LOANS AND GRANTS

As you know, all student loans, whether federal or private loans, must be repaid. Once you have taken any loan, there are some important things for you to keep in mind:

• When you take a federal student loan you are agreeing to pay back the amount you borrow (loan principal) and any accumulated interest.
• The first payment will be due six months after you graduate, enroll less than half-time, or withdraw from school.
• If you have trouble repaying your federal student loan, for reasons such as low income, loss of job, etc. you may be eligible for a period of deferment or forbearance, during which no principal payments are due. In certain cases, the interest will accrue and capitalize, in others the interest will be paid by the Federal Government.
• If you fail to make payments on your Federal student loan for nine months (twelve months if your lender is Direct Loans), you will be considered in default. If you default, you will be turned over to a collection agency and reported to a credit bureau, potentially impairing your ability to apply for credit and preventing you from obtaining future student aid. In addition, the entire loan balance will become due immediately and any future income tax refund may be withheld to satisfy the debt to the government.