What Does It Mean To Borrow A Loan?
Before accepting a loan, consider the following:
Are there other options?
Check out all scholarships and grants. Can you borrow less?
If borrowing, stay with one lender to
simplify loan repayment.
Many lenders make loans to students in California and their policies
differ.
Federal Subsidized Stafford Loan repayment
begins six months after you drop below half-time student status
or graduate.
This six-month grace period allows you time to obtain employment
and make preparations to begin loan repayment. Federal Unsubsidized
Stafford Loan interest payments start immediately, with payment
on the balance being on the same terms as the Subsidized Stafford
Loan Program.
Keep in touch with your lender and your
school.
If you change your name, move, leave school or change your graduation
date, inform your lender promptly. If you cannot be contacted by
your lender, your loan could go into repayment.
Postponing repayment of your loan, called
a deferment, for in-school, military, unemployment and other reasons
may be available to the Federal Stafford borrower. If you are not
qualified for a deferment and are unable to make payments, ask your
lender for a hardship extension or "forbearance".
A defaulted loan
means that the lender has turned the loan over to the state guaranty agency for collection
and that the entire amount is due and payable. Consequences include: no more financial aid,
garnishment of state and federal tax refunds, wage garnishment and a bad credit rating.
The state will take all steps necessary to collect the money owed and will take the borrower
to court and use other legal action if necessary.
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