How long do I have to pay back my loans?
Stafford and PLUS Loans
generally allow borrowers up to 10 years to repay the loan. Deferments and/or
forbearances will not count toward the 10-year term. You may, however, extend
the 10-year term if you qualify for the Extended Repayment Plan. Another way to
stretch your repayment term and reduce your monthly payments by as much as 51%
is to consolidate your loans. By consolidating, you could extend repayment
period up to 30 years depending on the initial balance of the loan. Contact a
Goal Financial Loan Consultant for more information about
consolidation.
How is repayment affected if I go back to school after
entering repayment?
If you go back to an approved school and are
enrolled half-time or more, or are enrolled in a graduate fellowship program,
you can put your loans into a deferment status. There are no principal payments
due while you are in deferment and the government will pay the interest on your
subsidized loan during periods of deferment.
What happens if I don't
pay back my loan?
If you do not repay your loan according to the
terms disclosed on your promissory note, you may eventually be in default on the
loan. Some consequences may include:
- An adverse affect to your credit rating that may limit your ability to
borrow for a car, home, or credit card.
- A requirement to pay the entire amount of the loan, including interest,
immediately.
- A withholding of your wages to pay your debt after the loan is assigned by
the guaranty agency or the federal Department of Education.
- Inability to get additional federal or state financial aid, including
student loans.
- Withholding of your federal and state tax refunds.
When do I have to begin paying back my student
loans?
The day you finish school, or drop below half-time status,
your Stafford student loans go into a "grace period." The grace period is a six
month term where you are not yet required to start making payments. Once that
grace period expires, payments will begin. You only get one grace period on each
loan. If you stop going to school, then start again (thus putting your loans in
deferment), when you leave school again payment will begin immediately without a
grace period. Any new loans, however, will be eligible for a grace period. |
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