What are my rights as a borrower?
- You must be provided with a copy of your promissory note. The original promissory note must be returned to you when the loan is paid in full.
- You have the right to a grace period before your repayment period begins and interest charges start to accumulate. The exact length of your grace period is shown on your promissory note.
- You must be told the total amount of your debt (principal and interest), what your interest rate is, the total interest charges on your loan, and what other fees you should expect during the repayment period.
- You must be given a loan repayment schedule that lets you know when your first payment is due, and the number, frequency and the amount of all payments.
- You must be told where to send your payments and whom to contact if you have questions about your loan.
- You must be given a list of deferment and cancellation conditions and the conditions under which the Department of Defense will repay your loan.
- You must be given an explanation of options for prepaying your loan at any time without penalty, for refinancing your loan, and for taking advantage of a consolidation loan.
- You have a right to forbearance if your total loan debt is equal to or greater than 20% of your adjusted gross income. Forbearance is renewable every year for up to three years.
All the above will be provided as part of your entrance or exit counseling.
What are my responsibilities as a borrower?