When you take out a Federal Loan, you sign an agreement that you’ll repay it. That agreement is called a Promisory Note. Keep it.. It’s the legal document that tells you how and when you must repay.

If you have any questions about your loan, or you’re having trouble making the payments, contact your lender or student services. If you are past due we can help you get caught up. No payment is required.

If you don’t repay the loan, your Student Loan DEFAULTS. The government will then purchase your loan from your lender, and on order of the federal goverment, they will take action collecting on YOUR DEBT.

Some of the Action the Federal Government Can Take: Garnishment of Wages Federal and State income tax returns will be seized STOP you from receiving future Financial Aid

I cannot make my payment right now. What do I do? You can apply for Forbearance. This temporarily suspends your loan and gives you up to 12 months off from making payments. It will also bring your loan current so you are no longer delinquent. You can, but are not obligated to, make payments during Forbearance. Most lenders allow a total of 36-60 months of Forbearance time over the life of your loan.

I could make my monthly payments now, but I sure don’t have the money to pay my past due amount. I know negative credit reports will continue until it is cleared up. What do I do?

You can apply for Forbearance to cover just the months you are behind. It will bring your loan current so you are no longer delinquent. Your past due amount will be put back into your loan and it will create a fresh start for you with just your regular monthly payment. If you want this kind of help, please call me and we will arrange a Forbearance that is just for the months you are behind.

Is there a charge to request forbearance?

NO. You do not have to make a payment to request Forbearance. No money is needed.

If I request forbearance, will it be a blot on my credit?

NO. Forbearance is actually good for your credit because it stops negative credit reports. Being reported delinquent is what hurts your credit score.

What if I am unemployed, only working part time, or have a very limited income?

You may qualify for Deferment. Please call me, because there is additional help for borrowers in these situations.

What if I do not take care of my delinquent student loan?

You will Default!

Examples

SOLUTION: Forbearance or deferment will suspend payments up to 12 months and will prevent default.

Mike was the best qualified candidate for a job that was perfect for him, and he was ready to buy a car to drive to work. But, a routine credit check showed he hadn’t repaid his federal student loan as he’d agreed to do - he’s a defaulter. He didnt get the job. It went to the next best candidate. He also didn’t get the car. The loan company wouldn’t approve his loan because of his poor credit history. Job Application & Car Loan Solution: The forbearance or deferment are two solutions that students can resort to while facing difficulty in paying

back their Federal Education loan and will prevent default.

Judy wants to go back to school. She’s found a good program at the local community college and she knows that when she finishes school she can get a good job. But, she needs financial aid to help her pay for tuition and books. The last time Judy was in school, she got a federal student loan, but she dropped out and defaulted on the loan. Now, even though she’s otherwise eligible for federal student aid, both grants and loans, she can’t get any. Judy defaulted on a student loan; she can’t get any more federal student aid.

Financial Aid & Future Plans to Graduate

Solution: Deferment or forbearance will pull you out of delinquency and bring your account current and will prevent default.

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