Wednesday, December 16, 2009

Some Responsibilities for Student Loan Borrower

When you accept the terms of a student loan, it means you have to take those loan obligations seriously. Even if you don’t, the lending institution will, and they’ll want their money back. In fact, they’ll want it back so bad that they’ll hound you like a dog, stick to you like a barnacle to the hull of a boat, and be like bubble gum on your shoe until they get their money back—or ruin your financial life if they don’t. Believe me, lending institutions aren’t charitable institutions. They have absolutely no problem making your life miserable if you’re slow or a no-show in paying off your loan.

Also remember that when you take out a student loan, you have certain responsibilities. Primary among those responsibilities is your promise to pay back the money you borrowed. As stated by the U.S. Department of Education in the Student Guide— 1996–1997:
When you sign a promissory note, you’re agreeing to repay the loan according to the terms of the note. The note is a binding legal document and states that, except in cases of loan discharge, you must repay the loan—even if you don’t complete your education (unless you were unable to complete your program of study because the school closed); you aren’t able to get a job after you complete the program; or are dissatisfied with, or don’t receive, the education you paid for.

Some other responsibilities you have as a student loan borrower— and the excuses you cannot use—are as follows:

I never got the bill. Sorry, but not receiving a bill or loan statement in the mail is not grounds for not paying your student loan bill. Lending rules state that loan recipients must make payments on their student loans even if they do not receive bills or repayment notices.

I need more time. Sometimes you hit a rough patch and you
can’t pay your student loan bills perhaps for months at a time. In those instances, it’s a good idea to ask for a deferment or a forbearance— basically a “loan holiday” when you don’t have to pay your student loans until you get your financial act together. If, that is, your lending institution goes along with your request. But, according to the U.S. Department of Education, if you request such a delay you still have to make payments until you are notified that the request has been granted. If you stop paying on your loan anyway, you could be in default. A tip: Keep copies of all deferment request correspondence because they could come in handy if your loan is in question later on.

I thought you had a crystal ball. When you graduate from school, transfer to a new school, or drop out or attend as a parttime student, it’s your responsibility to let your lending institution know about it.

I didn’t think it was that time of the month. Your loan payments are expected each month.

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