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.

Interest rate

The interest rate on Stafford Loans is set annually each July 1. The rate is capped at 8.25%. Loans Borrowed during the 2006-2007 and 2007-2008 academic years 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.

Use of master promissory note

If you borrowed a Stafford Loan for a current or previous academic year while at Lesley University, your loan was processed using a Master Promissory Note (MPN). The MPN enables borrowers to utilize one promissory note for any Stafford Loans borrowed through the same lender, for up to a 10 year period. (If the MPN you signed was more than 10 years ago, you will need to complete a new MPN upon entering a new academic year.) Your MPN may be re-used if you borrow additional Stafford funds within the 10-year period, provided you remain with the same lender. Also, your lender will align any prior loans for which you have already used up a grace period, by granting an administrative forbearance, so that the repayment schedule on all your prior loans will coincide with your new loans.

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.

Additional information about repayment

The SallieMae web site is an excellent resource that contains many useful features, including repayment calculators, which allow students to project what their monthly loan payments will be, tips on budgeting/debt management, and information regarding consolidation of loans.