Default Prevention
What to Expect
A student loan is a serious obligation and must be repaid regardless of the following:
- Whether you finish school
- Change your name, address, telephone number, etc.
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.
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.
Deliquency/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
Lackawanna College Default Prevention Coordinator:
Roxanne Seymour
Phone: (570) 961-7867
Email: seymourr@lackawanna.edu
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