Admissions & Financial Aid Repayment of Loans
Repayment of Loans
After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment*. This “grace period” will be:
Six months - Federal Stafford Loan
Six months – Wabash College Subsidized Loan
*Consult loan paperwork or ask lender for grace period on outside private loans.
All student borrowers must complete Exit Counseling prior to graduation or leaving Wabash. Exit Counseling details information about your repayment. Since student loans are real loans, there are serious consequences for not making your full loan payment on time. Through this counseling session you will learn about how to repay your loans, consolidation options, and the importance of communicating with your lender(s).
GET YOUR LOAN INFORMATION
To ensure that you are making your payments on time, and to the right lender(s), you need to know what loans you have borrowed. If you have questions about who holds your loans, visit the U.S. Department of Education’s National Student Loan Data System (NSLDS). NSLDS gives you access to your loan amounts, loan status (including outstanding balances), and disbursements made.
SAMPLE REPAYMENT SCHEDULE
The U.S. Department of Education provides a great tool for loan borrowers to better understand your repayment options. The Repayment Estimator is a great way to get an idea of how much your monthly loan payments may be based on how much you borrowed. There are two ways to use this tool: 1) you can sign-in to the site using your SSN, first two characters of your last name, date of birth, and your Department of Education PIN number. This method will give you the best estimate possible as it pulls information about your federal loans directly from the National Student Loan Data System. 2) you can proceed to the estimator without signing in. By selecting this method you will need to have detailed information about all of your federal loans so that you can enter the information manually.
The best way to know what options you have to repay your loans is to contact your lender. The federal government offers the following repayment options on Stafford loans: Standard, Extended, Graduated, and Income Based Repayment. To see these options in detail please visit Repayment Options and Calculators.
A Consolidation Loan allows you to combine all of your federal student loans into a single loan. Consolidation loans have a fixed interest rate based on the weighted average of the interest rates of the loans being consolidated. Consolidation for student loans is only available after the student is no longer enrolled. Keep in mind that although consolidation can simplify loan repayment and lower your monthly payment, it can significantly increase the total cost of repaying your loans. Use this Consolidation Checklist to help you make the decision. To obtain information on, or to apply for a consolidation loan, contact 1-800-557-7392 or visit studentloans.gov.
TROUBLE MAKING PAYMENTS?
If you’re having trouble repaying your loans, contact your lender(s) immediately. Your lender can work with you to determine what alternative payment options you may be eligible for. These may include:
- Changing your current repayment plan
- Deferment - if you meet certain requirements, allows you to temporarily stop making payments on your loan.
- Forbearance - if you don’t meet the requirements for a deferment but are momentarily unable to make your loan payments, allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments.
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. Action can be taken to recover the money you owe. Here are some consequences of default:
- National credit bureaus can be notified of your default, which will harm your credit rating.
- You would be ineligible for additional federal student aid if you decided to return to school.
- Loan payments can be deducted from your paycheck.
- State and federal income tax refunds can be withheld and applied toward the amount you owe.
- Late fees and collection costs will be added to the amount you owe.
- You can be sued.