Some of the pressing points for people who make the most of loans from the federal government to finance their college career is federal student loans payment. Particularly with the unsure economy these days, where even those with advanced degrees are having difficulties getting a job, students are having second thoughts about getting a loan with the worry that they may not be capable to repay it on time and will commit a federal offense.
The first thing that students need to know with regard to federal student loans payment is that anyone taking advantage of it is given a sufficient grace period to start paying for the loan. Whether a student drops out of college, takes a leave or graduates, there is a period of time before he or she is obliged to start repaying for the federal loan. The grace period for federal student loans payment is dependent of what type of loan the student has decided to get.
For borrowers in the Federal Stafford Loan (either in the Direct Loan Program or Federal Family Education Loan (FFELSM) Program), the allotted grace period is six months from the date of official leave, dropping out, or graduation. For Federal Perkins Loans, the federal student loans payment schedule starts nine months after graduation, leave, or dropping out.
A different payment schedule is provided for borrowers of the Direct PLUS loan. This loan starts as soon as the original PLUS loan is fully paid out, and the due date for the first payment is 60 days after the last payment.
But no matter what loan the borrower takes advantage of, he or she will be given information regarding federal student loans payment schedules and other details by the loan servicer. It is imperative that the borrower makes a full and timely loan payment either monthly or according to the schedule arranged and provided by the loan servicer. Not making payments on time will result in default, which in turn brings grave consequences.
Defaulted payments, which mean loans that remain unpaid on time, may resort to different actions of the different parties involved in the loan. This includes the borrower’s school, the making or owning financial institution of the loan, the guarantor of the loan, and the federal government.
Payments that were not made on time will result to national credit bureaus being notified of the student’s default, which will adversely affect his or her credit rating. This can make it difficult for the defaulting student to make major purchases like a car or a house. For students who left school and defaulted on their payments, they will not be eligible to take advantage of additional federal aid. Moreover, payments can be deducted from the paycheck of borrowers in default. In addition to what is owed, late fees may also be charged to delinquent borrowers. Lastly, the borrower can be sued.
Thus, it is very important for payments to be made by the borrower on time, according to schedule. Borrowers can actually choose from various repayment plans that should cater to their individual needs. If the borrower chooses the correct repayment plan, federal student loans payments can be made without any problems.