Loan Repayment Strategies
Strategies for Student Loan Repayment

Honor Your Commitment
You are accepting a great responsibility when you take out an educational loan as well as investing in your future. Keep in mind that your student loan(s) may provide you with a good credit history.

Maintain Accurate Records
Save all records pertaining to your loan(s) in a convenient, safe place. Even after you have repaid your loans, maintain records to document the repayment of your loan(s). You should print and keep copies of completed entrance counseling, the Master Promissory Note, copies of deferment and forbearance forms and copies of correspondence with the bank or servicer of your loan(s). You should also keep a record of each telephone conversation, noting the name of the person you talked to, the date of the call and what was discussed. Be proactive with your student loans, not reactive.

Stay Current with Your Payments
Make your monthly payments before the due date to ensure proper credit. Include your account number on the check and enclose any billing statements or coupons that you receive from the holder of your loan. If you are behind on your payments you may still be able to apply for a deferment; contact your holder for more details. If you are not eligible for a deferment, inquire about forbearance options; your holder may permit you to reduce or stop payments for a short period of time. Keep in mind that during a forbearance period interest continues to accrue and is either paid or added to the principal balance.

Avoid Default
If you do not accept your responsibility and repay your student loan(s), the loan(s) will go into default. Defaulted loans are reported to national credit agencies, thus affecting your credit rating and your future ability to borrow money. If your loan is turned over to a collection agency and collection efforts fail, the defaulted loan is assigned to the federal government. At this point, one or more of the following actions may occur:
*Loss of eligibility for all federal student aid programs, including student loans
*Loss of eligibility for any postponement of payment (deferment or forbearance)
*Contacting your references listed on your loan application
*Loss of certain professional licenses and driver’s license (in some states)
*Reporting of your default status to the Internal Revenue Service (IRS), causing your state and federal tax returns to be withheld and applied to your loan balance
*Garnishment of your wages
*An adverse credit rating which may remain on your record for sevenyears after the final repayment date of your loan(s)
*Additional fees added to your loan balance as a result of collection efforts on your account. Even though you are in default of your loan, you will still owe the balance
*Possible loss of your degree, certification and/or accreditation

For additional Repayment Strategies, including information on repayment plans, visit:
http://www2.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlindex2.html
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