Questions About Loans

What happens if a student doesn't repay a loan(s)?

Failure to repay loan(s) can have serious consequences. Not only will it affect credit, but a student's wages could be garnished, tax returns withheld and eligibility lost to participate in any further federal financial aid programs.

What is the difference between a subsidized and unsubsidized loan?

The federal government pays the interest on a subsidized loan while the student is in school at least half time and during the grace period. The student can either pay the interest on an unsubsidized loan or choose to capitalize the interest payment.

What is the purpose of the entrance and exit interviews?

The entrance and exit interviews are the student's opportunity to learn about his or her rights and responsibilities as Federal Stafford Student Loan borrowers. Entrance Interview Document

How does a student know how much money he or she borrowed?

The lender will provide Disclosure Statements showing details of current loans and reflecting overall indebtedness.

How can a student find out what his or her loan payments will be?

Students may contact his or her lend or the Department of Financial Aid. Either will be happy to help students figure out how much loan payments will be.

Which lender should I use?

Students with any previous student loans should stay with the same lender. Otherwise, Ottawa University has a list of preferred lenders. Students may contact the Department of Financial Aid for assistance.

What is a deferment?

A student who is eligible for a deferment will not have to make loan payments during the deferment period. A deferment form must be completed and approved by the lender before becoming official.

What is the interest rate of my loan(s)?

The interest rate on Federal loans can/will vary based on the type of loan and when the loan is taken. Please contact your lender or the Department of Financial Aid for more clarification regarding the rates on your loan(s).

What is a grace period?

Students are allowed a grace period of six months before entering repayment. The grace period begins once the student leaves school or drops to less than half time status.

If a student defaulted on a previous student loan, can he or she still receive financial aid?

Students may be eligible. They should contact the Department of Financial Aid to further discuss.