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Student Loan Management

What to Expect

A student loan is a serious obligation and must be repaid regardless of the following:

  • Whether you finish school
  • File bankruptcy
  • Have a job in your field
  • Change your name, address, telephone number, etc.
  • Change Schools
  • Withdraw
  • Transfer

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).

Deferment Conditions:

  • Enrolled at least half time at an eligible postsecondary school.
  • Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled.
  • Unable to find full-time employment (for up to three years).
  • Economic hardship, which includes Peace Corps Service (for up to three years).
  • A member of the National Guard or other reserve component of the U.S. Armed forces who is called or ordered to active duty while enrolled at least half-time at an eligible school or within six months of having been enrolled at least half-time.
  • While borrower is on active duty during a war or other military operation or national emergency and if the borrower was serving on or after Oct. 1, 2007.

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.

Types of Repayment

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:

  • Prepayment-make payments while in school or during your grace period
  • Standard Repayment-Monthly payments remain the same throughout repayment
  • Graduated Repayment-Payment begins with small amounts that increase over time
  • Income Sensitive Repayment-Payments are based on a percentage of your gross monthly income and are adjusted annually.

For more information on repayment options, please contact the Dept. of Education at 1-800-4FED-AID or www.studentloans.gov.

Delinquency/Default

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:

  • Damage to your credit rating
  • Garnishment of wages
  • Legal action against you
  • Collection charges
  • Loss of deferment eligibility
  • Loss of your professional license
  • Increase in the interest rate on your loan
  • Withholding of your federal and state income tax refunds
  • Loss of eligibility for state and federal financial aid

Student Loan Repayment Policy

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.

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To request further information on your program(s) of interest please click the button above to continue to our information request form.

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