Repaying your loan
IMPORTANT CHANGE
From 29th April 2021, La Trobe University is no longer eligible in administering the U.S. Department of Education’s Federal Student Aids (William D Ford Direct Loan). Our status has changed to be a Deferment Only institution.
The Deferment Only Institution (In School) status does not allow the certification of new U.S. Federal Student Aids for U.S. students. U.S. students attending such a school with pre-existing U.S. federal student loans may qualify for a temporary suspension of the student loan repayment obligation while attending the La Trobe at least half-time.
If you commence your studies at La Trobe University after 29th April 2021, or an existing student who does not have an active Direct Loan for your current course of study, you will not be able to avail of U.S. Direct Loan funding while studying at La Trobe University.
Our change to a Deferment Only institution does not diminish our commitment to offer US students opportunities to study at La Trobe University. If you wish to apply for funding as a US student, you may be eligible for a Sallie MAE private loan.
Please note the information published below only applies to current La Trobe Students with an existing Direct Loan managed by La Trobe University prior to 29th April 2021.
After you leave La Trobe, you’ll move into the repayment phase of your loan.
When you sign the Master Promissory Note (MPN) during your application for financial aid, you’re entering a legally binding agreement to repay your loan.
At the end of your studies, your debt level will reflect your individual choices and understanding of loan options. We're committed to making sure you leave La Trobe with the lowest amount of debt possible and we'll actively work with you to achieve this. Throughout your time at La Trobe we'll track your debt and benchmark with others who have studied in the same method and course that you are enrolled in.
You’ll need to repay your loan regardless of whether you graduate or leave university before completing your course. Take some time to understand your obligations and options for repaying your loan.
You must complete an exit counselling interview before you leave La Trobe. In this session, you’ll learn about repayment options, deferments and other important information you’ll need during your repayment term.
You’ll be asked to provide:
- the name and address of your closest living relative
- two references (not the same as your closest living relative) with different addresses.
After you finish your course, leave university or reduce your enrolment to less than half-time, your six-month grace period will begin.
During this grace period, you won’t need to make any repayments. If you re-enter university with a load of at least half-time during your grace period, it will be renewed so the full six months is available to you next time you leave university.
After your six-month grace period has passed, you’ll need to begin making monthly principal and interest loan repayments.
Before repayments start, you’ll receive repayment options and a schedule from your loan provider/s. If you don’t receive these, make sure you contact your provider – your repayment obligations will begin whether or not you’re aware of them, and you’ll only receive borrower benefits if you make your first payment on time.
Your minimum monthly payment will vary depending on the amount you borrowed and the repayment plan you chose. Planning ahead is the key to a smooth repayment process.
Your repayment obligations don’t change, even if:
- you don’t complete your course
- you're unable to find employment when you finish your course
- you're not satisfied with your course or other services provided by the University
- your loans are sold to a different lender.
Make sure you understand your options so you can make sound decisions regarding repayments.
For valuable information about repaying and managing your loans, visit:
You may finish university with several loans, each with different providers and terms. Repayment can become complicated if you're making different payments at different times of the month.
Consolidation allows you to group all your student loans into one loan with a fixed rate and a single, lower monthly payment. Consolidating your loans won’t cost you anything, but to be eligible you must be in a period of grace, repayment, deferment, or forbearance.
Consolidation loans offer terms ranging from 10 to 30 years. It’s important to remember that a longer repayment term increases the amount of interest you pay over the life of your loan.
Repayment options on consolidation loans include:
- standard
- graduated
- income sensitive.
View the full list of repayment plan options Learn more about direct loan consolidation
When you borrow through the Federal Student Aid program, you can postpone or defer payments under certain circumstances. You need to complete and submit different deferment forms depending on your situation and your loan type.
You should keep making loan repayments until your deferment has been granted. Make sure you keep copies of all forms and correspondence related to your deferment.
The deferment options currently available are:
- Cancer Treatment Deferment
- Economic Hardship Deferment
- Graduate Fellowship Deferment
- In-School Deferment
- Military Service and Post-Active Duty Student Deferment
- Parent PLUS Borrower Deferment
- Rehabilitation Training Deferment
- Unemployment Deferment.
To find out more about these deferment options and/or apply, please visit the Student Aid website.
If you are facing financial difficulties and you’re not eligible for any deferment options, you can request forbearance from your loan provider. Through forbearance, your loan provider can allow you to:
- add months to the term of your loan
- temporarily reduce the amount of your monthly repayments
- temporarily suspend monthly payments.
Forbearance is granted at your loan provider’s discretion. The two most common types of forbearance are economic hardship forbearance and administrative forbearance.
General Forbearance
Your loan servicer decides whether to grant a request for a general forbearance. For this reason, a general forbearance is sometimes called a ‘discretionary forbearance’.
You can request a general forbearance if you are temporarily unable to make your scheduled monthly loan payments due to:
- financial difficulties
- medical expenses
- change in employment
- other reasons acceptable to your loan servicer.
General forbearances are available for Direct Loans, Federal Family Education (FFEL) Program Loans and Perkins Loans.
For loans made under all three programs, a general forbearance may be granted for no more than 12 months at a time. If you’re still experiencing a hardship when your current forbearance expires, you may request another general forbearance. However, there is a cumulative limit on general forbearances of three years.
Mandatory Forbearance
If you meet the eligibility requirements for a mandatory forbearance, your loan servicer is required to grant the forbearance. Mandatory forbearances apply only to Direct Loans and FFEL Program loans unless otherwise noted.
You may be eligible for a mandatory forbearance under specific circumstances.
Mandatory forbearances may be granted for no more than 12 months at a time. If you continue to meet the eligibility requirements for the forbearance when your current forbearance period expires, you may request another mandatory forbearance
Based on the recent Cohort Default Rate information released by the US Department of Education, the fiscal year 2017 Draft Cohort Default Rate for La Trobe University is 4.1.
When your monthly payment is 30 days or more overdue, you're 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 think you'll have a problem making a monthly payment, contact your lender immediately. It’s 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 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, even if you eventually pay off the loan. The consequences of default are severe.
Find out more about student loan delinquency and default.