How do I apply for a Perkins or Stafford Loan?
The same way you do the other federal student aid, by completing the Free Application for Federal Student Aid (FAFSA). You do not need a separate loan application. But, you will need to sign a promissory note, a binding legal document that states you agree to repay your loan according to the terms of the note.
Can I cancel my student loan if I change my mind, even if I've signed the promissory note agreeing to the loan's terms?
Yes. Your school must notify you in writing whenever it credits your account with your loan funds. You may cancel all or a portion of your loan if you inform your school within 14 days after the date your school sent you this notice, or by the first day of the payment period, whichever is later. (Your school can tell you the first day of your payment period.)
How do my parents apply for a PLUS Loan?
Your parents complete a Direct PLUS Loan application and promissory note that you'll get from your school's financial aid office. They will have to pass a credit check. If they don't pass they might still be able to receive a loan if they can demonstrate that extenuating circumstances exits, or if someone thy know, who can pass agrees to endorse the loan and promises to repay it if your parents don't.
Are my parents responsible for my educational loans?
No. Parents are, however, responsible for the Federal PLUS loans. Parents will only be responsible for your educational loans if you are under 18 and they co-sign your loan. In general you and you alone are responsible for repaying your educational loans.
On the other hand, if your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments, not them.
If I take a leave of absence, do I have to start repaying my loans?
Not immediately. The subsidized Stafford loan has a grace period of 6 months and the Perkins loan a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period is used up.
If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.
When do I start paying back my student loans?
If you're attending school at least half-time, you have a period of time after you graduate, leave school, or drop below half-time status before you must begin repayment. This period of time is called a "grace-period".
Federal Perkins Loans- the grace period is nine months. If you're attending less than half-time, check with your financial aid office to determine your grace period.
Direct Stafford Loans- the grace period is six months.
Subsidized loan- during the grace period, you don't have to pay any principal and you won't be charged interest.
Unsubsidized loan- you don't have to pay any principal, but you will be charged interest. You can either pay interest as you go along or it will be capitalized later.