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Federal Loan Default

It's extremely important to understand that you, and only you, are responsible for repaying the federal loan funds you've borrowed. This is true even if you fail to graduate with a degree, have difficulty locating employment, or if you're not satisfied with your educational experience. If you do not make the required payments on your loan obligation according to the terms of the legal promissory note you signed, and do not apply for a forbearance or a deferment, your loans can go into default, which has serious consequences. In addition, federal student loans are not dischargeable through bankruptcy.

If you default on a federal loan...

Defaulting on a federal student loan is very serious. Here's how to prevent default from occurring...

  1. Make sure you understand your borrowing responsibilities and options.
  2. Always make your loan payments on time.
  3. Promptly notify the UCM Office of Student Financial Services of any changes to your name, address, or any other information that may impact repayment of your loan.
  4. If you begin to have difficulty with your loan payments, consider applying for a forbearance or a deferment. Don't wait! These options are not available to an individual whose student loans have already gone into default.
  5. Consider consolidating your federal student loans into a single educational loan, with one interest rate and one monthly payment.
  6. Maintain accurate records of your loans, as well as all the other financial assistance you received while pursuing your education.

Need more information? The U.S. Department of Education publishes a guide to help students with repaying their defaulted loans. In addition, you're always welcome to contact the UCM Office of Student Financial Services.