A student's total financial aid, including loans, may not exceed the calculated cost of attendance for the program. Students with unsubsidized loans may elect to make monthly interest payments to the lender, or allow the accumulated interest to accrue until repayment, which begins 6 months after the student ceases to be enrolled as at least a half-time student. Upon graduation or termination of studies, the student is given a 6-month grace period during which no interest or principal payments are due on subsidized loans, and only interest continues to accrue on unsubsidized loans. The minimum monthly payment is $50, but the amount varies based on the total amount of outstanding loans upon which the student is paying. Students must complete an Entrance/Exit Interview when seeking a Stafford Loan.

When considering a loan, act as a consumer. You should choose a lender very carefully. You can select a lender from within your state of residence or within the state in which your college is located. You do not need to have a banking relationship with a lender in order to have a student loan processed. As a consumer, you need to be able to make an informed lender choice. These are some issues that make a difference to the student:

1. Time. It may take up to six weeks to process a loan using the standard method. You should ask your lender about the length of time it takes to send a check to IWU. Electronic processing can drastically reduce this time. Please contact our office if you would like a list of lenders who subscribe to this process.
2. Servicers. A lender may enlist another party to process loans and disburse checks. The servicer, in most cases, takes the place of the lender in providing information about the status of your loan. Ask a lender how you will resolve problems, if they occur.
3. Selling your loans. Ideally, you should select one lender and secure all student loans from the same lender throughout your college career. However, should a lender decide to sell your loan(s), it is to your advantage to be sure when you begin to repay your loans that all loans have been purchased by one entity. If your loans are held by different parties, each loan could require a separate monthly payment. There is nothing wrong with a lender selling loans; lenders replenish funds so loans can be offered to other students. Be sure to know the selling policies of the lender you select.

As a student borrower you are entitled to*:

1. A repayment period of at least five years as long as the monthly minimum payment of at least $50 is met.
2. A copy of your repayment schedule and disclosure statement from your lender or guarantee agency.
3. Have any questions about your Federal Stafford or Supplemental Loan answered by your lender or guarantor.

As a student borrower you have the right to*:

1. Prepay all or any part of your loan at any time without penalty.
2. Be notified in writing by your lender if your loans are sold or transferred for servicing.
3. Have your loan obligation canceled if you die or become totally and permanently disabled.
4. Defer payment for a specified period of time, if qualified.

*Your lender/servicer should be contacted for details.

Acceptance of an education loan requires:

1. That you use the loan for educational expenses and repay your loan debt in full even if:
   1. You do not graduate or complete your program of study.
   2. You are unable to obtain employment upon ending or completing your program.
   3. You are dissatisfied with the school or you did not receive the education or other services you purchased from the school.
2. If you fail to repay your loan according to its terms and conditions, your default will be reported to a national credit bureau and you may suffer any or all of the following consequences:
   1. Collection agency action.
   2. Withholding of federal income tax refunds.
   3. Garnishment of wages.
   4. Loss of eligibility for federal student aid.
   5. Difficulty in obtaining other credit.
   6. In most instances, student loans may not be discharged through bankruptcy.
3. You must make payments at the end of your grace period (or immediately upon disbursement of the Supplemental Loan) whether you have received a repayment schedule or not. If your first payment due date is nearing and you have not received a repayment schedule, contact your lender/servicer.
4. You must notify your lender if you change:
   1. Schools.
   2. Your name or address.
   3. Your enrollment status (e.g., withdraw, graduate, or drop to less than half-time status).
5. Upon leaving school, you must notify your lender/servicer of your expected employer and permanent address, the address of your next of kin, and any changes to your social security or driver's license number.
6. If you receive notice that your loan is being serviced by an agency other than your lender, you must refer all further correspondence, inquiries, and payments to the servicer.
7. You should keep copies of all your student loan papers, documents, and correspondence.

The Federal Stafford Loan (formerly GSL) grace period begins the day after you leave school ("leaving school" means last date of attendance, withdrawing, or dropping to less than half-time enrollment status). The grace period for most Federal Stafford Loans is six months; during this period, no payments are due and interest on the loan continues to be paid by the federal government for subsidized loans.

With the subsidized Federal Stafford Loan, interest begins to accrue to you on the day after your grace period ends. Approximately 30-45 days later your first payment will come due. Thereafter, payments will be due once a month until the loan is paid. You will receive a repayment schedule and disclosure statement for each of your student loans from your lender/servicer. This schedule will tell you how much your payments will be, when they are due, and over what period of time you will be paying.

For unsubsidized Stafford Loans, students are responsible for paying interest during the period of time that the principal is deferred. Because most lenders will permit students to defer interest repayment during school enrollment, the interest accrues during this deferred period. This is called capitalization.

A deferment is a period of time (varying in length as indicated below) when you will not be required to make payments on your loans because you temporarily cannot afford the scheduled payments. If you think you are eligible for a deferment, contact your lender/servicer. A deferment is not in force and you are not excused from making loan payments until the documentation is complete.

The types od deferments for the Federal Stafford and SLS programs are:

1. Unemployment.
2. Full-time enrollment at an eligible school.
3. Half-time enrollment at an eligible school under the Federal Stafford or SLS programs during the enrollment period.
4. Participation in a rehabilitation program.
5. Study under an approved graduate fellowship program.
6. Serving an internship necessary for professional practice or service.
7. Temporary or total disability, or inability to work because caring for a temporarily or totally disabled spouse or dependent.
8. Parental leave to care for a newborn, if you attend school in the six months prior to the leave.
9. Mothers who have preschool-age children and are entering or re-entering the work force at less than $1 above minimum wage.
10. Service in the National Oceanic and Atmospheric Administration Corps (NOAA).
11. Active duty service in the U.S. Armed Forces or service as an officer in the Commissioned Corps of the United States Public Health Service.
12. Full-time teaching in a private, nonprofit, or public elementary or secondary school shortage area.

For new borrowers who have a loan with the first disbursement after July 1993, there will be three main types of deferments. These are:

1. In school at least half time or in graduate fellowship.
2. Rehabilitative training for disablement or unemployment up to three years.
3. Economic hardship.

You should contact your lender for details on deferment questions.

Should you become financially unable to make monthly payments, you may be able to suspend, lower payments, or make interest payments only for a short period of time (six-month periods) at the discretion of your lender/servicer.

If you have several education loans with different lenders and multiple monthly payments, you may request that your loans be consolidated to:

1. Obtain one monthly payment.
2. Extend the time for repayment (up to 30 years).
3. Reduce the monthly payment amount.
4. Pay in full one or more of your existing student loans.

The interest rate for the consolidation loan is the weighted average of the loans rounded upward to the nearest whole percent.

To apply for a consolidation loan, you must first contact the holders of your loans to see if any participate in the consolidation loan program. If so, they will provide you with the application and an explanation of the procedure. If your lenders do not offer consolidation, you may contact any other financial institution or secondary market that offers this service.