Student Exit Loan Counseling Information
When you leave school (or drop below half-time), the federal government asks us to review certain basic information with you about your federal student loans. You must repay your student loan, even if you do not graduate, or if you are dissatisfied with your academic program at USU. You must start repaying your loan when you leave school or drop below half-time (six credit hours for undergraduate and graduate students). Now that you are paying back your student loan, managing your finances is even more important than when you were a student. More information about budgeting and financial literacy.
What are my responsibilities concerning my student loans?
As a borrower, you are required to:
- Repay your loan according to the repayment schedule.
- Notify your loan servicer within ten days when you graduate, withdraw from any school, drop below half-time, transfer to another school, change your name or social security number.
- Notify your loan servicer of anything that affects your ability to repay or your eligibility for deferment or cancellation.
- Notify your loan servicer if you fail to enroll for the period covered by the loan.
- Notify the school and the loan servicer of a change in address.
- Complete exit loan counseling before leaving school:
Direct Loan Exit Counseling.
Perkins Loan Exit Counseling.
Who is my loan servicer?
You can find out who is servicing your loans by logging into www.nslds.ed.gov with your FAFSA pin number. Click on “financial aid review” to get started. If more than one agency is servicing your loan you will need to work with each them individually.
How much is it going to cost to pay it all back?
Even though student loans have relatively low minimum payments, your payments will be determined by the amount you borrowed. The average Stafford loan for graduating seniors at Utah State University is currently $9,000 to $17,501. Assuming 6.8% interest, the corresponding monthly payment would be approximately $104 to $201 for ten years. Your loan servicer will tell you the amount of your payment.
What are my options if I have difficulty making payments?
Your first option is to apply for a deferment. Deferment is a period when the payment on your principle is postponed. Interest continues to accrue during periods of deferment, however, if you have a subsidized Stafford loan, the government will make those interest payments for you. Borrowers of unsubsidized loans must make the interest payments or they will be capitalized (added to the principle amount that you owe). Generally, students in school at least half-time are eligible for deferment. There are other conditions such as hardship and public service that merit deferment. Normally you must repay your student loan within ten years; deferment periods are not included in that ten-year period. Check with your loan servicer to see if you are eligible for deferment.
Your second option is to apply for forbearance. Forbearance is the temporary stopping of payments, the making of smaller payments, or an extension of time for making payments. Interest on your loan continues to accrue during periods of forbearance. Forbearance is usually granted at the discretion of the loan servicer. Check with them first. If they say no, try contacting your guaranty agency. All these institutions are eager to help you stay out of default and will try their best to help. More information on deferment and forbearance.
In some cases, your loan can be forgiven. This means that neither you, your family, nor a cosigner would have to pay back the loan. In the case of a permanent and total disability or death of the borrower, student loans are cancelled. The Army and National Guard also offer loan repayment programs, which repay a portion of your loan for every year in service. More information on loan discharge.
When it comes time to start repaying your student loan(s), you can select a repayment plan thats right for your financial situation. Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose. More information on repayment options.
What is Loan Consolidation?
If you are making payments on federal loans from more than one servicer or from different loan programs, you can combine all your loans into one new loan. This will make your life a little easier since you will only have one payment to make, and it might make it possible to spread your payment over a longer period of time. However, the interest rate may be slightly higher than your original loan, and stretching out the payments means paying more interest over the life of the loan. More information on consolidation.
What are my rights as a borrower?
As a borrower, you have the right to:
- Before repayment begins, information on interest rates, fees, the balance owed on loans, and a loan repayment schedule; (check with you loan servicer about when you can expect this information).
- Written information on loan obligations, including loan consolidation and refinancing, and information on borrower rights and responsibilities.
- A copy of the promissory note and the return of the original note when you pay the loan in full.
- Notification if your loan has been sold or transferred to a new holder or servicer.
- Prepayment of the loan without penalty.
If you qualify, you also have the right to:
- Federal interest subsidies (subsidized Stafford and Perkins loans).
- A grace period.
- Deferment under certain conditions.
- Request forbearance (the loan servicer has the discretion to grant or deny forbearance).
- You may also qualify for some tax benefits.
What records do I need to keep? Your promissory note (and other papers).
In addition to your promissory notes, you should also keep copies of your disclosure statement, deferment and forbearance requests, and records of any payments, discussion or correspondence you have with your loan servicer concerning your loan. There are several different organizations involved with your loan including the Financial Aid Office and your loan servicer and they can make mistakes. But even if they make mistakes, the legal responsibility for repaying your loan is yours. Keep accurate records so you can make sure everything is right.
Student Loan Ombudsman
The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans. Before contacting the Ombudsman Group, be sure to follow our recommendations to resolve problems with your student loan yourself. If you have tried to resolve the problems with your loan but haven’t been able to, get prepared before seeking the Ombudsman Group’s help.
Contact information for Student Loan Ombudsman Group:
Phone: (877) 557-2575
Fax: (202) 275-0549
U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E.
Washington, DC 20202-5144