 Congratulations. I know you've heard this at least a thousand times before, but it really is true. You're about to embark one of the best and most exciting times of your life by starting here at the School of Your Choice. You'll go further in life in every way you want to. And when you think about it, it's hard not to get excited about all the possibilities. But before you can begin, there are some important things you need to know and understand about the financial aid package that's making school answer many terrific things possible for you. And even though it seems as if the day will never come, you have the responsibility to pay back the money you're borrowing. Ready to learn more? Let's take a look at your financial aid package. It probably looks something like this one. To start, your award package may consist of one of two types of direct loans awarded by the U.S. Department of Education. The first is subsidized. There's no interest charged to you while you're still in school. The second type is unsubsidized loans. Unlike subsidized loans, interest is charged while you're still in school and will be added to your total loan balance. But it's important to remember that no matter what type of loan you're awarded for your education, the money you are getting to pay for school is a loan and you must begin to pay it back in full after a six-month grace period to reduce damage to your credit rating. If your financial aid package contains any unsubsidized loans, you can choose to pay the interest on your unsubsidized loans while you're in school or you can decide to wait until you graduate. So should you pay your interest on your unsubsidized loans now or wait until you graduate? It's something to think about. If you wait until you're finished with school, the interest for all the years you spent studying will be added to your loan balance. That's money you're responsible for paying once you're out of school. On the other hand, money can be tight in college, and we know that. We also know that whether or not to pay your interest now or later is an important decision worth talking about with your family and your financial aid counselor. Ordinarily, your interest on unsubsidized loans is added on to your loan amount for you to repay later. But here's something to think about. If you borrowed the maximum amount in unsubsidized loans for four years of school and you paid the interest on your loans while you're in school or during a six-month grace period after you graduate, you'd save a nice chunk of change over $1,000 to be specific. So if you can get the money together to pay your interest while you're in school, it makes a lot of sense to do so. And we've made it easy. At any time if you'd like to start paying your interest, you'll find the information on how to pay it in the regular statements you'll get from the Direct Loan Servicing Center. So, school's about more than getting an education. It's about making new friends, having new experiences, and taking responsibility for your own decisions. As an adult, you're about to sign an important document. It's called a Master Promissory Note. And sorry for the legal language here, but it's very important for you to understand that the Master Promissory Note is a legally binding contract between you and the U.S. Department of Education. Once you've signed it, your Master Promissory Note can be used to take out loans for up to ten years, and otherwise you're going to school for at least half time. Your contract with the Department of Education lays out everything you need to understand about the money you are borrowing, the interest you'll be charged, and when you're expected to begin repaying your loan. So please, be sure you understand the Master Promissory Note and the borrower's rights and responsibilities that comes with it. You'll also find other important information included, too. For instance, in your borrower's rights and responsibilities, you'll find out more about the Teacher Loan Forgiveness Program that could allow you to cut your total loan debt by as much as $17,500 if you teach for at least five years in an elementary or secondary school serving a low-income community. For more details on this program, a way to do good for others while helping yourself at the same time, contact the Direct Loan Servicing Center. The Teacher Loan Forgiveness Program is just one of the features of your loan covered in the Master Promissory Note and the borrower's rights and responsibilities. So please, read them carefully, and before you sign your Master Promissory Note, ask any questions you want, any questions at all, until you are totally clear on the contract you're signing. Because remember, it doesn't hurt to say it again. The money you're getting for college is a loan and you will be responsible for paying it back. So it's important to borrow only as much money as you'll need. Well, okay, I know that sounds obvious. Nobody wants to borrow and pay interest on loans they don't really need, but a bigger question is, how do you know how much money you should have on hand? To put together a budget, you really need to figure out three things. How much you expect your income will be? This should include your loan amount for the year, quarter, or semester, as well as any additional income from a job, or your family, or any other sources at all. How much you'll need to meet all your expenses? This is, obviously, the money you'll need to cover tuition, books, housing, and extra expenses. If your expenses are greater than your income, you'll need to either cut your expenses or make up the difference with a job, or a bigger loan. If your total income is greater than your expenses, you should think seriously about reducing your loan amount. When you're ready to prepare your own budget, here's a great place to start. This is the Interance Counseling Guide for Direct Loan Borrowers, put together for you by the Department of Education. It's a simple, easy-to-understand booklet designed to give you the facts and information you need about your loans, along with many other useful tools and facts. You'll find inside some simple guidelines that will make it easier to put together your own budget, something we really hope you'll take the time to do. Because, once again, it's important that you borrow only as much money as you need to stay in school. We understand that it seems like a long time in the future, but keeping your loan amount to only the money you really need will make it much easier on you down the line when you're paying it back. So when you receive your award letter giving you the details on your loans, you'll find there because, depending on your school's policy, you may be required to formally accept or decline your loan package. If the loans you've been awarded are more than you need to stay in school, talk to your financial aid counselor about how to reduce your loan amount. So, you borrowed only the money you need. You've retired and had some fun along the way to finish school and earned your degree. Here's what you need to know now about repayment. Have a full six months from the day you graduate, stop attending school, or drop below half-time enrollment before you must begin making payments. We'll let you know when your grace period is coming to an end. In most cases, you'll make fixed monthly payments for 10 years until your loan is paid back in full. But, you may have the option to pay your loan back over 25 years, making your payments lower but your total interest higher. The Direct Loan Servicing Center is the place to go for all the information on your options. If you're ready for a reality check and wondering just how much you can expect your payments might be in the future, the Entrance Counseling Guide for Direct Loan Barrowers has more information that can help you ballpark now what you'll need to pay later. Your financial aid counselor will also be able to help. But, what if you find yourself in a situation in which you're temporarily unable to pay anything on your loan at all? The first and most important thing to do is to contact the Direct Loan Servicing Center. You may be eligible for a deferment or forbearance that would allow you to temporarily postpone your payments. But the most important thing is not to allow your loan to go into default. If you don't make payments or arrangements for a deferment or forbearance, your loan will go into default and all the money you owe, including any interest or collection fees, will come due immediately. So please, get in touch with us if you find yourself in financial trouble. There's a good chance we'll be able to work with you until you get back on your feet. I know we've given you a lot of information today. We also know it's hard to make certain you remember everything you need to just from watching a short video. So if you haven't received your copy of the Entrance Guide for Direct Loan Barrowers, be sure to ask for it from your financial aid counselor. And don't forget the Direct Loan Servicing Center website is a great source for all kinds of information and tools that will help you make smart decisions about your loans. And there's one more thing. If you transfer schools or change addresses, please let us know on our website. It's important that we always have a current address so we know how to get in touch with you. So thanks for paying attention. No matter what you wish for the future, everyone at the U.S. Department of Education hopes it happens for you. One thing we do know for certain is by starting here at the school of your choice, you'll go further in life, maybe even further than you've ever dreamed. So thanks again. Oh, and good luck.