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Rights and Responsibilities of Loan Recipients

Loan Recipients Have the Right To The Following:

  • Written information on their loan obligations and information on their rights and responsibilities as a borrower.
  • A grace period and an explanation of what this means.
  • A disclosure statement, received before they begin to repay their loan(s), that includes information about interest rates, costs, the balance owed and the number of payments.
  • Deferment of repayment for certain defined periods, if they qualify and request it.
  • Forbearance, if they qualify and request it.
  • Prepayment of their loan(s) in whole or in part any time without an early-repayment penalty.
  • A copy of their promissory note either before or at the time the loan is disbursed
  • Documentation that their loan(s) are paid in full.

Loan Recipients Are Responsible For The Following:

  • Attend exit counseling before they leave school or drop below half-time enrollment.
  • Repay the loan(s) even if they do not complete the academic program (under certain circumstances), are dissatisfied with the education received, or are unable to find employment after graduation.
  • Notify the school and the Direct Loan Servicing Center if they:
    • Move/Change their address
    • Change their name
    • Withdraw from school or drop below half-time enrollment
    • Transfer to another school
    • Fail to enroll or re-enroll in school for the period for which the loan was intended
    • Change their expected date of graduation
    • Graduate
  • Make monthly payments of their loan(s) after they leave school, unless they have a deferment or a forbearance.
  • Notify the U.S. Department of Education, Direct Loan Servicing Center or anything that might alter their eligibility for an existing deferment.