Stafford Rights and Responsibilities

Rights

As a student borrower, you are entitled to:

• A copy of your repayment schedule and a detailed information about your interest rates, fees, balance owed and repayment options;
• To a six month grace period before your repayment period begins;
• A standard repayment period of at least ten years.

As a student borrower, you have the right to:

• Be notified if your lender sells or transfers your loan and have new servicer contact information provided to you
• Prepay part of or your entire loan at any time without penalty
• Defer repayment for specific time period, if you qualify
• Request forbearance
• Have your loan obligation canceled if you die or become totally and permanently disabled.

Responsibilities

Acceptance of an educational loan requires:

• That you provide complete and true information on all of your loan documents.
• That you notify your lender if you change:
  • Schools
  • Name, address or telephone number
  • Social security number
  • Enrollment status (e.g. withdrawal, graduation or enrolled less than half time)
• That you repay your loan on time and in full even if you:
  • Do not graduate or complete your program of study
  • Are unable to secure employment
  • Are dissatisfied with the education you received
• You must make payments on your student loan even if you don't receive a bill or repayment notice. If you have not received a billing schedule, please contact your loan service provider.
• You must communicate with your loan service provider if you are having trouble making payments. You may be able to reduce or postpone your payments.

Grace Period

The federal student loan "grace period" begins the day after you graduate, leave school, or drop below half-time enrollment. The grace period for all Federal Stafford loans is six months. During the grace period on a subsidized loan, you don't have to pay any principal, and you will not be charged interest. During the grace period on an unsubsidized loan, you don't have to pay any principal, but you will be charged interest. You can either pay the interest or it will be capitalized (added to your principal loan balance, thus increasing the amount you'll repay).

Repayment

Approximately 30-45 days from the last day of your grace period, your first payment will be due. You will receive a repayment schedule during your grace period that will disclose payment amounts, due dates and the period of time you will be paying.

Repayment Options

• Standard Repayment Plan: Stafford loans are repaid in full within ten years and monthly payments remain the same over the life of the loan. The standard repayment plan is automatically established for all loans unless you choose another repayment plan.
• Graduated Repayment Plan: Stafford loans are repaid in smaller payments in the beginning and increase at a predetermined rate over a 12 to 30 year period depending on the total amount borrowed.
• Extended Repayment Plan: Stafford loans are repaid in smaller payments over an extended repayment period of 12 to 30 years depending on the total amount borrowed.
• Income Sensitive Repayment: Stafford loans are paid in smaller monthly payments that are based on the borrower's annual income and the balance of their loan. All payments must at least equal the interest accrued on the loan between scheduled payments.

Consolidation

Stafford loan consolidation allows a borrower with multiple student loans to refinance them into a single loan with one interest rate and repayment schedule. The interest rate for the consolidation is the "weighted average" of the interest rates on the loans being consolidated and is fixed for the life of the loan.

As a result of adverse financial market conditions and legislative cuts, many lenders are no longer offering federal consolidation loans. For specific information regarding loan consolidation, please contact your lender.

Deferment

A deferment is a period in which a borrower is allowed to postpone payments on the loan principle. The interest accrues and is capitalized if the borrower has an unsubsidized Stafford Loan. You are required to make payments on your Stafford loan until all deferment documentation is complete and has been approved by your loan service provider. The following types of deferment are available:

• at least half-time study at an eligible school
• studying in an approved graduate fellowship or rehabilitation program for the disabled
• unemployed (up to three years)
• experiencing economic hardship (up to three years)

Forbearance

Should you become financially unable to make monthly payments, you may be able to to delay or reduce monthly loan payments because of financial hardship for a short period of time at the discretion of your loan service provider.

Consequences of Default

If you fall 270 days behind on your loan payments, your default will be reported to the national credit bureau and you may be subjected to any or all of the following consequences:

• Action taken by a collection agency
• Garnishment of wages
• Withholding of federal tax refund
• Loss of federal student aid eligibility
• Difficulty obtaining other credit

To avoid default, make sure your lender always has your current address, and contact the loan service provider if you are having trouble making payments. Your lender may be able to grant you forbearance or make other arrangements to keep you from defaulting.

Debt Management

Developing good financial health while in college will help you manage your student loan debt when you leave school. Healthy money management while in school involves setting goals and developing and following a budget that will help you meet your goals.

Please feel free to visit: www.mappingyourfuture.org/money to learn more on debt management.

Additional Information

Please contact your loan service provider for more information regarding Stafford loan repayment. Most UCCS borrower's loans are serviced with Nelnet.

Nelnet can be reached online at www.nelnet.com or by telephone at 1-888-486-4722.

If you would like to know how many loans you have and who your lenders are, please visit the National Student Loan Data System (NSLDS) website at: www.NSLDS.ed.gov