Loan Responsibilities

When you obtain a federal student loan you have certain responsibilities. Here are some important ones:

Think about how much you're borrowing

  • Think about what your repayment obligation means before you take out a student loan.

  • If you don't repay your student loan on time or according to the terms in your Master Promissory Note, you could default on this legal obligation, which has serious consequences and will adversely affect your credit rating.

Make payments regardless of receiving billing notices

  • You must make payments on your loan even if you don't receive a bill or repayment notice.

  • Billing statements (or coupon books) are sent to you as a convenience. You're obligated to make payments even if you don't receive any reminders.

  • You must also make monthly payments in the full amount required by your repayment plan. Partial payments do not fulfill your obligation to repay your student loan on time.

  • If you cannot make your full monthly payment, contact your lender. Many times lenders will work with the borrower if they are experiencing economic hardship.

Continue to pay while waiting for deferment or forbearance approval

  • If you apply for a deferment or forbearance, you must continue to make payments until you have been notified that your request has been approved.

  • If you don't you might end up in default

  • Keep a copy of any request form you submit, and document all contact you have with the holder of your loan.

Notify your lender or loan servicing agency when you...

  • Graduate;

  • Withdraw from school;

  • Drop below half-time status (6 credits at Lake Washington Institute of Technology);

  • Change your name, address or Social Security Number;

  • Transfer to another school

Receive Entrance and Exit Counseling

  • For Direct Loans, you must complete an Loan Entrance Counseling session before you're given your first loan disbursement, unless you have previously borrowed a Stafford Loan. This session provides you with useful tips and tools to help you develop a budget for managing your educational expenses and helps you to understand your loan responsibilities.

  • You must receive Loan Exit Counseling Session when you leave school to make sure you understand your rights and responsibilities as a borrower. You will receive information about repayment and your loan provider will notify you of the date loan repayment begins (usually six months after you graduate, leave school or drop below half-time enrollment). Exit Counseling may be completed online. Sign your Master Promissory Note

Signing a promissory note means you agree to repay the loan

  • To receive loan funds from the Federal Direct Loan Program students must sign a Direct Loan Master Promissory Note. Students may do this online using their FAFSA PIN number at Student Loans, or may request a paper Promissory Note from the Financial Aid office.

  • When you sign an MPN, you are agreeing to repay your loan according to the terms of the note.

  • The note states that except in cases of loan discharge (cancellation), you must repay the loan, even if you don't complete your education.

  • Also, you must repay your loan even if you can't get a job after you complete the program or you didn't like the education you paid for.

Signing your Master Promissory Note (MPN) on-line

  • Students may sign their MPN on-line using their FAFSA PIN number at Student Loans.

Signing a paper Master Promissory Note (MPN)

If you prefer, you may request a paper MPN from the Financial Aid office. Please be prepared to provide the following information:

  • The MPN requires names, addresses, and phone numbers of two personal references.

  • References must live at different addresses from each other and cannot live at your address unless a parent.

  • Personal references should be individuals who will know where to contact you if you should move to a new address.

  • The Financial Aid office will mail your MPN to the appropriate address.