Address changes: Promptly report changes in address to each lender to avoid declarations of default and penalties.
In-school deferment: Students performing post-graduate work must annually file a deferment form with each lender.
Forbearance: Lenders may revise the payment schedule if your monthly income is too low to meet your repayment obligations, or if you and your spouse have excessive combined repayments. Some lenders will grant a period of forbearance that involves payment of interest only.
Loan consolidation: Consolidation can reduce monthly payments and give borrowers more disposable income by extending the repayment period from 10 years to 30 years. It also provides the convenience of receiving one monthly statement and making one monthly payment. The disadvantage is that the longer you take to pay off your loan, the more interest you will pay. A borrower may be able to consolidate all federal loans. There are no fees for federal loan consolidation. Contact your lender/servicer for more details on loan consolidation.
Default: Late notices will be sent when payments are not received. Different loans have different periods before the lender considers them delinquent and turns the account over to a collection agency. The costs of collection and penalties are then added to the loan, and in some cases the loan must be repaid in full. Stanford University regulations prohibit the release of transcripts or any other information about a graduate if a loan is in default.
Bankruptcy: In many states, legislation precludes a person from canceling educational loans because of bankruptcy for a period of up to seven years after repayment begins. Also, many courts are refusing to cancel educational loans at all.
Early repayment: A borrower may prepay all or part of a loan at any time without penalty (applies to federal loans, check for individual policies of private loan lenders).
