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Know Your Responsibilities. A Student Loan Q&A

This learning opportunity provides information about your responsibilities as a student loan borrower.

Take our Q&A to find out how much you know…

Am I responsible for the interest that accrues while I am in school?

A. No. Interest doesn't start to accrue until after graduation.
B. No. The government pays it while I am in school.
C. Yes, but I am only responsible for the interest that accrues on my unsubsidized loans while I am in school.
D. None of the above.

The correct answer is C. You are responsible for paying the interest that accrues on your unsubsidized loan from the date of disbursement. Any unpaid interest that remains at the end of an in-school, deferment, forbearance or grace period will be capitalized (added to the principal balance of your loan).

The government will pay the interest that accrues on your subsidized loan while you are in-school, during your grace period, and during authorized periods of deferment for any loan disbursed prior to July 1, 2012. You are responsible for the interest that accrues on your subsidized loan during your grace period if the loan was disbursed on/after July 1, 2012 and prior to July 1, 2014.

Learn more about interest.

Do I have to pay my loan back if I withdraw from school?

A. No. If I don't earn a diploma or certificate, I am not responsible for paying back my loan.
B. Yes. Even if I don't get a diploma or certificate, I still have to pay back the funds I borrowed for school.
C. It depends on my school's policy.
D. None of the above.

The correct answer is B. You must still pay back your student loan regardless if you withdraw from school. However, a portion of your loan may be able to be returned, depending on the amount of time you spent at the school. Contact your school's Financial Aid Office to discuss their refund policy. Keep in mind that withdrawing from school is not the answer and it can impact your future salary.

Learn more about what you can earn with a degree.

If I declare bankruptcy are my loans dischargeable?

A. No. Student loans are never discharged as a result of bankruptcy.
B. Yes. All debt is dischargeable.
C. Yes, but only if the courts approve my undue hardship petition.
D. None of the above.

The correct answer is C. Student loans are generally non-dischargeable due to bankruptcy. Therefore, you are still responsible for the repayment of the debt. However, the court may consider discharge of your student loans if you file an undue hardship petition. It is important to note that the courts rarely approve these requests.

Learn more about bankruptcy.

Are there any consequences if I don't pay my student loan and default?

A. Yes. My entire loan balance (and penalties up to 25%) will become immediately due in full.
B. Yes. The government may keep my income tax refund to apply toward my loan debt.
C. Yes. My wages may be garnished and my employer may be legally obligated to forward up to 15% of my salary toward repayment of my loan.
D. Yes. I will not be eligible to receive Federal Student Aid.
E. All of the above.

The correct answer is E. If you do not have a deferment or forbearance and you don't make any loan payments for 270 days on a federal loan, your lender/loan servicer will take steps to place the loan in default. Don't let this happen! Default can have devastating consequences.

Learn more about default.

If I don't find a job, am I still responsible to pay back my loan?

A. No. If I don't find a job then I don't have to pay back my student loan.
B. Yes, but only if I find a job in my field of study.
C. Yes. Regardless if I find a job I am still responsible for paying back my student loan.
D. None of the above.

The correct answer is C. Regardless if you find a job you are still responsible for making payments on your student loan. Fortunately, there are options that may be available to your to postpone payments under certain circumstances.

Learn more about deferments and forbearances.

Are there any circumstances that I may be able to get my loan forgiven?

A. Yes. I may be eligible for loan forgiveness because I work full-time in the public service field.
B. No. I am responsible for the repayment of my loan until it is paid off.
C. Yes. My parents promised they would pay off my loan, but they can't do it now.
D. None of the above.

The correct answer is A. You MUST pay back your student loan, even if your parents agreed to pay it for you. However, there are a few circumstances in which your debt may be cancelled and you won't have to pay (a situation known as "discharge" or "forgiveness"). Working full-time in the public service field is just one circumstance that may qualify you for discharge or forgiveness.

Learn about the other circumstances that may qualify you for loan discharge or forgiveness.

What is the best way to keep track of my federal loan information?

A. Through my school's Financial Aid Office.
B. Online through the National Student Loan Data System (NSLDS).
C. Through my mom or dad.
D. By reading copies of my loan documents.
E. All of the above.

The correct answer is B. NSLDS is the best source to track your federal student loans because it centralizes all of your federal student aid information in one place. This online tool from the U.S. Department of Education includes information from your school, lenders, servicers, and guarantors. Sign in to view details about your federal loans, as well as a history of your federal student aid.

Go to NSLDS.