The Student Assistance Corporation is a company that provides default prevention services to student loan guarantors. The company has been in business for over 20 years, and its services have prevented millions of dollars of student loan defaults.
The company offers different solutions to aid in preventing student loan defaults. These options include deferment, forbearance, different payment options and consolidation. Deferment is where scheduled student loan payments are allowed to be postponed for certain qualified reasons, such as unemployment, economic hardship and enrollment in school. Forbearance is the temporary reduction or postponement of payments for a period of time agreed upon by the student and the lender. Interest continues to accrue on loans under forbearance.
With different payment options, students can extend the period over which their loan is repaid, make a monthly payment that is more geared to their income or provide payments that are smaller at the beginning of the repayment period and step-up at prescribed intervals. Consolidation is the pooling of all student loans into one new loan, often at a lower interest rate. Each of these repayment options come with the net result of increased borrowing costs for the student.