On February 7, 2018, this company was sued by the Federal Trade Commission for practices related to their student loan debt relief operation. The United States District Court entered a Preliminary Injunction Order on November 29, 2018, and appointed a Receiver to take possession and control of American Financial Benefits Center d/b/a AFB and AF Student Services, AmeriTech Financial, and Financial Education Benefits Center. The Receiver conducted an investigation, issued a report to the Court, and has permanently suspended operations of the businesses.

We recommend that you immediately contact your student loan servicer. A list of student loan servicers can be found at: For free information about repaying your federal student loans, go to

The Receiver has established a webpage with information about the lawsuit which will be periodically updated.

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  • a

  • Accrue
    To accumulate or receive. To be received by someone in regular or increasing amount over time. (Example: your loans will accrue interest under forbearance.)
  • Adjusted Gross Income
    Often shortened to AGI – the total taxable income minus specific reductions. Your AGI (no matter whether you file single or married) can be found on your Form 1040, 1040A, or 1040EZ. You can also see your AGI by requesting a tax return transcript at
  • Armed Forces Deferment
    Federal student loans go into deferment when the borrower is on active duty military service; this deferment has a time limit of three years.
  • b

  • Borrower
    The person who took out and is responsible for repaying a loan.
  • c

  • Collections
    Any loan that goes into default is automatically sent to a collections agency. These agencies are adamant about getting the money back and will contact you near daily.
  • College Cost and Access Act
    2007 introduced the College Cost Reduction and Access Act (CCRA). With some students becoming unable to make the necessary payments on their federal loans, this act increased forgiveness of such loans. After a former student has been employed for a decade with a branch of public service, the(...)
  • Consolidation
    The process of combining one or more loans into a single new loan.
  • Consolidation Loan
    The government allows students to consolidate any of the three federal loans into one debt. Throughout the entire consolidation, the interest rate does not change on the loan. To acquire a federal loan consolidation, the student must have one FFEL Loan or Direct Consolidation loan to apply.
  • Criminal History
    Students that have a criminal history may find it more difficult to obtain financial aid due to eligibility limitations. Those that are currently incarcerated in either a federal or state institution are not eligible for a federal student loan or grant. This may also apply to county jails, if(...)
  • d

  • Default
    Default happens when the borrower has failed to repay a loan. For the FFEL and Direct Loan programs, your loan will go into default if you fail to make a payment for 270 days, if you repay monthly (or 330 days, if your payments are due less frequently). Your lender will then report the default(...)
  • Default Collections
    A loan that has gone unpaid for at least 270 consecutive days enters into default. Student loan default rates have been on the rise in the United States over the past several years and the issue is becoming a major U.S. economic problem. This is what happens when your student loan enters(...)
  • Deferment
    This is something that federal student loan borrowers are entitled to. Deferment is a temporary suspension of payments on your loans. Though generally you are not charged interest on subsidized loans during your deferment, however, interest does accrue on unsubsidized loans and PLUS(...)
  • Department of Education
    Federal student loans are serviced by the Department of Education. Your loan repayment options will be handled through this department. Direct Loans through the Department of Education (as funded by the federal government) is known as The William D. Ford Federal Direct Loan Program. There are(...)
  • Direct Loans
    Student loans that are provided by the U.S. Department of Education to help students pay for education after high school. Students borrow directly from the Department of Education instead of private lenders. Direct Loans include the following types of federal student loans: Direct(...)
  • Disbursement
    A portion of a federal student loan that is paid to the student’s school account or the borrower directly. Students often receive their federal student loans in more than on disbursement instead of just one lump sum.
  • Discretionary Forbearance
    A discretionary forbearance is not a sure thing. It is granted at the discretion of your loan servicer. You can ask for a discretionary forbearance in the case of your illness or financial hardship.
  • Discretionary Income
    Often talked about when reviewing income-driven repayment plans. Discretionary income is when you subtract the poverty guidelines for your family size from your adjusted gross income.
  • e

  • Economic Hardship Deferment
    If you receive public assistance, serve in the Peace Corps, or make less than the minimum wage or poverty guideline, you may defer payments. To qualify for this deferment, your first loan must have been disbursed on or after July 1, 1993, and you must meet one of the following(...)
  • Exit Counseling
    The United States Department of Education ensures that all of its borrowers are well informed by providing them with exit counseling upon the completion of their education. This counseling is available on the internet at Your questions or concerns can be emailed to(...)
  • Extended Repayment Plan
    This plan can either have fixed or graduated payments, and can last up to 25 years. The purpose of this plan is to extend the repayment period beyond standard and graduated repayment plans.
  • f

