Budgeting
Now is a good time to come up with a monthly budget. Try making a chart with your monthly payments including mortgage/rent, utilities, transportation, groceries, entertainment, non-monthly expenses (car insurance, vacation, repairs, etc.), and your estimated loan payment (based on your chosen repayment option). Compare this to your expected monthly salary. Changing your spending habits now is an effective way to prepare for entering loan repayment. Make out a monthly budget and use the Direct Loan Program Budget Calculator http://www.direct.ed.gov .
Grace Period
In general, you must repay your loan even if you don't graduate, can't find work in your field of study, or are dissatisfied with the education program. Keep in mind that your Federal Stafford loan has a 6-month grace period after you graduate or drop below half time enrollment before your loan repayment period begins. You can only use your grace period once! Federal PLUS loans, however, do not offer a grace period.
Q: Can I start paying before my grace period ends or while I’m still in school?
A: Payments can be made at any time to Direct Lending. You can also make payments on the interest building on unsubsidized Stafford or PLUS loans.
Repayment
There are several different repayment options offered to you. Each of these options offers a different amount required for your monthly payment. You may find one of these repayment options will suit your needs better than the other. The Direct Loan Program allows you to change repayment options at any time. Get some information and try the Calculators & Interest Rates.
Q: How can I defer my loan payments?
A: You may be able to defer your payments if you are enrolled at least half time at an eligible school, studying full time at a graduate fellowship program or an approved disability rehabilitation program, unemployed or experiencing economic hardship, serving on active duty in the military during a war/national emergency, are a member of the National Guard or other reserve component of the USA military and are called to active duty within 6 months after having been enrolled.
Q: What if I can’t make my next loan payment and am not eligible for a deferment?
A: Contact Direct Lending about requesting forbearance. Forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. You can avoid defaulting on your loan with a little help and information on Deferment and Forbearance. Get Help!
Delinquency and Default
If you're having trouble making payments on your loans, contact the Direct Loan Servicing Center as soon as possible. The Direct Loan Servicing Center staff will work with you to determine the best option for you. Late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus), but this is much better than remaining delinquent on your payments and going into default.
Q: What is delinquency?
A: You are delinquent if your loan payment is not received by the due date. Delinquency can result in late fees and can be reported to one or more of the national credit agencies, causing a negative effect on your credit score.
Q: What is default?
A: Default occurs when you become 270 days delinquent in making payments on your loans. Going into default will result in you losing eligibility in the future for Federal Financial Aid, having to pay collection fees and possibly court costs, and an impact on your credit report at all national credit agencies.
Cancellations and Consolidation
Consolidating your loans into one loan can benefit you by giving you one monthly payment and extending your repayment period, resulting in lower monthly payments. You can even combine your old Stafford loans that you had through other lenders with your new existing loans through the Direct Loan Program! Got questions such as: Should I consolidate? How do I benefit? Am I eligible? Check out the Direct Loan Consolidation Program borrower information.
There are conditions for cancelling all or part of your loan.
Q: I am going to be a teacher. Can I get my loan cancelled? What if I work in public service? What if I become disabled, file bankruptcy, or die?
A: Call the Servicing Center (1-800-848-0979) for more information or to get a cancellation form. You can also find more information in your copy of the Borrower's Rights and Responsibilities Statement or on the "Other Forms" page at the Direct Loan Program Servicing Center's website.
Questions?
Please do not hesitate to ask questions!
Check your loan aggregates (total owed) at http://www.nslds.ed.gov
You can contact the Direct Loan Servicing Center at: 1-800-557-7394 or visit their website at http://www.direct.ed.gov
Stay in touch with ETSU and the Direct Loan Servicing Center—let us know if you've changed your name or permanent address, and make sure that the Direct Loan Servicing Center knows when you've completed your educational program or transferred to another school.
