As a federal student loan borrower in the United States, your rights and responsibilities are outlined in a document called the "Borrower's Rights and Responsibilities Statement." This document is provided by the U.S. Department of Education and is typically included with your loan documents or provided to you during the loan counseling process.
The Borrower's Rights and Responsibilities Statement outlines various aspects of your federal student loans, including:
Loan Terms: It explains the terms and conditions of your federal student loans, including the interest rate, repayment options, deferment and forbearance options, and any fees associated with the loans.
Repayment Obligations: It outlines your responsibility to repay your student loans according to the terms of the promissory note you signed when you accepted the loan.
Grace Period: It explains any grace period you may have before you are required to begin making payments on your loans after leaving school or dropping below half-time enrollment.
Repayment Options: It describes the various repayment plans available to federal student loan borrowers, including standard repayment, income-driven repayment, and extended repayment plans.
Deferment and Forbearance: It explains your options for temporarily postponing or reducing your loan payments through deferment or forbearance if you experience financial hardship or other qualifying circumstances.
Loan Consolidation: It provides information about loan consolidation options, which allow you to combine multiple federal student loans into a single loan with one monthly payment.
Consequences of Default: It outlines the consequences of defaulting on your federal student loans, including damage to your credit score, wage garnishment, loss of eligibility for future financial aid, and potential legal action.
Loan Forgiveness and Discharge: It explains circumstances under which your federal student loans may be eligible for forgiveness, cancellation, or discharge, such as through Public Service Loan Forgiveness (PSLF) or Total and Permanent Disability (TPD) discharge.
It's essential to review the Borrower's Rights and Responsibilities Statement carefully and understand your obligations as a federal student loan borrower. If you have any questions or concerns about your student loans, you can contact your loan servicer or the Federal Student Aid Information Center for assistance.