Borrowers Rights and Responsibilities

It is important that students and borrowers understand their rights and responsibilities when receiving financial assistance.

Borrower’s Rights

As a borrower, you have the right to the following:

• Written information on your loan obligations and information on your rights and responsibilities as a borrower;
• A copy of your MPN either before or at the time the loan is disbursed;
• A grace period and an explanation of what this means;
• Notification, if the Department transfers your loan to another servicer without your consent;
• A disclosure statement, received before you begin to repay your loan, that includes information about interest rates, fees, the balance you owe, and a loan repayment schedule;
• Deferment or forbearance of repayment for certain defined periods, if you qualify and if you request it;
• Prepay your loan in whole or in part at any time without an early-repayment penalty; and
• Documentation when your loan is paid in full.

Borrower’s Responsibilities

• Completing exit counseling before you graduate, leave school, or drop below half-time enrollment;
• Repaying your loan according to your repayment schedule even if you do not complete your academic program, are dissatisfied with the education you received, or unable to find employment after you graduate;
• Notifying your lender or loan servicer if you:
  • move or change your address,
  • change your telephone number,
  • change your name,
  • change your Social Security number, or
  • change employers, or if your employer’s address or telephone number changes.
• Making monthly payments on your loan after your grace period ends, unless you have a deferment or forbearance; and
• Notifying your lender or loan servicer of anything that might alter your eligibility for an existing deferment or forbearance

Other Considerations:

• All courses must be required for your degree. You must attend all your classes and be making satisfactory academic progress
• Students must be enrolled at least half-time to be eligible for federal loan programs. If you enroll less than half-time, you will enter your grace period. If you do not re-enroll at least half-time before your grace period ends, you will be in repayment.
• Pay any accrued interest while you are still in school to avoid interest capitalization at repayment. To pay your accrued interest, you will need to create an account with your federal loan servicer. Borrowers can find their federal loan servicer by logging into your dashboard at studentaid.gov. If you have never borrowed or have just recently borrowed your first federal loan, your loan servicer may not have been assigned yet.
• Avoid defaulting on your student loans. If you are having difficulty making monthly payments, contact your loan servicer for help and information.
• Borrowers should keep track of how much you’re borrowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need for your school-related expenses.

National Student Loan Data System (NSLDS)

The National Student Loan Data System (NSLDS) is the national database of information about loans and grants awarded to students. NSLDS provides a centralized, integrated view of federal student aid loans and grants that are tracked through their entire lifecycle from aid approval through disbursement and repayment (if applicable).

To access NSLDS, login to studentaid.gov, using the FSA ID and password used to file your FAFSA.  

Please note: Institutions that enter into an agreement with a potential student, student, or parent of a student regarding Title IV, are required to inform the student or parent that the loan will be submitted to the NSLDS and will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.

Federal Loan Resources

FEDERAL STUDENT LOAN BASICS FOR STUDENTS 

Federal Loan Options and Responsibilities