You are still responsible for payments until school starts

I don’t know if this person misunderstood his counselor or just received really bad advice.  I got an email from a borrower who stated that his school told him that because he was going back to school on August 22nd he wouldn’t have to make his payment and he was checking to see if this was true.

The problem?  His first payment was due August 15.

Where the school went wrong was in two areas.  First off you are responsible for your payments until your status is updated.  So this borrower was required to either make the payment or stop the payment with a forbearance or deferment.

The second thing to remember is typically this does not happen overnight.  Most schools update automatically through the National Student Clearinghouse or the National Student Loan Database System.  This can take up to a month to happen.  So his status probably would not be updated until the end of August meaning he would have two payments be due.

These two payments would make him significantly delinquent and even run the risk of negative credit reporting.  That would have been some costly advice to follow!