Borrower Responsibilities and Rights

When you take out a Stafford loan, you will have certain responsibilities and rights as a borrower. Make sure you are familiar with the following responsibilities and rights before you sign the promissory note.

Responsibilities

You must provide complete and true information on all of your loan documents.
You must notify your loan holder or servicer immediately about any changes to your name, address, telephone number, Social Security Number, or student status.
You must repay your loan on time even if you do not complete your education, are dissatisfied with the education that you received, or are unable to find employment after graduation.
You must make repayments on your loan even if you don't receive a bill or repayment notice. Student loan companies usually send billing statements or coupon books, but you are still obligated to make payments even if you don't receive these reminders.
You should communicate with your loan holder or servicer if you are having trouble making payments. You may be able to postpone or reduce your payments.
If you apply for a deferment or forbearance, you must continue to make payments on your loan until you are notified that the request has been granted.

Rights

You have the right to a grace period before your repayment period begins. Your grace period begins when you leave school or drop below half time status.
Before you begin to repay, your loan holder is required to give you a repayment schedule and detailed information about interest rates, fees, balance owed, and repayment options.
You have the right to prepay your loan in whole or in part at any time without penalty.
You have the right to defer repayment for a specific time period if you qualify.
You have the right to request forbearance.
You have the right to choose an income-sensitive or graduated repayment schedule if eligible.
You must be notified if your lender sells or transfers your loan and be provided with the new loan servicer contact information.

Be sure to read your promissory note for a more detailed description of your rights and responsibilities.

Posted: 7/2/2005