Tuesday, August 17, 2010

Can a student loan issuing company (private bank) force you to pay off the student loan before you graduate?

Basically...I attended a 4 year university in California a few years ago and during that time I had a family emergency that caused me to stop attending school for awhile. I have since resumed attending school, but one of the former banks is insisting that I pay off the student loan even though I am still attending school. Is that legal? Can I take them to court to stop trying to collect since I'm still a full-time student? Can their actions disqualify me from obtaining any future financial aid. Please help me with your suggestions. (especially if you are familiar with Financial aid rules or have been in a similar situation). Thanks

Can a student loan issuing company (private bank) force you to pay off the student loan before you graduate?
If you are still in school no. It is called a deferment. They can only make you pay if your at in school 6 months later. That is stated in all student loan contracts. Go to your financial aid department and let them know. They should send a letter to the company to let them know you are in school and you want a deferment.
Reply:I think you can get it deferred, but i believe once you get over a certain time period, depending on the lender they can. I think typical is 6 years or so. But if you've been going full time, you should be withing the acceptable time frame for a deferment.
Reply:Look at the contract. It may be possible.











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Good luck !
Reply:You should look at your promissory note and see if it says anything about the grace period in there. I believe it depends on the loan, but if it's illegal, it wouldn't be in the promissory note. If you're still unsure, call the school's financial aid office. They should know.


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