Borrower's Responsibilities

When you obtain a federal student loan you have certain responsibilities. It is important to consider the following:

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.

Signing a promissory note means you agree to repay the loan

  • 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.
  • The U.S. Department of Education does not guarantee the quality of education you receive or that you will find a job in your field of study.

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

  • Graduate

  • Withdraw from school

  • Drop below half-time status (6 credits at LWTC)

  • Change your name, address or Social Security number

  • Transfer to another school

Entrance and Exit Counseling

  • For Direct Loans, you must complete an Loan Entrance Counseling session before your loan will be originated at LWIT.  This tutorial 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 or drop below 1/2 time (6 credits) 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 on-line.