As a federal loan borrower, you are entitled to many rights such as the right to know all of your loan particulars such as when you need to start to pay off the graduate loan, who owns your loan, interest rate, repayment plan options and more. Naturally, by borrowing money and agreeing to repay it, you are equally bound by responsibilities during the life span of the graduate loan.
Your Rights
Before your school makes your first loan disbursement, you must receive the following information about your federal student loan from your school, lender, and/or the Direct Loan Servicing Center:
Before you leave school, you will receive the following information about your federal student loan (as part of "exit counseling") from your school, lender, and/or the Direct Loan Servicing Center:
Think about what your repayment obligation means before you take out a loan. If you don't repay your loan on time or according to the terms in your promissory note, you might go into default, which has serious consequences and will affect your credit rating.
You must make payments on your loan even if you don't receive a bill or repayment notice. Billing statements (or coupon books) are sent to you as a convenience, but you're obligated to make payments even if you don't receive any reminders. You must also make monthly payments in the full amount that your repayment plan has established. Partial payments do not fulfill your obligation.
If you apply for a deferment or forbearance, you must continue to make payments until you're notified the request has been granted. If you don't, you might end up in default. You should keep a copy of any request form you submit, and you should document all contacts with the organization that holds your loan.
You must notify your loan servicer when: you graduate; withdraw from school; drop below half time status; change your name, address, or Social Security Number; or transfer to another school.
For Direct or FFELP Stafford Loans, you must complete "entrance counseling" before you receive your first loan disbursement, unless you've previously borrowed a Stafford Loan. No matter what type of federal student loan you have, you must receive "exit counseling" before you leave school. Your school will provide the counseling and important information about your loan. Your lender will give you additional information.
Another resource for you is the Federal Student Aid Ombudsman of the Department of Education. This person helps resolve disputes and solve other problems with federal student loans.
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