Repayment Information

Exit Counselling

Complete an Exit Counselling Interview before you leave University or graduate. You will be counselled on your obligations, rights and options under the terms of your loan. This session will cover repayment options, deferments and other important information you may need during your repayment term. During this session you will need to provide the following information:

• Name and address of closest living relative
• Two references (not the same as closest living relative) and with different addresses

Repayment Plans

When you leave university or drop below half-time enrolment, your grace period begins. This gives you up to six months before you must start making monthly principal and interest payments on your loans. If you re-enter university at least half time during your grace period, it is renewed for another six months. So you have the full grace period available when you leave university again.

Before repayment starts, you will be provided with repayment options and a Repayment Schedule from your lender or servicer for each type of loan you have.

If you do not receive these schedules toward the end of your grace period, contact your lender because repayment begins whether or not you're aware of it. Also, all of the borrower benefits will only apply IF you make your first payment on time.

If you plan ahead, the repayment process will go smoothly. Start by knowing all your options. You will have a choice to make regarding the type of repayment plan you would like to use:

• Standard Repayment - Under this plan, your monthly payment will remain the same over the entire repayment period. This repayment plan is the most economical. The term is for a maximum of 10 years.
• Graduated Repayment - As the name suggests, this plan typically begins with smaller payments, followed by a gradual increase in payments at specified intervals. Under this plan you will probably pay more interest over the term of the loan. The term is for a maximum of 10 years.
• Income-Sensitive Repayment (FFEL Loans only) - This plan ties the size of your payment to your income level, with adjustments to your payment made annually. The monthly payment must be large enough to cover accrued interest charges. This plan also may increase the amount of interest you pay over the term of your loan. The term is up to 10 years. However, your lender can use forbearance to lengthen the term for up to five additional years (15 years total).
• Extended Repayment - This option is available for those who first borrowed on or after October 7, 1998, and who then accumulated loans that totalled more than $30,000. If you're one of these borrowers, you may extend your Standard or Graduated Repayment plan for up to a total of 25 years.
• Income Based Repayment (Effective July 1 2009) - This option is a new repayment plan for the major types of federal loans made to students. Under IBR the required monthly payment is capped at an amount that is intended to be affordable based on income and family size. You are eligible for IBR if the monthly repayment amount under IBR will be less than the monthly amount calculated under a 10 year standard repayment plan. If you repay under the IBR plan for 25 years and meet other requirements you may have any remaining balance of your loan(s) cancelled. For more important about IBR go to IBR Plan Information.
• Income Contingent Repayment (ICR) (Direct Loans Only) - This plan gives you the flexibility to meet your Direct Loans obligations without causing undue financial hardship. Each year, your monthly payments will be calculated on the basis on your adjusted gross income. Click here for more information about IBR.
  

Download your repayment options information sheet here

So how much could you be expected to repay on your Stafford loan? A typical repayment plan assumes the loan principal plus interest, spread out over 10 years:

Student Debt on Graduation

Students attending CQUniversity have a variety of differing educational experiences, and the debt levels of each student reflects individual choices and knowledge about the usage of the loan program options.

We are committed to ensuring that students leave this institution with the lowest amount of debt possible and we will actively work with you to ensure this. Through your life cycle as a student utilizing US Federal funds we will be actively tracking your debt and benchmarking it with others who have studied in the same method and course that you are enrolled in.

Loan Consolidation

By the time you finish university, you may have a number of loans. These loans may be with more than one lender and may have different terms. Repayment can become fairly complicated if you have to make different payments at different times of the month. Consolidation is a way to make repayment of multiple loans less complicated.

You can consolidate all your federal student loans into one loan with a fixed rate and a single, lower monthly payment. You pay no additional fees to consolidate your loans. More importantly, you may reduce the amount of each monthly payment by extending your repayment term. But remember that a longer repayment term increases the amount of interest you pay over the term of your loan.

Consolidation loans offer terms ranging from 10 to 30 years. Repayment options on consolidation loans include: Standard, Graduated and Income Sensitive repayment plans. To be eligible for a consolidation loan, you must be in a grace period, repayment, deferment, or forbearance.

