This is the time before you have to make payments on your student loan. It begins after you graduate, leave school or drop below half-time status. NOTE: Not all loans have a grace period (see promissory note).
If you return to school during the grace period, depending on the loan provisions, you may be able to file for a deferment and receive your grace period upon completion of school.
The grace period must be used prior to a deferment for residency or internship.
Most lenders, including UTMB, report your account to a credit bureau as soon as you receive your loan. They update it with every disbursement, payment or missed payment. These lenders can be your best friend when you seek credit.
Other lenders only report your account when you miss a payment or fail to return a deferment form on time.
If you are denied credit on the basis of a credit report, you should request a copy of the report. The credit bureau must provide you a copy free of charge. If information has been reported incorrectly, you should contact the lender to have it corrected. Most commercial lenders use information provided by credit bureaus to make decisions to approve loans for cars, homes, etc.; so failure to make payments or file deferment forms on time could limit your ability to purchase these things in the future.
This is the right to delay payments on your student loan(s). On Federal Stafford, Health Professions, Loans to Disadvantaged Students, NDSL/Perkins and Primary Care Loans you are not charged interest during deferred periods, nor is the deferment time counted in the 10-year maximum repayment period. Interest does accrue in deferred status for Federal Unsubsidized Stafford, HEAL or PLUS/SLS, and is capitalized if you do not pay it. Deferments must be filed each semester for student status and annually fir internship or residency. It is your responsibility to request the forms, complete them and return them to your lender on time. Failure to return your deferment form at the proper time could result in late charges being due, your loan going into default and denial of your right to defer the loan. You must contact your lender in the event you do not complete your residency training.
This applies to situations in which you are willing but unable to make required loan repayments. Under forbearance, you may temporarily cease making required payments, make smaller monthly payments or have an extension in time for making payments. Lenders may require you to request forbearance in writing. Interest does accrue during forbearance on all types of loans. You may be required to pay the interest during the time of the forbearance. The time of forbearance does not extend the 10-year maximum repayment period.
An option available to the lender. The lender has the right to make the full amount of your loan due in full. Meaning they will no longer accept monthly payments. This usually occurs when you have defaulted on the loan.
DISCLOSURE STATEMENT/REPAYMENT SCHEDULE:
Your lender will send you a disclosure statement/repayment schedule at least 60 days prior to the first payment due date. These forms will contain the amount borrowed, the interest rate, due date, and the amount of monthly payment.
PREPAYMENT: (early payments)
You may pay a loan prior to the start of the repayment schedule or make larger payments than required in your repayment schedule.
There is no penalty for early payments on any loan fund. Interest accrues on the outstanding balance monthly. The faster you pay your loan, the less interest you will pay.
COLLECTION AGENCY AND LEGAL ACTION:
If your loan is delinquent, it may be referred to a collection agency, which could charge from 33-1/3 percent to 50 percent of your balance, or more, according to your promissory note. The loan may also be referred to an attorney in which case a lawsuit might be filed. You may then be required to pay attorney fees and court costs.
PENALTY AND LATE CHARGES:
According to the terms of your promissory note, the lender may assess a late charge and/or penalty charge if you fail to make an installment when due or file timely evidence of a deferment.
To avoid penalty and/or late charges, payments or forms for deferment in lieu of such payments must reach the lender on or before the due date of your scheduled installment.
Failure to repay your loan(s) constitutes default. If you are delinquent on repayment for 270 days, your loan may be placed in default. This can happen without your knowledge if your lenders cannot contact you, so always provide them with your current address. If the lender is reimbursed, then the guaranty agency and/or federal government (whichever agency paid your lender) now owns your loan. They will collect from you! Even bankruptcy will not shield you. Your loan must be repaid even if you did not finish school, did not graduate, do not get a job, or were not satisfied with your educational experience. A loan in default is subject to the following actions:
REPAYING DEFAULTED LOANS:
In order to repay a defaulted loan, you should contact the loan holder and ask what you can do. The lender probably will try to set up a manageable repayment schedule. If your payments are on time for a year, you may be eligible for rehabilitation. A lender can they buy your loan and you could reacquire the rights and privileges of a borrower in good standing.
PERKINS LOAN REHABILITATION:
A defaulted loan is considered rehabilitated if "the borrower of a loan made under this part who has defaulted on the loan" makes the required 12 payments. Rehabilitation is available to all defaulted borrowers with a loan made under the Federal Perkins Loan Program. If a borrower requests loan rehabilitation, the institution or its servicer must allow the borrower to rehabilitate his or her loan. The borrower may only rehabilitate a defaulted loan once. After the 12th payment has been made, the borrower is brought current and is no longer considered to be delinquent or in default.
Consequences of rehabilitating a defaulted loan of which the borrower should be advised include returning the borrower to regular repayment status, treating the first payment made under the twelve consecutive payments as the first payment in a new repayment period of up to 10 years, instructing any credit bureau to which the default was reported to remove the default from the borrower's credit history, and the re-establishment of the borrower's eligibility for Title IV student financial assistance.
Assistant Director of Enrollment Services
for Financial Aid
|Financial Aid staff|
|Student Loan Survival Guide
Financial Aid and Financial Literacy
Hours of operation:
8:00 a.m. to 5:00 p.m.
Monday through Friday
(except for official holidays)
Office of Enrollment Services
The University of Texas Medical Branch
301 University Boulevard
Galveston, Texas 77555-1305
Telephone: (409) 772-1215
Fax: (409) 772-4466