Repaying your loan

Your obligations for repayment of your loan

Please be aware that repayment of federal loans is a very serious obligation. You are required to make your student loan payments even if you:

• don't finish your education
• are not in employment when you complete your studies
• don't find employment in your field of study
• didn't receive a bill
• feel that the education you received did not meet your expectations

You'll need to ensure that loan repayments are made on time or it may have serious consequences such as:

• damaging your credit rating, which could impact your ability to borrow
• being referred to a collection agency
• incurring collection costs
• causing the withholding of your state or federal treasury payments (including federal tax refunds, social security benefits, etc.)
• garnishment of your wages
• a civil lawsuit, including court costs and legal expenses
• loss of deferment and forbearance entitlements and flexible repayment options
• loss of eligibility for further financial aid
• suspending your professional licence

What are my repayment options?

A number of repayment options are available to help you meet your obligations to repay your loan. You can discuss the following options with your lender to find a plan which best suits your needs:

• Standard repayment plan
• Graduated repayment plan
• Extended repayment plan
• Income-driven repayment plans
  (including income-based, income-contingent and pay as you earn)
• Income-sensitive repayment plan

What is a 'grace period'?

The grace period is a period of time after you graduate, leave school, or drop below part-time enrolment before you enter loan repayment. Both Direct (Subsidized and Unsubsidized) Stafford Loans qualify for a six-month grace period before any repayments are due.

There is no grace period for a Grad PLUS or Parent PLUS Loan. Once these types of loans are fully disbursed you'll be required to make repayments. You may be eligible for a deferment and should contact your loan servicer to find out if this is possible.

What should I do if I have difficulties repaying my loans?

You should discuss the following options with your lender:

• Deferment
  If you find it difficult to make repayments you need to speak to your lender about a deferment. A deferment is a period of time during which your lender temporarily suspends your regular payments. You will need to continue making repayments until your lender has approved the deferment. During the deferment you will still incur interest charges on Direct Unsubsidized Stafford Loans and any other type of loan.
• Forbearance
  If you are unable to make your scheduled payments but do not meet the criteria to qualify for a deferment, the lender/holder has the discretion to allow you to:
  - reduce the amount of your payment
  - temporarily stop making payments

You must contact your lender/holder to request forbearance and continue making repayments until a forbearance is agreed. For more information visit the Federal Student Aid website.