It is important to research loan consolidation very carefully as you may lose some borrower-benefits offered by your original lender. If you are uncertain of your loan amounts (principle and interest) and who owns your loans, you can track down your loans online - CLICK HERE

The interest rate on a consolidated loan is determined by taking the weighted average of your current loans interest rates and rounding up to the nearest 1/8 % (this means that the interest rate on a $10,000 loan ‘counts' more towards the bottom line than a $5,000 loan's interest rate) This interest rate is fixed, which means it will not change throughout the life of the loan, whereas your current loans are variable and can either increase or decrease on an annual basis.

You should first discuss consolidation with your existing lenders. If your lender does not consolidate, they will most likely be able to recommend another lender.

While interest rates and length of repayment will not vary between lenders, some may offer incentives (such as interest rate reductions for on-time repayments) to their customers that others do not. It is highly recommended that you shop around for those incentives before deciding on a consolidating lender.

As of July 1, 2006 students are not allowed to consolidate whilst they are in-school.

Consolidation Loan Terms

Deferment

One major advantage of borrowing through the Federal Direct Loan program is the option you have to postpone repayment for a period of time under certain conditions. However, it is important to note how interest must be paid or not paid on various loans:

• Federal Subsidized Stafford Loans: interest is paid by the federal government during in-university, grace, and authorized deferment periods.
  
• Federal Unsubsidized Stafford Loans: the borrower is responsible for paying the interest that accrues during in-university, grace, and authorized deferment periods.

SOME COMMON DEFERMENT OPTIONS (FOR BORROWERS WHOSE FIRST LOAN WAS DISBURSED ON OR AFTER JULY 1, 1993)

You may need to complete and submit separate deferment forms for different types of loans. With Direct Loans, one deferment form is usually all that is necessary.
You should continue making loan payments until you have been notified that the deferment is granted.

Keep copies of all forms and correspondence related to your deferment.

CLICK HERE if you wish to find out more about deferment.

Forbearance

If in temporary financial difficulty and there no deferment options available, you can request forbearance from your lender or servicer. Forbearance is granted at the lender's discretion and allows you to have months added to the term of your loan, temporarily reduce the amount of your monthly payment or temporarily suspend monthly payments.

There are several forbearance options available. The two most common types of forbearance are:

• Economic Hardship Forbearance: If your student loan payments exceed 20% of your total monthly income you can apply for this type of forbearance. It is given in 12- month increments for a maximum of three years.
• Administrative Forbearance: May be granted by your lender if you are delinquent on payments prior to entering a period of deferment.

Note that interest continues to accrue on your loan during forbearance. That interest must be repaid, which can result in higher monthly payments once the forbearance has ended. The federal government does not pay the interest on Subsidized Stafford loans while your loans are in forbearance.

CLICK HERE to obtain more information about forbearance options.

Delinquency and Default

When your monthly payment is 30 days or more overdue, you are considered to be delinquent on your loan. Most lenders and servicers will contact you directly about delinquent payments and begin collection activity. Your delinquency may be reported to a credit bureau which could damage your credit rating.

If you expect to have a problem making a monthly payment, contact your lender immediately. It is always easier to discuss alternatives before the due date rather than after a payment is late.

If you fall 270 days behind on a scheduled payment, you are legally in default on your loan agreement. The lender can assume that you are not going to repay; and the lender may declare the entire amount you owe, including interest, as immediately due and payable.

Defaults are reported to credit bureaus and stay on your credit record, whether or not you eventually pay off the loan. The consequences of default are severe.

• You are liable for late charges which can be added to the principal of your loan, and on which you will then pay interest.
• When your loan is in default, your US federal income tax refunds can be withheld to repay the loan.
• Your wages may be garnisheed (a portion withheld for repayment).
• You may have to pay attorney's fees and court costs.
• You lose eligibility for all federal and state financial aid until you have made satisfactory repayment arrangements on the defaulted loan.
• In a profession that requires a license to practice, that license can be denied renewal until you make satisfactory payment arrangements on your student loan.

Loan Cancellation

Under certain specific circumstances, you can have all or part of your loan cancelled, discharged, or forgiven. For more information go to www.studentaid.ed.gov/discharges.