When you graduate from a program or your enrollment drops below half-time, your change in enrollment is reported to your lender(s) and you enter into your grace period. Â You will be contacted by your lender(s) regarding repayment. To access a complete list of your Federal Loans (Stafford, Parent PLUS, Perkins), visit www.NSLDS.ed.gov. This site will give you the following information:
- Type of Loan
- Loan Amount
- Loan Date
- Disbursed Amount
- Outstanding Principal Balance
- Outstanding Interest
- Loan Status
- Contact Information for Current Servicer, Lender, and Guaranty Agency
There are several options in order to repay your loan(s):
Your lender is the best person to speak to regarding your repayment options. They can assist you in selecting a method of payment and due date that works for you.
You must repay your federal student loan. If you fail to make the required payments on your federal student loan and the account becomes delinquent by a specific number of days (depending on the type of loan you borrowed), it is in default. Once the loan is in default, the entire balance (principal, interest, and collection fees) is immediately due and payable.
You CAN prevent default:
- Don't borrow more than you need or more than you expect to be able to repay. Develop a soundâ€”and realisticâ€”financial plan.
- Make your loan payments on time, and notify your lender or servicer when you move or change your address.
- Contact your loan holder immediately if you start to have problems repaying. They may be able to provide you with some financing options and give you information about Â deferments and forbearance.
- Keep a record regarding your loan. Make copies of all letters, canceled checks, and any forms you sign.
- Five Easy Steps for Financial Success
There are severe consequences if you default on a student loan:
- You can be sued for the entire amount of your loan.
- Your credit rating can be severely damaged, making it difficult to borrow money for a car or home, or to receive credit cards. The default status can remain on your credit report for several years after you pay the loan in full.
- Your federal Treasury payments, federal tax refunds, & state income tax refunds may be withheld.
- Your disposable income can be garnished without a court order.
- You won't be eligible to receive any more federal financial aid (and possibly state aid) unless you make acceptable arrangements to repay what you already owe.
- You may be ineligible for assistance under most federal benefit programs.
- You'll be ineligible for deferments or forbearance.
- You'll be liable for the costs associated with collecting your loan (could be as much as 25 percent of your principal and interest balance), plus court costs and attorney fees.
- You may not be able to renew a professional license you hold or may jeopardize your chances for certain types of employment.
- Your loan may be assigned to a professional collection agency.