Student Loan Private

You must repay your student loan even if you don’t complete or can’t find a job related to your program of study, or are unhappy with the education you paid for with your loan. However, we will discharge (forgive) your loan if you have your loan discharged in bankruptcy, if you become totally and permanently disabled (additional conditions apply), or if you die.

We may discharge some or all of your loan if your school closed before you completed the program, if the school forged your signature or falsely certified that you were eligible for aid, or if you dropped out of school and the school did not pay a refund of your loan money that it was required to pay under federal regulations. Check the school’s informational materials to see how refund policies apply to federal aid at that school. You may also qualify for forgiveness of some of your loans if you teach full time for five years in certain low-income schools and meet other requirements.

■ You must be the biological or adoptive parent (or, in some cases, the stepparent) of the student for whom you are borrowing.
■ Your child must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, your child is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional student, or a ward of the court.
■ You cannot have an adverse credit history (a credit check will be done).
■ In addition, you and your child must be U.S. citizens or eligible noncitizens, must not be in default on
any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.

You apply for a Direct Subsidized and Unsubsidized Loan and other federal student aid by completing a
Free Application for Federal Student Aid (FAFSA). The information from your application will be shared with
the schools that you have identifi ed on the FAFSA. Some schools have additional application procedures—check with your school’s fi nancial aid offi ce to be sure. After your FAFSA has been processed, the school will notify you, usually through an award letter, of the types of aid for which you are eligible.

If you fail to make a payment on time, you’re considered delinquent on your Direct Loan. If you do not make payments for 270 days, you are considered to be in default. Default has severe and long-lasting consequences, including the following:

• The Department of Education can immediately demand repayment of the total amount due on the loan.
• The Department will attempt to collect the debt and may charge you for the costs of collecting.
• The default will be reported to national credit bureaus. Your credit rating will be damaged, which will make it difficult for you to make purchases such as a car or house.
• You are ineligible for Title IV student aid.
• You are ineligible for deferments.
• The Internal Revenue Service can withhold your federal income tax refund.
• Your wages may be garnished.

Generally, you’ll have from 10 to 25 years to repay your student loan, depending on the repayment plan that you choose. Your monthly payment amount will be based on how much you borrowed and how long you take to repay. You may choose one of four repayment plans:

• Standard Repayment Plan - Fixed monthly payments for up to 10 years.
• Extended Repayment Plan - Monthly payments for up to 25 years, depending on the total amount of your Direct Loans. There are fixed and graduated (gradually increasing) payment options.
• Graduated Repayment Plan - Payments that start off lower and then gradually increase, usually every two years. You’ll repay your loan in full within 10 years, depending on the total amount of your Direct Loans.
• Income Contingent Repayment Plan - Your monthly payment is adjusted each year based on your annual income (and your spouse’s income, if you’re married), your family size, and the total amount of your Direct Loans. After 25 years, any unpaid loan amount will be forgiven.

You can change plans at any time. There’s no penalty if you make payments before they are due or pay more than the amount due each month. For more information about these plans see the repayment plan page.