Repayment of Loans

Entering repayment

The amount(s) you borrowed under the Federal Stafford Loan programs must be repaid. When you leave school, cease to be at least a half-time student, or graduate, each loan enters a six-month grace period before actual repayment begins. Subsidized Stafford Loans do not accrue interest during the six-months; Unsubsidized Stafford Loans continue to accrue interest during this six-months. There is only one six-month grace period per loan.

Who owns your loans?

Students applying for loans at Lesley University after December 11, 2008, are borrowing through the William D. Ford Direct Loan Program, which means the loans are borrowed directly from the Federal Department of Education. You can contact Direct Loan Servicing at 1-800-848-0979, or you may access your account information on the Direct Loan borrower website.

Students who borrowed Stafford Loans at Lesley University and completed your applications before December 11, 2008 borrowed through private lenders. Most of these loans are serviced by SallieMae Loan Servicing, Inc. If Sallie Mae is your servicer, you can contact their customer service at (888) 2SALLIE, or you may access your account information on Sallie Mae's website.

If you borrowed from a private lender who does not use Sallie Mae for servicing, please contact your lender for information about repaying your loan. Please note that private lenders may sell your loan. If you are unsure who owns your loans now, the National Student Loan Data System (NSLDS) is a secure database updated by all lenders. You can use it to find up to date information about your lenders, outstanding balances, and loan statuses.

Consolidation

Some students choose to combine their federal loans at the time of graduation to simplify the repayment process. This is called "consolidation". There is some good information on this Department of Education website to help you decide if consolidation is right for you.

Interest rate

The interest rate on Stafford Loans is set by Congress annually, effective each July 1. The rate is capped at 8.25%. Subsidized Stafford Loans borrowed by undergraduate students during the 2008-2009 academic year have a fixed rate of 6.0%. All other Stafford loans borrowed during the 2008-2009 academic year have a fixed rate of 6.8%.

Subsidized Stafford Loans borrowed by undergraduate students during the 2009-2010 academic year have a fixed rate of 5.6%. All other Stafford loans borrowed during the 2009-2010 academic year have a fixed rate of 6.8%.

Repayment options

There are three repayment plans available for borrowers. A Standard Repayment Plan requires you to pay a fixed amount each month, at least $50 or the interest that has accrued. A Graduated Repayment Plan allows you to have lower payments at first that will increase over time. Last, the Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Your payments will rise or fall dependent on changes in your income. For both the Graduated and Income-Sensitive Repayment Plans, each payment must be at least equal to the amount of interest accrued between scheduled payments.

Obligation to repay

Remember, you have the obligation to repay your loans, even if you do not finish your education, were not satisfied with your education or the school's services, or did not find a job. You are also obligated to make monthly payments even if you do not receive a statement. Because of this, it is very important for you to keep your lender or loan servicer up to date with any changes in your status, such as address or name changes.

Update lender/servicer with any change in status

It is very important for you to keep your lender servicer up to date with any changes in your status, such as address changes, telephone number, e-mail, social security number, or name changes. In fact, under the terms of your loan, you are required to report such changes within 10 days of when they occur.

Consequences of default

Failure to pay your student loan can have serious consequences. If you default on your loan, the lender, loan servicer, or guarantor of the loan can take action to recover the money, and will report your default to a credit agency. Default can affect your ability to receive credit, or to receive any future student financial aid.

DEFERMENT, FORBEARANCE AND CANCELLATION INFORMATION

Deferment

Deferment allows you to temporarily postpone payments on your loan, typically due to enrollment at least half-time in an eligible academic program, military service, or economic hardship. You should contact your lender or loan servicer for complete information on deferments.

Forbearance

Forbearance may be granted in circumstances where you are temporarily unable to meet your loan repayments and do not otherwise qualify for deferment. Examples include illness, dental or medical internship or residency, or service under the National Community Service Trust Act of 1993. You should contact your lender or loan servicer for complete information on forbearance.

Cancellation

Cancellation of Federal Stafford Loans is limited to specific circumstances, such as death or total disability. In certain circumstances, a portion of your loan may be cancelled in exchange for teaching or childcare in designated low-income communities. You should contact your lender or loan servicer for complete information on cancellation.

RESOLVING PROBLEMS WITH YOUR LOANS

In general, your lender should be the first point of contact for any questions about your loans once they enter repayment. The resources below may also be useful to you.

National Student Loan Data System

The National Student Loan Data System (NSLDS) can be a good source of information about your loans. If you are confused as to who owns your loans or the repayment status of your loans, this website is a place to start. From here, you can find contact information for lenders and servicers associated with your loans.

Federal Ombudsman

If you have problems with your lender, school, or loan servicing agency, you must attempt to resolve those problems with that agency first. The Ombudsman's Office is a resource for borrowers when other approaches to resolving student loan problems have failed. The Ombudsman's Office may be reached at (877) 557-2575, or online.