Debt Management Guide
What you need to understand about repaying your student loans, managing your debt, and your rights and responsibilities as a borrower.
Plan:
- Look for outside sources of grants and scholarships to help reduce your loan expectation. Outside awards can be used to reduce the term-time job amount included in your financial aid package.
- Find term-time and summer employment to assist you with paying for your educational and personal expenses. Look for Student Service Positions here at ETSU.
- Train yourself to save some money each month.
- Don't respond to credit card applications
Budget:
- Establish a budget to help you control and manage your expenses.
- If you have a credit card, maintain a strong credit record by only charging what you know you can pay back promptly. When you are a full-time student, credit card debt can be very difficult to manage.
Borrow wisely:
- Borrow only what you need. Any unsubsidized interest that accumulates is added to the original amount you borrowed and increases the amount that must also be paid back.
- Keep accurate and well-organized records of your signed promissory notes, disclosure statements, and repayment schedules.
- If you have federal debt, you can review your account information through your loan servicer.
- Paying all or part of your loans off early will reduce your principal balance, total interest paid, and possibly your length of repayment.
Summary of Borrower Rights:
As a borrower, you have the right to:
- Obtain written information about your loan debt obligations and your rights and responsibilities as a borrower.
- Receive a grace period and an explanation of what this means.
- Receive a repayment schedule, before you begin repaying your loans, which includes information about interest rates, fees, the balance you owe, and the number of payments.
- Defer or Forbear repayment of your loans for certain defined periods, if you qualify and if you request it.
- Prepay your loan in part or in full at any time without penalty.
- Decline all or part of your loan money before it is disbursed by notifying the school.
- Receive a copy of your promissory note before the loan is disbursed.
- Receive documentation that your loans are paid in full.
- Receive information on options for loan discharge, loan forgiveness, or loan consolidation.
- Receive a Disclosure Statement each time a loan disbursement is made detailing the loan program, the amount credited or debited to your term bill and the date of each transaction.
- Receive notification, if you are in your grace period or repayment, no later than 45 days after a lender assigns, sells, or transfers your loan to another lender.
Summary of Borrower Responsibilities:
As a borrower, you have the responsibility to:
- Attend and complete Exit Counseling before you graduate or enroll less than half-time.
- Repay your loans on time.
- Make monthly payments on your loan after your grace period ends, unless you have a deferment or forbearance.
- Notify your lender or loan servicer of anything that might alter your eligibility for an existing deferment or forbearance.
- Notify your lenders if you:
- Move/change your address
- Change your name, phone number or social security number
- Change employers or your employer’s address or telephone number changes
- Withdraw from school or enroll less than half-time
- Transfer to another school
- Do not enroll or return to school for the period in which the loan was intended
- Change your expected graduation date
- Graduate
Glossary of Terms:
Accrued Interest: The amount of money in interest that has accumulated on the principal balance of a loan.
Borrower: The person who has signed and agreed to the terms of the promissory note and is responsible for repaying the loan.
Capitalized Interest: The amount of accrued interest added to the principal balance of a loan when it enters repayment.
Collection Agency: A company that specializes in recovering delinquent or defaulted loan payments.
Consolidation: Combining one or more of your federal loans into a new loan.
Default: A state of delinquency occurring after you have violated the terms of your promissory note, e.g. have not made a payment or arrangements for at least 270 days.
Deferment: The temporary postponement of loan payments while enrolled at least half-time, on a fellowship, or on active duty.
Delinquent payments: Payments not received by a specified due date established by the lender.
Exit Counseling: A counseling session for student loan borrowers who are graduating or enrolling less than half-time.
Fixed Interest Rate: An interest rate that remains the same over the life of the loan.
Forbearance: The temporary postponement or reduction of loan payments due to financial hardship.
Grace Period: The six or nine month period of time beginning when a student graduates, or enrolls less than half-time, during which the student borrower is not required to repay the interest or principal of the loan.
Maker: See “Borrower” above.
Promissory Note: A legally binding contract between a lender and a borrower which contains the terms and conditions of the loan including how and when the loan must be repaid.
Variable Interest Rate: A rate that fluctuates over the life of the loan and is generally tied to the Treasury Bills or the Prime Rate.
Loan Repayment Charts
(Based on a ten year repayment term)
| 3.9% Federal Direct Subsidized or Unsubsidized Stafford Loans | |||
|---|---|---|---|
| Amt. Borrowed | Mo. Pymt | Interest | Total Paid |
| $2,500 | $50 | $233 | $2,733 |
| $5,000 | $50 | $1,046 | $6,046 |
| $7,500 | $76 | $1,569 | $9,069 |
| $10,000 | $101 | $2,092 | $12,092 |
| $12,500 | $126 | $2,616 | $15,116 |
| $15,000 | $151 | $3,139 | $18,139 |
| $17,500 | $176 | $3,662 | $21,162 |
Who to Contact:
| Federal Direct Stafford Loans | Federal Perkins Loans |
|---|---|
|
Direct Loan Servicing Center |
The Federal Perkins Loan Program ended September 30, 2017. If you have received a Perkins Loan in the past and have questions, please contact ECSI. Their information can be found at Heartland ECSI. You may also contact the ETSU Bursar’s Office at 423-439-4212, or Bursar@etsu.edu |