This must be undertaken prior to your departure from La Trobe University. Complete an Exit Counselling Interview before you leave University or graduate.
You will be counseled on your obligations, rights and options under the terms of your loan, including repayment options, deferments and other important information you may need during your repayment term.
During this session you will need to provide the following information:
- name and address of closest living relative
- two references (not the same as closest living relative) and with different addresses.
When you leave university or drop below half-time enrolment, your grace period begins. This gives you up to six months before you must start making monthly principal and interest payments on your loans. If you re-enter university at least half time during your grace period, it is renewed for another six months, so you have the full grace period available when you leave university again.
Before repayments start, you will be provided with repayment options and a repayment schedule from your lender or servicer for each type of loan you have.
If you do not receive these schedules towards the end of your grace period, contact your lender because repayment begins whether or not you're aware of it. Also, all of the borrower benefits will only apply IF you make your first payment on time.
Your obligation to repay becomes legally binding the moment your sign the Master Promissory Note and authorises the transfer of fund to your student account.
Your loan obligations do not reduce or go away:
- If you do not complete your course
- You are unable to find employment on course completion
- You are not satisfied with the course or other services provided by the university
- You are notified of your loans being sold to a different lender.
If you do not receive these schedules towards the end of your grace period, contact your loan servicer because repayment begins whether or not you're aware of it. Also, all of the borrower benefits will only apply IF you make your first payment on time. You must make your repayments on time unless you have made special arrangements with your loan servicer. A minimum monthly loan payment is essential and this will vary based on the amount you borrow and the repayment plan you choose. If you plan ahead, the repayment process will go smoothly.
Start by knowing all your options so you can make a sound decision regarding your repayment when the time comes. Further information on loan repayment can be found at Direct Loan Repayment.
Student debt on graduation
Students attending La Trobe University have a variety of differing educational experiences, and the debt levels of each student reflects individual choices and knowledge about the usage of the loan program options.
We are committed to ensuring that students leave this institution with the lowest amount of debt possible and we will actively work with you to ensure this. Through your life cycle as a student, we will be actively tracking your debt and benchmarking it with others who have studied in the same method and course that you are enrolled in.
By the time you finish university, you may have a number of loans. These loans may be with more than one lender and may have different terms. Repayment can become fairly complicated if you have to make different payments at different times of the month. Consolidation is a way to make repayment of multiple loans less complicated.
You can consolidate all your student loans into one loan with a fixed rate and a single, lower monthly payment. You pay no additional fees to consolidate your loans. More importantly, you may reduce the amount of each monthly payment by extending your repayment term. But remember that a longer repayment term increases the amount of interest you pay over the term of your loan.
Consolidation loans offer terms ranging from 10 to 30 years. Repayment options on consolidation loans include: Standard, Graduated and Income Sensitive repayment plans. To be eligible for a consolidation loan, you must be in a grace period, repayment, deferment, or forbearance. For detailed information on loan consolidation visit Direct Loan Consolidation.
One major advantage of borrowing through the Federal Loan Program is having the option to postpone repayment for a period of time under certain conditions. However, it is important to note how interest must be paid or not paid on various loans:
Some Common Deferment Options (for borrowers whose first loan was disbursed on or after July 1, 1993)
|Type of deferment||Deferment period||Loans eligible|
|In-university at least half time (PDF 61.9KB)||No time limit (however you must still be progressing towards a degree)||Federal Subsidised Stafford, Unsubsidised Stafford, SLS, PLUS, Perkins, and Consolidation loans|
|Temporary total disability deferment request (PDF 68.8KB)||Federal Subsidised Stafford, Unsubsidised Stafford, PLUS, Consolidation loans|
|Parental leave/Working mother deferment request (PDF 70KB)||Federal Subsidised Stafford, Unsubsidised Stafford, PLUS, Consolidation loans|
|Public service deferment (PDF 71.7KB)||Federal Subsidised Stafford, Unsubsidised Stafford,SLS, PLUS, Perkins, and Consolidation loans|
|Unemployment (PDF 61.8KB)||3-year limit (granted for 6 months at a time to a maximum of 36 months)||Federal Subsidised Stafford, Unsubsidised Stafford, SLS, PLUS, Perkins, and Consolidation loans|
|Economic hardship (PDF 64.5KB) (earning less than minimum wage, poverty level wage, or other specified criteria)||3-year limit (granted for no more than one year at a time)||Federal Subsidised Stafford, Unsubsidised Stafford, SLS, PLUS, Perkins, and Consolidation loans|
|Military (PDF 94.4KB)||Federal Subsidised Stafford, Unsubsidised Stafford, SLS, PLUS, Perkins, and Consolidation loans|
You may need to complete and submit separate deferment forms for different types of loans. You should continue making loan payments until you have been notified that the deferment is granted. Keep copies of all forms and correspondence related to your deferment.
If you find yourself in temporary financial difficulty and no deferment option applies to you, you can request forbearance from your lender or servicer. Forbearance is granted at the lender's discretion and allows you to have months added to the term of your loan, temporarily reduce the amount of your monthly payment or temporarily suspend monthly payments.
There are several forbearance options available. The two most common types of forbearance are:
- Economic Hardship Forbearance: If your student loan payments exceed 20% of your total monthly income you can apply for this type of forbearance. It is given in 12-month increments for a maximum of three years.
- Administrative Forbearance: May be granted by your lender if you are delinquent on payments prior to entering a period of deferment.
Note that interest continues to accrue on your loan during forbearance. That interest must be repaid, which can result in higher monthly payments once the forbearance has ended. The federal government does not pay the interest on Subsidised Stafford loans while your loans are in forbearance.
For more information on forbearance, please visit Loans Deferment and Forbearance.
Delinquency and default
Based on the recent Cohort Default Rate information released by the US Department of Education, the Cohort Default Rate for La Trobe University at the end of year 2011 was 9%.
When your monthly payment is 30 days or more overdue you are considered to be delinquent on your loan. Most lenders and servicers will contact you directly about delinquent payments and begin collection activity. Your delinquency may be reported to a credit bureau which could damage your credit rating.
If you expect to have a problem making a monthly payment, contact your lender immediately. It is always easier to discuss alternatives before the due date rather than after a payment is late.
If you fall 270 days behind on a scheduled payment you are legally in default on your loan agreement. The lender can assume that you are not going to repay; and the lender may declare the entire amount you owe, including interest, as immediately due and payable.
Defaults are reported to credit bureaus and stay on your credit record, whether or not you eventually pay off the loan. The consequences of default are severe.
For more information on delinquency and default, borrowers' options and timelines, as well as default management, please visit ASA's webpages on default and default management, or information on who to contact regarding loan default.