

Low Income - Teachers or staff members serving in public or nonprofit private elementary or secondary schools having high concentrations of students from low-income families. However, the school in which teaching service is performed must be included in the listing of schools having High Concentrations of Students From Low-Income Families, which is published in the Federal Register. (The High Concentrations of Students from Low-Income Families is a document compiled each year by the federal government from lists submitted by the individual states of schools designated by those states to have a high concentration of students from low-income families. Each state, however, is given a quota of schools to be listed and not all schools having high concentrations of students from low-income families will be listed. Only those schools listed will be considered for special cancellation benefits.)

Up to 100% of the student loan funds disbursed can be canceled for teaching service performed as detailed above in the following increments:

• 15% for each of the first two years of teaching service.
• 20% for both the third and fourth years of such service.
• 30% for the fifth year of service.

Preschool - Full-time staff member in a preschool program carried under section 222(a)(1) of the Economic Opportunity Act of 1964, as amended, that is operated for a period comparable to a full school year. Up to 100% of the outstanding loan principal balance. The applicant must be a full-time educational staff member, and must not earn more than a comparable employee working in the Local educational agency. Eligible for cancellation for 15% of the eligible funds for each year of service, up to 100% of the outstanding loan principal balance.

Military Cancellation Benefits:
Funds are eligible for cancellation at the rate of 12 1/2% per year for each full year of military service performed in an area of hostility (combat zone) after the funds are advanced. Maximum must not exceed 50% of the eligible funds.

* Cancellation Provisions For Loans Made On Or After July 23, 1992 Cancellation provisions include the following services:

1. Full-time special education teacher in a public or other nonprofit elementary or secondary school system, or full-time qualified professional provider of early intervention services in a public or other nonprofit program under public supervision.
2. A teacher of any field of expertise considered by the state education agency to have a shortage of qualified teachers (e.g., mathematics, science, bilingual education, foreign languages).
3. A full-time nurse or medical technician.
4. An employee of a public/private nonprofit child or family service agency who is providing or supervising the provision of services to "high risk" children and their families from low-income communities.

* Cancellation Provision For Loans Made After November 28, 1990

You can receive partial cancellation if you are a full-time law enforcement or corrections officer. Up to 100% of the Student Loan Funds disbursed can be canceled under this provision.

* Cancellation Provision For Loans Made On Or After July 1, 1987

You can receive partial cancellation for service in the Peace Corps or VISTA (4-year limit). The first two years - 15% each; third and fourth years - 20% each.

* Please Contact The Student Financial Services Office regarding information on Forbearance, Hardship, or Unemployment Deferments.