<p>I know, weird question.... </p>
<p>Ok, say you take out like 15,000 dollars for one school year in loans.
If a person was to end up only staying one semester then leaving college, would they have to pay back the full 15,000 or just cancel the loan?</p>
<p>If the money has been disbursed to you, you have to pay it back.</p>
<p>Normally a loan is disbursed in equal instalments over the school year. Half in one semester, half the next. If you only do one semester, I would expect only half the loan to have been disbursed.</p>
<p>However much has been disbursed, you will have to start repaying that.</p>
<p>Alyalex, this is a very good question. I have been asked this by numerous students.</p>
<p>Any money that was paid out to you must be repaid. If you borrow $15,000 but only half was paid out to you before you left, you would owe $7500. If all $15,000 was paid out to you, you would owe $15,000. The point is, leaving school early does not result in your debt being canceled. In the case of Stafford loans, repayment begins 6 months after you leave school. If you drop your classes during the term, the 6 months begins on the date of withdrawal. For private loans, repayment begins based on the lender’s terms.</p>
<p>Do some students actually think the loan is cancelled if they don’t finish school?</p>
<p>Yes, they do. I know, I know … but it’s true.</p>
<p>I know your debt is not cancelled if you do not finish school… I was just asking because I’ve heard for some loans, it’s paid at different periods. Such as beginning of semesters.</p>
<p>@kelsmom: Thank you. You answered my question. I was mostly wondering what happens when the lender doesn’t pay you out all the money at once. However, I did not mean to make my question sound like I thought a person would be debt free if they did not finish school, I know it does not work like that.</p>
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<p>I have heard some third hand or possibly fourth/fifth hand stories about some of the for -profit institutions where the Admissions Counselors (read commissioned sales persons) hinting that if the student tries the college and then drops out there is no penalty.</p>
<p>I am not sure that they directly tell you that loan is cancelled, but I will not be surprised if they gloss over the loan repayment and make it appear that loan repayment is not an issue. Again, this may not be the case in most situations, but we have a friend who used to work for one of these for-profit institutions and she was mentioning she had heard stories to that effect.</p>
<p>Several articles on similar themes</p>
<p>[Melanie</a> Sloan: For-Profit Education: Will We Ever Learn?](<a href=“HuffPost - Breaking News, U.S. and World News | HuffPost”>For-Profit Education: Will We Ever Learn? | HuffPost Latest News)</p>
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<p>Oh my!</p>
<p>And it’s really sad that some kids don’t realize that the debt still exists if you drop out. That’s one of the saddest parts about borrowing…if they don’t get their degree then it’s harder for them to earn the money to make their payments.</p>
<p>And even if they do graduate, what are the odds of finding a job in an economy like this when you graduated from a disreputable school? Sure, they might look past that and at your own qualities, but most firms have their pick. They might decide not to even bother with a graduate of ‘Scam U’. There’s nothing that kills a resume faster than having words like “fraud” anywhere near your accomplishments.</p>