Your Loan Responsibilities and Repayment

Your Loan Responsibilities and Repayment

Your responsibilities

Exit Counselling: If you have borrowed a Direct Loan in order to study at London Metropolitan University and you will be graduating, are withdrawing, or ceasing to attend for any other reason, you must complete a Direct Loan Exit Counselling session. Exit counselling is mandatory. The exit counselling session is designed to make you aware of your repayment responsibilities, familiarize you with your Loan Servicer and provide you with examples of repayment. Visit the www.studentaid.gov for further details on loan counselling types

Repayment of your loan: When you completed your Masters Promissory Notes, you agreed to repay all the loans funds disbursed to you. You are legally obliged to comply with the MPN conditions. Take a look at the video on How to Manage Your Student Loans. There are a number of Repayment Options (See Key Terms about Your Responsibilties below) and you should explore the one that suits your circumstances best. Your Loan Servicer will be happy to discuss these with you too.

In School Status Changes: Notify London Metropolitan University and your Loan Servicer or Lender of any changes in your status, including withdrawal, graduation, changes to your address, telephone number and e-mail.

After Graduation Status Changes: Notify your Loan Servicer or Lender of any changes in your circumstances, including any change of address, telephone/cell number and e-mail.

Remember, you are required to make your student loan payments even if you:

  • Do not complete your education
  • Are not employed upon completion of your studies
  • Do not find employment in your field of study
  • Feel that the education you received did not meet your expectations
  • Do not receive a bill from your Loan Servicer

Repayment:Key Terms About Your Responsibilities

Grace period:Each loan has a grace period of 6 months (excluding Grad PLUS loans). This means that six months from the date you graduate or that you cease to attend, you will be required to begin loan repayments on any current loan and deferred loans. You should receive repayment information from your loan service provider approximately 3 months after you leave school. If you do not receive this information, it is your responsibility to contact your loan service or lender before the end of your grace period to arrange for the repayment of your loan. Note that PLUS loans do not have a grace period. They enter repayment once you have completed your studies.

Loan Servicer: The loan servicer is a company that handles the billing and other services on your federal student loan.  Your loan is assigned to a loan servicer by the U.S. Department of Education after your loan amount is first disbursed (paid out) and they will contact you after your first payment.  It is important to maintain contact with your Loan servicer. You should contact them if your circumstances change at any time.  Your loan servicer will be able to help.  Visit NSLDS to view information about all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans.

Repayment Plans: There are six types of repayment options and these need to considered and compared for your circumstances and their advantages and disadvantages. Repayment Plans are there for your benefit and you should discuss the one that suits you best with your loan servicer. Loan Repayment Options are: (1) Standard (2) Graduate (3) Extended (4) Consolidated (5) Income-Driven Plans (6) Income Sensitive Plans. Further details about repayment and repayment plans can be obtained here and you can discuss these with your loan servicer. Remember your loan servicer is there to help you. Go to www.studentaid.ed.gov for more information on understanding Repayment Plans. Take a look at the Video Repayment What to Expect

Charges for failure to pay all or part of your loan: Failure to meet repayments will result in additional charges.  These can be avoided by simply contacting your loan servicer in good time to discuss any changes to your circumstances and repayment options with them.

Delinquent Loan: A loan is delinquent when loan payments are not received by the due dates. A loan remains delinquent until the borrower makes up the missed payment(s) through payment, deferment, or forbearance. If the borrower is unable to make payments, he or she should contact his or her loan servicer to discuss options to keep the loan in good standing. Contacting your loan servicer in good time can help prevent your loans being defined as delinquent and going into default. Default is a serious matter and must be avoided

Default: To default on your payment means you failed to make your payments on your student loan as scheduled according to the terms of your promissory note, the binding legal document you signed at the time that you took out your loan. If you default on your loan (fail to make payments) and are delinquent there are consequences.  Initially a report is made to all the national credit bureaux which will result in an inability to secure other forms of credit which will include credit cards, cell phone plans, mortgages or other loans. You will also remain ineligible for all other types of financial aid. Your loan servicer will proceed with actions in order to recover defaulted loan funds.  Some other serious consequences of default are (1) a damaged credit rating for 7 years, (2) exclusion of repayment and deferment options listed above (3) defaulted loans are also reported to Internal Revenue Services and can lead to possible seizure of federal or state income tax refunds and wage garnishment (4) exposure to civil suit (5) referral of your account to a collection agency (6) liability for collection costs and attorney’s fees.  Go to www.studentaid.ed.gov for more information. 

Deferment: If you are in school and you have previous loans in repayment, you must ensure that you have deferred payment on these loans.  You should contact your loan servicer to discuss deferment of your loan payments.  If you do not defer your previous loan you risk going to into default and becoming ineligible for further Direct Loan Funding.

Loan Consolidation: consolidating your federal loans together into a Direct Consolidation loan may make loan repayment easier. If you consolidate, you will have just a single monthly payment and it will allow you to take advantage of certain benefits that are offered only in the Direct Loan Program. If you would like to learn more about consolidating your previous loans (combining multiple federals loans into one) please go to www.StudentLoans.gov and sign in to begin the new consolidation process or contact your Loan Servicer for further advice.