    Stands for Free Application for Federal Student Aid. The FAFSA form will help determine eligibility for federal student aid and must be completed yearly. Much of it can be completed each year that the student is in school. There will be several questions regarding your personal and tax(...)
  • FAFSA Application Process
    To begin the FAFSA process of achieving financial aid through a federal student loan, you must go to the financial aid website and create a unique Personal Identification Number (PIN). It only takes a few minutes. Once your PIN has been issued, make sure to print it out or remember the number,(...)
  • Family Size
    A stated number that includes yourself, and your children (including unborn children who will be born during the year for which you certify), if the children will receive more than half their support from you. Your spouse is included in your family size for PAYE, IBR and ICR plans. For the(...)
  • Federal Loan
    As a Federal Loan are guaranteed by the government, they are easy to obtain for any student that is hoping to attend college. However, if a student defaults on one of these loans, they will not be eligible for any more until it is paid off.
  • Federal Perkins Loan
    Federal Perkins Loan has a fixed 5-percent interest rate that does not change during the 10-year repayment schedule. Similar to other loans, there is a grace period after no longer being enrolled at least half-time, but it is longer than most: nine months instead of six. Students that apply(...)
  • FFEL or Federal Family Education Loan
    Federal Family Education Loan Program. These loans are federal student loans that have been borrowed through private loan lenders but are guaranteed by the federal government. Federal Family Education Loans include the following types of federal student loans: Subsidized Stafford Loans,(...)
  • FSA ID
    An FSA ID consists of a username (or verified e-mail address) and password which gives you access to Federal Student Aid's online systems and can serve as your legal signature. You can login with your FSA ID  to check on your student loans at
  • g

  • General Forbearance
    A federal student loan benefit that borrowers are entitled to. Forbearance will temporarily stop your payments or reduce your federal student loan monthly payment. Interest will continue to accrue on all loans. You are given three years’ worth of forbearance time for each loan you take(...)
  • Grace Period
    A period of time that begins the day after the borrower either graduates, leaves school, or drops below half-time enrollment. The grace period usually lasts six to nine months. During the grace period, the borrower isn’t required to make payments.
  • Graduate Fellowship Deferment
    It is also possible to qualify for a Graduate Fellowship Deferment if you are enrolled in a Graduate Fellowship Program. This may depend on your course of study, as some medical internships and residencies do not defer student loans. To qualify, your program must provide financial assistance(...)
  • Graduated Repayment Plan
    This is a payment plan in which your payments start out low and increase every two years. Graduated Repayment Plan repayment periods from 10 to 30 years based on how much debt the borrower carries.
  • h

  • Higher Education Act of 1965
    The Higher Education Act of 1965 was signed into law on Nov. 8, 1965 by President Lyndon B. Johnson as part of his ‘Great Society’ domestic agenda. It was enacted “to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in(...)
  • i

  • In-School Deferment
    No matter what type of loan you received from the Federal Government, you qualify for in-school deferment as long as you stay enrolled at least half-time each semester. The Direct Loans, FFEL Loans, and Perkins Loans are all eligible for this deferment.
  • Income-Based Repayment Plan
    Commonly referred to as IBR. This is a repayment plan with monthly payments that are either 10% (if you are a new borrower) or 15% of your discretionary income.
  • Income-Contingent Repayment Plan
    Commonly referred to as ICR. This is a repayment plan with month payment that is the lesser of: What would you pay on a repayment plan with a fixed monthly payment over 12 years adjusted based on your income 20% of your discretionary income.
  • Interest Rate
    Interest rate is the percentage changed when you borrow money.
  • l

  • Loan Consolidation
    A Loan Consolidation is when you take multiple loans and consolidate them into one new loan. If you consolidate your defaulted loan with another loan, this will remove the defaulted status. However, this could have a negative impact on your credit score. It is possible to have a(...)
  • Loan Forgiveness
    this is the removal of a borrower’s obligation to repay a loan while they still have outstanding payments. Loan forgiveness can be granted in certain circumstances, such as completing the terms of an income-driven repayment plan.
  • Loan Rehabilitation
    Commonly referred to as Loan Rehab. This is a mutually agreed upon payment schedule between you-the-borrower and the U.S. Department of Education. They may add fees, but this will remove your student loan from default status. The payments are typically lower and your credit history is cleared(...)
  • Loan Servicer
    This is the company that handles the billing and other services on federal student loans. They collect the interest on your loans and this is the company you make your student loan payments to.
  • m

  • Mandatory Forbearance
    If you meet the eligibility criteria for forbearance, it is mandatory for your lender to grant a mandatory forbearance. You will be granted a mandatory forbearance if you: Serve a medical or dental internship or residence Owe 20-percent or more of your total monthly gross income for(...)
  • Military Deferment
    This deferment is available in all three loan programs, FFEL, Direct and Perkins. It is available to military service members on active duty during a war, other military operation or national emergency, members of the National Guard called to active duty during a war, military operation or(...)
  • n

