A student loan is a serious obligation and must be repaid regardless of the following:
Grace Period: Your federal direct student loan(s) have a 6 month grace period prior to repayment. This grace period begins the day after you graduate, withdraw from school or drop below half time status (6 credits).
Deferment: You have the right to postpone repayment of your loan(s) if you qualify for a deferment. Please contact the Dept. of Education at 1-800-4FED-AID or on-line at www.studentloans.gov for options that may be available to you.
Under certain circumstances you can receive a deferment that allows you to temporarily postpone loan repayments. A deferment is a period in which repayment of the principal balance is temporarily postponed if you meet certain requirements. During a deferment, the government pays the interest on subsidized loans.
For all unsubsidized loans and PLUS loans, you are responsible for paying the interest that accrues during the deferment period, or allow it to be capitalized (added to the principal balance).
REMEMBER: You MUST continue making payments on your student loan until you have been notified that your request for deferment has been granted.
Forbearance: If you are unable to make a scheduled payment due to special circumstances, you may request a forbearance through the Dept. of Education. You should contact the Dept. of Education immediately if you are experiencing problems with repayment at 1-800-4FED-AID or online @ www.studentloans.gov.
6 months from your last date of attendance, you will be required to begin making payments on your student loan(s). The following is a list of some of your payment options:
For more information on repayment options, please contact the Dept. of Education at 1-800-4FED-AID or www.studentloans.gov.
Delinquency: If you fail to make payments when due, your loans become delinquent. Delinquent loans can adversely affect your credit.
Default: If a loan becomes delinquent for 270 days, it will be declared in default. Consequences of default may include:
Default prevention at Johnson College begins before the student receives any loan funds. Every student who wishes to borrow under the federal loan programs must complete an on line entrance interview session. This session notifies the student of their rights and responsibilities pertaining to their federal student loans. (This includes the fact that student loans must be repaid.) The college will not process a federal loan for a student until the student has completed this entrance counseling.
Prior to graduation, all students who borrowed through the Federal Direct Loan Programs are notified that they must complete an on line exit counseling session. The Financial Aid Office works in conjunction with the Academic Affairs Office to insure that each graduate completes the exit counseling session. Students who leave school but have not completed their degree requirements are notified in writing that they are required to complete the exit counseling session.
Johnson College works with AES/PHEAA, Federal Direct Loan Program and NSLDS (National Student Loan Database Systems) in using a 3 step default prevention program that notifies students that they are past due on their student loans.
If a student is 100 days past due on his student loans, the school is notified that a letter has been generated for the student. Financial Aid Office staff prints off the letter and sends it to the student. If the student does not bring their loan up to date as a result of this initial correspondence, two more letters are generated prior to default. Each successive letter employs stronger language.
The use of this process helps us to get a feel as to how our students are doing with student loan repayment. Letters are generated every two weeks, making this review an ongoing process. Ignoring the problem is not a solution, please call for help. Remember, YOU have the power to fix the problem!
The school’s default rate is calculated and published each year by the U.S. Department of Education.