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In 1965, the Vermont Student Assistance Corporation was founded to help college students in the state of Vermont obtain funding for college. VSAC was a nonprofit organization that served as a vendor and servicer for student loans.
In this review:
- About VSAC
- VSAC Student Loan Information
- Pros and Cons of VSAC Student Loans
- Can You Refinance VSAC Student Loans?
- Alternatives to VSAC Loans
Due to federal student loan changes in the wake of the 2008 recession, the U.S. Department of Education discontinued the Federal Family Education Loans program, a primary income stream for VSAC, after which the company decided to transfer its federally held loan accounts to Nelnet in August 2016.
Today, VSAC provides “state-issued” loans, such as the Vermont Advantage Loan, with potentially lower interest rates than Federal PLUS loans, state grants, and scholarships. These forms of financial aid are underwritten by state government bonds, so they are not offered directly by private student loan companies.
VSAC still continues to provide career and financial guidance, except with a narrower scope due to a lack of federal funding. All federal borrowers who used to make their monthly student loan payments to VSAC now make them to Nelnet instead. If students are unsure of their student loan servicer, they can access their servicer information through the National Student Loan Data System (NSLDS).
VSAC Student Loan Information
Even though VSAC servicing is now done by Nelnet, the repayment terms and options are the same. While you’re in school, your loans can be deferred until six months after graduation or after you drop below half-time. However, you can make payments to Nelnet while you’re still in school if you like.
Repayment terms are flexible, with standard and income-driven repayment plans available through Nelnet. Those employed in the public service sector can also still apply for Public Service Loan Forgiveness as well. It’s important, however, to request Nelnet as your servicer during the application process.
In order to be eligible for a Nelnet-serviced student loan, you need to be a U.S. citizen or legal permanent resident. Vermont residents attending school in-state are eligible, although you can be from another state and attending in Vermont.
Vermont Advantage Loans for Students
The Vermont Advantage Loan, serviced by Nelnet, comes with a fixed as low as 5.90% APR. It also offers access to an Advantage Loan Coach for ongoing support; personalized counseling from your coach can help you set up for repayment in a smart way.
To apply, you’ll need a qualified cosigner, such as a parent or grandparent. You’ll also need to complete the Free Application for Federal Student Aid (FAFSA).
Vermont Advantage Loans for Parents
The parent version of the Vermont Advantage Loan allows parents to borrow for their child’s education. The interest rate is the same as the student loan — as low as 5.9% APR — and provides the same access to the Advantage Loan Coach. In addition, the loan can be canceled in the event of the student’s death.
Parents must be creditworthy; the approval is based largely upon the applicant’s credit history. The FAFSA also needs to be filled out before applying.
Pros and Cons of VSAC Student Loans
The ease of application and flexibility of repayment makes VSAC loans a great option for Vermont students and their families. The restructuring of the company into Nelnet, however, makes things a bit more complex; knowing what Nelnet handles and what VSAC offers can be confusing.
The interest rates of 5.9% APR are also not as low as other lenders; you may be able to get a better rate elsewhere with some research.
Can You Refinance VSAC Student Loans?
If you have a solid credit history — and can show that you’ve made your monthly payments on your existing loans — then you may be able to refinance your VSAC loans. Both fixed-rate and variable-rate loans are available; you should talk to your servicer about what options are open to you.
When you refinance or restructure, you need to specifically request that Nelnet remains your servicer for the new loans. If you started with a variable rate and are now looking for more of a fixed rate with a flat monthly payment lower than what you’re currently paying, you may consider an income-driven repayment plan, which is also possible with Nelnet.
Before you do consolidate, refinance, or restructure, you’ll want to make sure you understand the terms of your current loan. Student loan refinancing or otherwise using a new loan will not only pay off your existing loans, but it will also end any access you have to other repayment and forgiveness options, especially if you consolidate federal, state, and private loans.
Alternatives to VSAC Loans
VSAC isn’t the only option you have available to you as a Vermont college student. You can still get a number of federal loans, as well as additional financing from private lenders across the United States. Each lender has its own eligibility criteria and loan repayment options, and some have decidedly inflexible repayment plans.
You can also stay away from all student loans except as a last resort; the number of scholarships available in the U.S. can help defray your educational costs in a way that doesn’t require repayment at all. Grants are also available, both from the federal government and from state or local, third-party sources.
VSAC and Nelnet can offer some great options for Vermont students and parents. They’re not, however, the only option. Take the time to explore all of your opportunities before signing any dotted lines. The decisions you make about your college funding now will affect your financial health for years to come.
Author: Jeanette Perez