MD Program

Contact Financial Services

1216 MERF
Iowa City, Iowa 52242-2600
Phone:(319) 335-8059
Fax: (319) 335-8643

  • Borrower Rights and Responsibilities

    Borrower's Rights:

    You have the right to know:

    1. The lender (holder) cannot change the terms of your loan without your consent.
    2. The interest rate for your loan(s) is specified in the promissory note(s).
    3. The lender must return the promissory note to you when the loan is paid in full.
    4. The lender will provide you with a repayment schedule before the repayment period begins.
    5. If the loan is sold from one lender to another lender, or if the loan is serviced by a party other than the lender, the lender must notify you within 30 days of the transaction and you must be sent a notification which spells out your obligations to the new lender service.
    6. You may have a right to a “grace period” before repayment begins after you have completed school attendance, internship and residency in an accredited program, or a fellowship training program or full-time educational activity approved by the U.S. Secretary of Education for this purpose.
    7. If you qualify, you may apply for a deferment of your loan payments.
    8. You have a right to repay the whole or any portion of the loan at any time without penalty.
    9. Your loan obligation may be canceled in the event of your death or permanent and total disability in accordance with applicable Federal statutes and regulations.
    10. “Forbearance” — if you are willing but financially unable to make the required payments on your loans, you may request the lender to grant forbearance. Forbearance is the temporary cessation of payments, allowing an extension of time for making payments, or accepting smaller payments than were previously scheduled. The lender may grant forbearance of principal, interest, or both. Forbearance requires a written agreement between borrower and lender. Unlike periods of deferment, when forbearance is granted the borrower is responsible for repayment of accrued interest charges. Lenders do not have to grant forbearance except in the case of medical residents still in their training period.
    11. You may be eligible to have your loans combined by a lender when you enter repayment.

    Borrower's Responsibilities:

    You are expected to:

    • Understand that you can only use the proceeds of your loans for tuition, fees, and other reasonable education and living expenses.
    • Repay your loan(s) including all accrued interest and deducted fees.
    • Understand that the lender may charge an insurance premium and you will most likely not be entitled to any refund of this premium.
    • Notify your lender, in writing, within 10 days, if you:
      • change your name
      • change your address
      • change your telephone number
      • fail to begin any activity eligible for deferment
      • withdraw from school, either permanently or for a short-term leave of absence
      • transfer to another school
      • enroll for less than half-time
      • change your graduation date
      • cease to participate in an activity eligible for deferment  
    • Notify the lender of any occurrence that may affect your eligibility to receive a deferment of principal and interest payments.
    • Understand that to receive a deferment, including a deferral of the onset of the repayment period, you must, prior to the onset of the activity and annually thereafter, submit to the lender of the note evidence of your status in the deferment activity and evidence that verifies deferment eligibility of the activity. It is your responsibility to provide the lender with all required information or other information regarding the requested deferment.
    • Repay your loans according to the repayment schedule provided by the lender at the time you leave school. You must contact your lender regarding repayment no later than 90 days before any grace period ends.
    • Properly direct all future correspondence to the new holder of your loan once you are notified in writing that your loan has been transferred to a new holder or servicer.
    • Know that the standard repayment length is 10 years, although you have the option of entering an extended repayment schedule of up to 30 years, depending on your loan principal indebtedness.
    • Understand that if you fail to repay your student loan, you will be considered in default and the following may result:
      • It may be reported to a consumer credit bureau and have a negative effect on your credit rating.
      • You may be ineligible to receive any additional federal or state financial aid funds.
      • Your federal and state income tax refunds may be withheld.
      • Your wages may be garnished.
      • Your Medicare reimbursements may be reduced.
      • Written-off debt may be reported to IRS as taxable income.