A federal financial aid loan is money that you borrow from the government to help pay for your education. Like loans from other sources, you need to pay this money back, with interest.
Things you should know about federal student loans:
- The interest rate on federal student loans is almost always lower than that on private loans—and much lower than that on a credit card.
- You don't need a credit check or a cosigner to get most federal student loans.
- If you work in certain jobs, you may be eligible to have a portion of your federal student loans forgiven if you meet certain conditions.
- When you take a federal student loan you are agreeing to pay back the amount you borrow (loan principal) and any accumulated interest.
- The first payment will be due six months after you graduate, change your enrollment to less than half-time, or withdraw from school.
- If you have trouble repaying your federal student loan, for reasons such as low income, loss of job, etc. you may be eligible for a period of deferment or forbearance, during which no principal payments are due. In certain cases, the interest will accrue and capitalize, in others the interest will be paid by the Federal Government. To provide you additional support, Capella University has partnered with Student Connections to help you understand your loan repayment commitments and address any issues you may encounter. This service is offered to you at no cost. Visit https://studentconnections.com/borrowers/repaymyloans/ or connect with a borrower advocate for free at (866) 311-9450.
- If you fail to make payments on your Federal student loan for nine months (twelve months if your lender is Direct Loans), you will be considered in default. If you default, you will be turned over to a collection agency and reported to a credit bureau, potentially impairing your ability to apply for credit and preventing you from obtaining future student aid. In addition, the entire loan balance will become due immediately and any future income tax refund may be withheld to satisfy the debt to the government.
- If you receive federal loans money will be disbursed to Capella in the third week of your term, and any remaining funds will be refunded to you within 7 calendar days after the disbursement.
- There are different annual and lifetime borrowing limits for each type of federal loan. Keep these limits in mind, especially if borrowing is a large percentage of your school financing.
- Whatever the source of the loan, you should only borrow what you need to cover your costs.
Contact an enrollment counselor by email or by phone at 866.808.8681 for more information about loans