  • National Student Loan Data System
    Commonly referred to as NSLDS. This is the central database for student aid. Through NSLDS the borrower can look at the status and history of each loan they’ve had. NSLDS receives data from schools, guaranty agencies, and other Department of Education databases.
  • Negatively Impacted Credit History
    Having a default on your credit history will basically ensure that you won’t be able to obtain new credit. This will make it difficult to obtain a car, home, or even a credit card.
  • o

  • Online Web Portal
    The Online Web Portal ensures easier access and editing of your loan information. Through this portal, provided by the federal government or your loan servicer, you can receive the exit counseling that was discussed earlier in this chapter, as well as tools for maintaining your loan, such as(...)
  • p

  • Partial Financial Hardship
    This is an eligibility requirement for the income-driven repayment plans. You have a partial financial hardship when the annual amount due on all of your eligible loans exceeds what you would pay under PAYE or IBR.
  • Pay As Your Earn
    Commonly referred to as PAYE. The Pay As You Earn repayment plan with monthly payments that are generally equal to 10% of your discretionary income.
  • PLUS Loans
    PLUS loan stands for Federal Parent Loans for Undergraduate Students. These loans are taken out by the student’s parents on behalf of the student. PLUS Loans are federal loans available to the parents of students who attend college on at least a half-time basis. Similar to Stafford Loans,(...)
  • Principal
    Sometimes referred to as principal loan amount. The loan amount you borrowed plus any interest.
  • Public Service Loan Forgiveness
    Commonly referred to as PSLF. The Public Service Loan Forgiveness Program forgives the remaining loan balance after 120 qualifying monthly payments under a qualifying repayment plan (IDR or Standard Repayment plans) while working full-time for certain public service employers. Qualifying(...)
  • r

  • Repayment
    Repayment is the borrower making their monthly payments to their loan servicer.
  • Repayment Period
    The amount of time over which the borrower is to repay federal student loans. The repayment period may range from 10 years to 30 years depending on loan amount, repayment plan, and loan types.
  • Revised Pay As You Earn
    Commonly referred to as REPAYE. Revised Pay As You Earn repayment plan with monthly payments that is generally equal to 10% of your discretionary income.
  • s

  • Stafford Loan
    The interest rate on Stafford Loans is lower than most other loans because the federal government guarantees these loans. While enrolled in school at least half-time, the student does not have to make any payments. The payment schedule begins six months after the student has either left school(...)
  • Standard Repayment
    Standard repayment is what the borrower is automatically placed in. Standard Repayment lasts for 10 years and is a fixed monthly amount that is at least $50.
  • Subsidized Loan
    A federal student loan for which a borrower is not generally responsible for paying the interest while in an in-school, grace, or deferment period. A student who proves great financial need may receive a subsidized loan. While the student is enrolled at least half-time, the interest will be(...)
  • t

  • Tax Return Withholding
    Tax Return Withholding happens while in default status, your tax returns will be completely withheld to pay towards any outstanding student loan debt currently in default. While it’s possible that you can pay off the entire default amount this way, it’s unlikely.
  • TEACH Grant
    Teacher Education Assistance for College and Higher Education Grant – commonly referred to as TEACH Grant. Provides funds to students who are completing or who plan to complete coursework that is required to begin a career in teaching, and who agree to teach full-time for at least four years.
  • Title IV Aid
    The programs authorized under Title IV of the Higher Education Act are the major source of federal student aid. Title IV programs include: Loans Federal Family Education Loan (FFEL) Direct Loan Federal Perkins Loan Grants Federal Pell Grant Academic Competitiveness Grant(...)
  • Tuition
    Tuition is the sum of money charged for the teaching and/or instruction by a school.
  • u

  • Undergraduate Student
    Undergraduate student, or undergrad, is a student who is enrolled in school but has not yet earned a bachelor’s or equivalent degree.
  • Unemployment Deferment
    If you have become unemployed while out of school or find yourself working less than 30 hours per week, you may qualify for an Unemployment Deferment.
  • Unsubsidized Loan
    A federal student loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Includes Direct Unsubsidized Loans (made through the William D. Ford Federal Direct Loan Program) and Unsubsidized Federal Stafford Loans (made through the Federal Family(...)
  • w

  • Wage Garnishment
    The loan collector can garnish your income once you have gone into default. This means that 15 percent of your discretionary income will be paid directly to the collection agency.
  • William D. Ford Direct Loan Program
    William D. Ford Direct Loan Program – sometimes referred to as the Direct Loan Program or even “Obama Student Loan Forgiveness” which is a nickname and not an actual program. Student loans provided by the U.S. Department of Education to enable a student to pay for education after high school.(...)