“Learn the Basics and Manage Your Debt” U.S. Dept. of Education
http://www.studentaid.ed.gov
Now is a good time to come up with a monthly budget. Try making a chart with your monthly payments including mortgage/rent, utilities, transportation, groceries, entertainment, non-monthly expenses (car insurance, vacation, repairs, etc.), and your estimated loan payment (based on your chosen repayment option). Compare this to your expected monthly salary. Changing your spending habits now is an effective way to prepare for entering loan repayment. Make out a monthly budget and use the Direct Loan Program Budget Calculator http://www.direct.ed.gov .
Grace Period
In general, you must repay your loan even if you don't graduate, can't find work in your field of study, or are dissatisfied with the education program. Keep in mind that your Federal Stafford loan has a 6-month grace period after you graduate or drop below half time enrollment before your loan repayment period begins. You can only use your grace period once! Federal PLUS loans, however, do not offer a grace period.
Q: Can I start paying before my grace period ends or while I’m still in school?
A: Payments can be made at any time to Direct Lending. You can also make payments on the interest building on unsubsidized Stafford or PLUS loans.
Repayment
There are several different repayment options offered to you. Each of these options offers a different amount required for your monthly payment. You may find one of these repayment options will suit your needs better than the other. The Direct Loan Program allows you to change repayment options at any time. Get some information and try the Calculators & Interest Rates.
Q: How can I defer my loan payments?
A: You may be able to defer your payments if you are enrolled at least half time at an eligible school, studying full time at a graduate fellowship program or an approved disability rehabilitation program, unemployed or experiencing economic hardship, serving on active duty in the military during a war/national emergency, are a member of the National Guard or other reserve component of the USA military and are called to active duty within 6 months after having been enrolled.
Q: What if I can’t make my next loan payment and am not eligible for a deferment?
A: Contact Direct Lending about requesting forbearance. Forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. You can avoid defaulting on your loan with a little help and information on Deferment and Forbearance. Get Help!
Delinquency and Default
If you're having trouble making payments on your loans, contact the Direct Loan Servicing Center as soon as possible. The Direct Loan Servicing Center staff will work with you to determine the best option for you. Late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus), but this is much better than remaining delinquent on your payments and going into default.
Q: What is delinquency?
A: You are delinquent if your loan payment is not received by the due date. Delinquency can result in late fees and can be reported to one or more of the national credit agencies, causing a negative effect on your credit score.
Q: What is default?
A: Default occurs when you become 270 days delinquent in making payments on your loans. Going into default will result in you losing eligibility in the future for Federal Financial Aid, having to pay collection fees and possibly court costs, and an impact on your credit report at all national credit agencies.
Cancellations and Consolidation
Consolidating your loans into one loan can benefit you by giving you one monthly payment and extending your repayment period, resulting in lower monthly payments. You can even combine your old Stafford loans that you had through other lenders with your new existing loans through the Direct Loan Program! Got questions such as: Should I consolidate? How do I benefit? Am I eligible? Check out the Direct Loan Consolidation Program borrower information.
There are conditions for cancelling all or part of your loan.
Q: I am going to be a teacher. Can I get my loan cancelled? What if I work in public service? What if I become disabled, file bankruptcy, or die?
A: Call the Servicing Center (1-800-848-0979) for more information or to get a cancellation form. You can also find more information in your copy of the Borrower's Rights and Responsibilities Statement or on the "Other Forms" page at the Direct Loan Program Servicing Center's website.
Questions?
Please do not hesitate to ask questions!
Check your loan aggregates (total owed) at http://www.nslds.ed.gov
You can contact the Direct Loan Servicing Center at: 1-800-557-7394 or visit their website at http://www.direct.ed.gov
Stay in touch with ETSU and the Direct Loan Servicing Center—let us know if you've changed your name or permanent address, and make sure that the Direct Loan Servicing Center knows when you've completed your educational program or transferred to another school.
“Learn the Basics and Manage Your Debt” U.S. Dept. of Education
http://www.studentaid.ed.gov
Look for more Financial Literacy information to come on hppt://www.etsu.edu/finaid
