Posted by: cslfconnects | October 9, 2008

The Rules of Repayment

Greetings parents, students and financial aid professionals! Here is our first podcast! For borrowers entering repayment after graduation or periods of forbearance, its crucial to know the “rules of repayment”.

Listen to this episode in a new window

Click to listen to The Rules of Repayment

Listen to the podcast or read on for a guide on:

  • grace periods
  • dealing with the servicer of your student loan
  • forbearance
  • repayment options
  • avoiding delinquency and default
  • Consolidation

Hope you’ll join us for more information on our MySpace profile, found at – great place for updates, links to these podcasts and more.

Don’t hesitate to drop us a line at alternativeoutreach (at) mail (dot) cslf (dot) org. We love answering questions and might feature yours in our next blog!

Find us on WordPress, now as well, where anyone can read, comment and subscribe to our features –

We’re chock full of information on our primary domain, as always, at – a great place for students and families. Thanks for stopping by!

Mariana Evica “the loan geek”

Transcript Follows:

Amie: Podcast 1 – Student Loan Essentials for New Graduates

Mariana: Welcome to the first edition of CSLF’s informational podcast series.

The Connecticut Student Loan Foundation, or CSLF, is a non-profit organization dedicated to providing access to funding for higher education through customized and high-quality service.

We hope to be able to provide you with regular installments of useful, accurate and up to date student loan and financial aid information

Please feel free to contact us with your questions and comments at our myspace profile at or visit our website at

We are your hosts, Mariana Evica –

Amie: — and Amie Aragones

Graduation season is here!

Many new graduates have spent several years acquiring student loans, but have not had to give much thought to what happens once they have graduated

Today’s podcast will tackle what new graduates must know about their student loans

Mariana: Graduation is an important and overwhelming time of your life. You have just accomplished a great deal to get there. You are preparing for a new career, and possibly moving to a new location.

Within your new responsibilities is your need to begin repaying your student loans.

Amie: You must pay back your student loans. When you signed your loan documents, you signed a promissory note, indicating that you understand that you must pay these loans back. You must pay them even if you did not complete your education, or are disappointed with the outcome. This applies even if you were under 18 when you signed.

There are some limited circumstances where your responsibility to pay your loans is cancelled, or your loans are “discharged”, but these circumstances are rare. We will not address loan discharge in this podcast, but you may learn more online or by calling your servicer.

And in most cases where you file bankruptcy, your student loans cannot be included.

Mariana: Federal Stafford and Perkins loans have a grace period, or a period of time in which you are not required to make payments. This buffer before you make your first payment typically begins the day after your final class, and lasts 6 months for Stafford loans and 9 months for Perkins loans.

If you have ever entered repayment on your loans before, for instance having taken extended time off from school, you may have exhausted your grace period already.

Amie: There may be several companies involved in your student loans. When you are entering repayment on your loans, you should contact your loan SERVICER.

The servicer keeps the most up to date records on your student loan account, processes your payments, and helps answer questions on the status of your loans. They’ll inform you how much you owe per month, and when payments are due, as well as other pertinent information on a loan disclosure statement and repayment schedule.

The servicer may be the same as your lender. If you’re unsure, your lender should be able to tell you who is servicing your loans. Or, you can check the Department of Education’s federal student loan database, the National Student Loan Data System, or NSLDS, at or call 1(800) 4FEDAID.

For a Perkins loan, the school is your lender, and you should contact the financial aid or student loan office for repayment information.

Mariana: Even if you do not receive statements or bills, you’re required to make your payments, in full, every month.

Also, it is YOUR responsibility to make sure your servicer has your current contact information. If you move or change telephone numbers, you must provide that information to the servicer of your loans, or you may not receive important information.

Amie: You may be wondering what happens if can’t make a payment to your loans.

Mariana: Many loan borrowers encounter situations where they may be unable to make their student loan payments temporarily. This may include periods of unemployment, financial or medical hardship, and other major changes in living circumstances, such as active duty military service or returning to school.

If you find that you may not be able to make payments, be sure to contact your student loan servicer. They will tell you about DEFERMENT and FORBEARANCE.

Different kinds of deferment or forbearance apply depending on your circumstances and when you originally took out the loans.

Some are limited by time and can be eventually “used up”.

Deferment or forbearance essentially give you “time off” from paying your loans. Payments are not expected, and nothing is reported to the credit bureaus.

Amie: Always check with your loan holders for your deferment or forbearance options rather than NOT paying. These tools exist to help you!

Skipping payments and becoming delinquent has negative consequences for your credit.

If you neglect to make payments for an extended period of time, you may go into default, which has many more negative consequences, including wage garnishment, withholding of your federal income tax refunds, and suspension of your professional licenses.

Mariana: If you think you may need help with your Stafford Loan payments for an extended time period, you may want to consider alternate repayment schedules.

Standard Payments for Stafford loans begin with a maximum repayment term of 10 years, with even, monthly payments for the life of the loan (with the possible exception of the final payment)‏

Graduated payment begins with low payments, which increase over a fixed period of time, usually 10 years, usually at 2 year increments.

Extended payment allows some qualified borrowers with over $30,000 in loans to extend the repayment of their loans over a longer period of time, possibly up to 25 years

Income sensitive or Income contingent payment takes into consideration your annual income to determine payment amounts. You’ll have to submit salary documentation, such as current pay stubs, to verify your income.

Remember, there are consequences to choosing non-standard payment plans.

The longer you take to pay off the principal of your loan, the more you will end up paying in interest over the life of the loan

Of course, if one of these options is best for you, it is best to go ahead and choose it rather than to become delinquent or to go into default!

You may choose to change these repayment schedules later on, if your circumstances change.

Perkins loans do NOT have alternate repayment schedules

Amie: Another major option to consider once you have graduated is Federal Student Loan Consolidation, which allows you to combine all of your federal student loans into one loan, for ease of payment and different terms and benefits, including possibly lowering your monthly payments

We’re going to focus on Consolidation in podcast # 2 of our series, so tune back in for the details on how Consolidation can help you

Mariana: You need to be well informed to be a good consumer and responsible borrower. Making mistakes with your loans can have serious consequences for your future. Luckily, there is a wealth of information available to you, especially on the internet. If you have trouble navigating this often changing and confusing information, you should feel comfortable contacting your student loan provider for assistance with understanding your student loans.

Amie: This is the end of CSLF’s podcast #1, the student loan essentials for new graduates.

Thanks for listening!

Tune in next time for Podcast #2, where we help you navigate the benefits of Federal Student Loan Consolidation in a two part podcast.

Mariana: To get immediate updates on new podcasts, remember to add the loan geek as a friend by visiting our profile on MySpace at

Amie: This podcast has been brought to you by CSLF, the Connecticut Student Loan Foundation.

The purpose of CSLF is to improve the education opportunities of individuals who wish to obtain a postsecondary education. CSLF supports its purpose by promoting access to higher education, by providing services designed to educate individuals about higher education opportunities and by offering affordable financing solutions that best meet the education funding needs of families.

Mariana: For more information, visit our website or our blog on MySpace at , where you can provide feedback and ask questions.

Information in this podcast was accurate at time of production. CSLF is not responsible for changes in federal regulations, which modify program guidelines or requirements.

Amie: This CSLF podcast is copyright of the Connecticut Student Loan Foundation, all rights reserved. May 2007.



  1. Hey Great Post!!
    Really liked your work
    found it pretty informative keep it up 🙂

  2. good information thank you

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