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Financial Aid Rights Responsibilities

Financial Aid Rights Responsibilities

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Financial Aid Rights & Responsibilities

College students who undergo financial loans»» for they're college education should remember that they have both Financial Aid Rights and Financial Aid Responsibilities. I know this may sound like a "well dua" statement, but when you borrow money for your college education through a loan, you enter into a legal agreement with your lender. This agreement creates the requirements you must uphold and the services your lender must provide. It's important to evaluate and make sure you understand your rights and responsibilities before you put your signature on the computer generated line.

You have the right to receive a disclosure statement that details the principle amount»» of your loan and your interest rate (variable rates»» may change each year).

You should receive a repayment schedule outlining the amounts and the due dates of payments and you should receive your schedule before repayment begins.

Students borrowing money will receive a Notification of Loan Transfer»» in the event that their lender sells or transfers their loan to another holder.

You may also receive a choice of repayment options. Depending on your loan, you may choose a repayment plan that spans a period as short as five years or as long as 30 years. You may also repay your loan in full, or in any amount greater than your scheduled monthly payments at any time without penalty.

Some students are also eligible for deferment»». Borrowing through the Federal Family Education Loan Program (FFELP) gives you the option of postponing repayment under specific conditions. If you are eligible, you may apply for a deferment. If you do not qualify for a deferment, you have the right to request Forbearance»»

Most lenders require that a student applying for a loan have a College Entrance Interview or a Introduction To College course before receiving your first loan disbursement. Both the College Entrance Interview and Introduction To College course you attend may include details of your loan rights, legal obligations, and repayments options. You will also learn about debt management to help you borrow wisely and keep your credit in good check.

The repayment of your loans is the biggest responsibility you have when you take out a loan. You are required to pay back all of the money borrowed, plus interest. You must repay your loan regardless of whether or not you are satisfied with your education, pass your courses, graduate from school, or get the job you want. Making payments on time is vital.

Communication is essential! By keeping in contact with your lender you will ensure that you never miss a payment and you are up to date with all you're your loan details.

Notifying your lender of any changes in your personal information (name, social security number, phone number, address, school, enrollment or academic standing, graduation date, employer, etc.) is just as important as making on time payments.

Exit interviews - Before you graduate, leave school, or drop below half-time status, you must attend an exit interview. You will be advised about repayment options and requirements, including details about your rights and responsibilities. It doesn't take long, but it helps you understand exactly how your loan program works.

Taking out a loan is a big responsibility, but it is also important for you to know that you have rights, too. For most students, taking out a loan is a necessary part of going to college. Making sure that you have all of the facts is crucial before you take on a long-term commitment with responsibilities.

As a borrower, you have the right to:

  • The full amount of the loan
  • The interest rate
  • The date you must start repaying the loan (based on the anticipated graduation date recorded on the promissory note)
  • A complete list of any charges you must pay (loan fees) and information on how those charges are collected
  • Information about the yearly and total amounts you can borrow
  • Information about the maximum repayment periods and the minimum repayment amount
  • An explanation of default and its consequences
  • An explanation of available options for consolidating or refinancing your loan
  • A statement that you can prepay your loan (in full) at any time without penalty
  • You have the right to a grace period before your repayment period begins. (Your parents do not receive a grace period for a PLUS Loan.) Your grace period begins when you leave school or drop below half time status.
  • A loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.
  • If you or your parents borrow under the FFEL Program, you (or your parents, for a PLUS Loan) must be notified when the loan is sold if the sale results in making payments to a new lender or agency.

Credit Your Loan Account

Your school must notify you (or your parents, for a PLUS Loan) in writing whenever it credits your account with Stafford Loan, PLUS Loan, or Perkins Loan funds. This notification must be sent no earlier than 30 days before, and no later than 30 days after, the school credits your account.

Cancel All or A Portion of The Loan

You (or your parents, for a PLUS Loan) may cancel all or a portion of the loan by informing your school within 14 days after the date your school sends this notice, or by the first day of the payment period, whichever is later. (Your school can tell you the first day of your payment period.) If you or your parents receive loan funds directly by check, the funds may be refused by returning the check.

Exit College Counseling For Direct or FFEL Stafford Loans

If you have Direct or FFEL Stafford Loans, your school will also provide the following information during exit counseling:

  • A current description of your loans, including average monthly anticipated payments
  • A description of applicable deferment, forbearance, and discharge provisions
  • Repayment options
  • Advice about debt management that will help you in making your payments
  • Notification that you must provide your expected permanent address, the name and address of your expected employer, and any corrections to your school's records concerning your name, Social Security Number, references, and Driver's License number

Take the next step towards a rewarding career.»»


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