You’ve attended college or received other education beyond
high school, and you received federal student loans*
from the US Department of Education (ED) along the way. You’re
now about to deal with paying them back. You’ll need to know
how to manage your student loan debt to avoid repayment problems.
This publication explains available repayment options so you can
successfully repay your debt. It will also tell you what steps to
take so you won’t get behind in payments or go into default.
Federal student loans are real loans,
just like car loans or mortgage loans.
You can’t just get out of repaying a student loan if your financial
circumstances become difficult any more than you could get out of
a car loan or mortgage, unless you qualify for bankruptcy. But,
it’s very difficult to have federal student loans discharged
in bankruptcy; this happens only rarely. Also, you can’t cancel
your student loans if you didn’t get the
education you expected, didn’t get the job you expected, or
didn’t complete your education, unless you leave school for
a reason that qualifies you for a discharge of your loan**.
Remember, your student loans belong to
you; you have to pay them back.
*1)
Federal Perkins
Loans
2)
Federal Family
Education Loans (FFELs), consisting of subsidized and unsubsidized
Federal
3)
William D.
Ford Federal Direct Loans (Direct Loans), consisting of subsidized
and unsubsidized Federal Direct Stafford/Ford Loans, Federal
Direct PLUS Loans (for parents who borrow for their children),
and Federal Direct Consolidation Loans
**
For example, you might have left school early because
1)
You became
totally and permanently disabled. However, your condition cannot
have existed before you applied for your federal loan, unless
a doctor certifies that your condition substantially deteriorated
since the loan was made.
2)
Your school
falsely certified your eligibility or signed your application
or promissory note without your approval.
3)
Your school
closed, and you couldn’t complete your program of study.
In this case, you cannot have withdrawn from the school more
than 90 days before it closed. (The day the school closed is
defined as the day it stopped providing educational instruction
in all programs.) You don’t qualify for a loan discharge
if you withdrew before your school closed, but you completed
the program of study for which the loan was intended either
by transferring academic credits or hours earned at the closed
school to another school, or by any other means. Note that the
state agency or other nonprofit agency that guaranteed the loan
makes the final decision on whether your loan is eligible for
discharge.
