Responsibilties

Your responsibilities as a federal student loan account holder, from the federal guidelines set down by the U.S. Department of Education.

(Source: Student Guide, 2000-01 – U.S. Dept. of Education)

1. When you sign a promissory note, you are agreeing to repay the loan according to the terms of the note. The note is a binding document and states that except in cases of loan discharge/cancellation, you must repay the loan even if you do not complete your education; are unable to find a job after you complete the program; or are dissatisfied with, or do not receive the education you paid for.
2. You must make payments on your loan even if you do not receive a bill or repayment notice. Billing statements are sent to you as a convenience, but you are obligated to make payments even if you do not receive any reminders.
3. If you apply for a deferment or forbearance, you must continue to make payments until you are notified the request has been granted. If you do not, you may end up in default.
4. You should keep a copy of any request form you submit, and you should document all contacts with the organization that holds your loan.
5. You must notify the appropriate representative of the organization that manages your loan when you graduate; withdraw from school or drop below half-time status, change your name, address or SSN; or transfer to another school.
6. You should receive entrance counseling before you are given your first loan disbursement and exit counseling before you leave school. These sessions will be administered by your school and will provide you with important information about your loan.
7. If you default on your loan, you should be aware of all the consequences your creditor may impose, which include: receiving a poor credit rating; your employer may be asked to deduct payments from your pay check; the IRS may take back your tax refund; your professional license may be revoked; and if you ever decide to go back to school and need a loan, you may never receive it. So, make your payments and send them as scheduled.

Here are a few things to remember about managing your student loan debt for federal student loan borrowers:

Explore all your repayment options: The repayment plan you choose depends on the career path you take. Whether you join the private sector, government or volunteer work, you have to consider the amount of money you will be paying on your student loan in relation to your salary.

Consider loan consolidation: If you have multiple loans, loan consolidation may be your best repayment option. Consolidation allows you to make a single payment monthly regardless of the types of loans you have. Click here to be  taken to GRC’s Loan Consolidation Application.

Deferment and Forbearance: You may qualify for options such as deferment entitlements and forbearance. These allow you to temporarily postpone payments on your loan. Depending on whether your loan is subsidized or unsubsidized, you may or may not have interest accrue during the deferment. Keep in mind that you cannot receive a deferment or forbearance if your loan is in default.

Avoid defaulting on your loan at all costs: Defaulting means you failed to repay a loan according to the terms you agreed to when you signed a promissory note. Default may also result from failing to submit enrollment forms, submit requests for deferment or cancellation on time. If you default on your loan, your creditor or the federal government may take action to recover the money owed. These actions may include notifying national credit bureaus of your default or contracting with a third-party servicer to collect on your loan. Either way, the consequences can be costly to you.