Student loans are a common and convenient source of funding used by more than half of the students at Illinois to help pay for their education. Many students do need to borrow and consider this a wise investment in their future.
You’re encouraged to review the following information prior to accepting any student loans so that you understand the responsibilities associated with borrowing and repaying an educational loan as well as the negative long-term financial consequences of not repaying your loan.
- Borrow only what you need and can reasonably repay.
- Develop a realistic budget and consider ways to lower your costs.
- Research the average pay of your chosen field to know if your projected earnings will be enough to repay your student loans.
- Keep track of your loan debt (principal and any accrued interest) so you will know the amount you will have to repay when you graduate.
- Stay in contact with your loan servicer and be sure they have your updated contact information.
- Know that repaying your student loan on time can help establish and maintain an excellent credit history. If you ever have trouble making your payments, work with your loan servicer regarding your repayment options and be sure to take advantage of deferment and forbearance options that can prevent your loan from going into default status.
Understand the Responsibility of Borrowing
- Be aware that student loans are in your name and affect your credit history, so you should know and understand the obligations. Don't rely on your parents or others to review this information for you.
- Complete entrance loan counseling and understand all aspects of the loan and the borrowing process. Contact our office if you have questions.
- Read and understand the terms and conditions on your promissory note.
- Understand that you’re obligated to repay your loan regardless of whether you complete your education, are satisfied with your education, or are unable to find a job.
Recognize the Consequences of Not Repaying Your Student Loans
- Unlike other forms of consumer debt, student loans cannot be discharged through bankruptcy except under extraordinary circumstances.
- If you fail to make a payment on your student loan for an extended period, your loans may be placed into default.
- A default on a federal student loan will require payment of additional costs, including collection costs, attorney's fees, court costs, and additional interest. These costs may substantially increase the amount owed on your student loan.
- No statutes of limitation apply to the collection of student loan debt. This means that your student loan debt may be collected many years, or decades, into the future.
- The IRS may seize your tax refunds to repay a defaulted student loan.
- Your future wages may be garnished to repay a defaulted student loan.
- Your Social Security benefits may be garnished to repay a defaulted student loan.
- Any disability benefits you receive may be garnished to repay a defaulted student loan.
- A default on a student loan may result in the denial or revocation of a professional license, such as a license to practice medicine or law.