Repayment Process   |   Deferment & Forebearance   |   Loan Consolidation
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Repayment of your student loans begin once you graduate, leave school, or drop below half-time. However, most loans have a six or nine month grace period from the point at which you become less than a half-time student to the point at which your first payment is due.

Grace Period
Both subsidized and unsubsidized Federal Stafford loan borrowers are entitled to receive a grace period. A grace period is a transitional period that gives you time to get your finances together before your first loan payment is due. Your grace period begins the day you drop below half-time enrollment status and lasts six months.

During the grace period, the federal government continues to pay the interest on subsidized Federal Stafford loans. Unsubsidized Federal Stafford loan borrowers, however, are responsible for payment of the interest from the first day funds are disbursed. Therefore, payment of the interest can be made in a couple of different ways. You can:

• pay the interest on a monthly or quarterly basis; or


• allow the interest to accrue and be capitalized into the principal balance of your loan.

Rights and Responsibilities
You have the right to prepay part or your entire loan obligation at any time without penalty. This can help reduce the total cost of your loan.

You may have the right to have your loan canceled in part or in its entirety if you:

• are unable to continue in your program of study because your school closed and no teach-out agreement was established;


• participate or participated in the National Service Trust Program; or


• become totally and permanently disabled or die.

The Federal Stafford loan forgiveness demonstration program also allows for the partial repayment of loans if you are a full-time teacher in certain elementary and secondary schools teaching certain subjects, a full-time nurse in certain types of hospitals or health care centers, or are a volunteer under the Peace Corps Act or ACTION Programs or perform comparable service in a tax-exempt organization. This program is subject to federal funding.

You must notify your lender immediately if any of the following occur:

• you change your address; or


• you change your name; or


• you change your telephone number; or


• you change your Social Security Number; or


• you change employment; or


• your employer's address changes; or


• you make any other changes that will affect your loan status.

Note: If you received a student loan other than the Federal Stafford and/or Federal SLS loan (for example, a William D. Ford Federal Direct loan or a Federal Perkins loan), this information will be helpful, but may not answer all of your questions due to the differences between the programs. Detailed repayment information on student loans other than the Federal Stafford or Federal SLS loans may be obtained from your lender.

Loan Default
If you do not take responsibility and repay your loan on time, it will become delinquent and possibly default. This has serious consequences and can be very damaging to your credit rating.

Defaulted loans are reported to national credit agencies, which can negatively affect your credit rating and ability to purchase a car or home in the future. In addition, the following can occur:

• you may lose future eligibility for financial aid and/or educational loans;


• the references you supplied on your loan application may be contacted;


• additional fees and interest may be charged to you;


• you may lose deferment and forbearance options;


• your federal and state tax refunds may be withheld and applied to your loan balance;


• your professional license renewal may be denied;


• your employer may withhold part of your salary for payment of your loan; and


• legal action may be taken against you.

And you will still have to repay your loan!

If you are having trouble making your scheduled loan payments, do not hesitate to ask for help. Don't wait until default occurs!