Borrowing
When you borrow federal student loans, you are postponing the need to pay college costs out of pocket by receiving financial assistance upfront. In return, you agree to repay the loan amount (plus interest, depending on the type of loan) after you graduate, leave school, or drop below half-time enrollment.
Eligibility Requirements:
- Must be a U.S. citizen or eligible non-citizen.
- Submit a valid and processed FAFSA for the award year.
- Not be in default on previous loans or exceed aggregate loan limits.
Types of Loans:
- Direct Subsidized Loans: Student borrows; government pays interest while in school.
- Direct Unsubsidized Loans: Student borrows; interest accrues while in school.
- Direct Parent PLUS Loans: Parent borrows; they are responsible for repayment.
Responsibilities:
- Borrow only what you need.
- Understand terms, conditions, and your rights/responsibilities.
- Complete Entrance Counseling and Master Promissory Note (MPN).
Repayment
When Repayment Starts:
- Begins after:
- Graduation,
- Dropping below half-time enrollment, or
- Leaving school.
- Includes a 6-month grace period before first payment is due.
- Repayment 101
Tips:
- Complete Exit Counseling
- Keep contact info updated.
- Track loan status at: https://studentaid.gov
- Learn more: Repayment Info
Deliquency
What Is Delinquency?
- Failing to make payments on time after entering repayment.
- Account is considered delinquent up to 270 days after missed payments.
If You’re Struggling:
- Contact your loan servicer immediately.
- Review options like deferment, forbearance, or income-driven plans.
- More info: Avoid Default
Default
What Is Default?
- Failure to make a payment for 270+ days.
- Loan becomes immediately due in full (“acceleration”).
Consequences:
- Tax refunds and federal benefits may be withheld (Treasury offset).
- Wage garnishment.
- Loss of deferment, forbearance, and repayment plan options.
- Ineligible for additional federal student aid.
- Negative credit report, harming your financial future.
- Possible legal action, added fees, and court costs.
- Transcript holds (school must still provide unofficial transcript on request).
Help Available:
- Contact the Default Resolution Group:
- 800-621-3115
- TTY: 877-825-9923
- More info: Get Out of Default
Options to Get Out of Default:
- Pay in full.
- Loan Rehabilitation: 9 on-time monthly payments.
- Loan Consolidation: Combine into one new loan.
- Income-Driven Repayment Plan (IDR).
