Repaying Your Loan
You are required to begin repaying your Federal Stafford loan six months after you graduate, leave school, or drop below half-time attendance. Your parents are required to begin repaying PLUS loans 60 days after the loans are fully disbursed, but may request a deferment. This does not mean you are limited to the payment plan the lender gives you. Federal borrowers have choices, probably more than you realize, including different types of repayment plans, ways to postpone repayment, and the option to consolidate your loans.
Information about all of your outstanding federal education loans is available online from the National Student Loan Data System (NSLDS). You will be able to view all balances due and contact information for the servicer of each federal loan, including FFEL and Direct Loans, Stafford and PLUS loans, and Perkins loans. Before you determine which option is best for you, know what you owe. Note any private (alternative) loans you have borrowed will not appear in NSLDS.
Be aware of your student loans and keep in contact with your lenders as you are in a contract. If you find your student loan payments hard to handle, do not stop making payments. Contact your lenders and let them know your circumstances. In most cases, there is a solution that both you and the lender can work with. Communication is the key.
If you experience economic hardship or other circumstances that limit your ability to repay your loan, you might qualify for a deferment or forbearance: Deferment allows you to postpone repayments for certain approved reasons for as long as you are enrolled at least half-time in a postsecondary school, graduate fellowship or rehabilitation program (if you have disabilities). Deferments of up to three years are also available if you are unemployed. If you don't qualify for a government approved deferment, you can request forbearance from your lender. Forbearance can delay or reduce your monthly payments. Usually, however, you must still pay the interest on your loan during the forbearance period. Please click here for more information.
If you teach elementary or secondary school you may be eligible for special deferment options and, in some cases, cancellation of a portion of your student loan debt. Eligibility requirements are available at the Department of Education. There is also a Public Service Forgiveness to encourage individuals to enter and continue to work full-time in public service jobs.
- For federal Stafford loan deferment or cancellation, contact your lender for application forms.
- For federal Perkins loan deferment or cancellation, contact the school where you borrowed your loan; or the school's Perkins servicing agency. If you borrowed a Perkins loan at Columbia College, forms are available from University Accounting Service.
- It's possible to have your student loan debt discharged (canceled or reduced, but only under certain specific circumstances.
You can investigate consolidating all of your education loans so you have one monthly payment. This program also generally allows you to extend the repayment period beyond 10 years.
Federal Consolidation Loans
- Fixed interest rate based on a weighted average of the current rates on your existing loans.
- Deferment options predetermined by federal regulations.
- Cannot include non-federal (private) loan funds.
Private Consolidation Loans
- Can include both federal and non-federal student loan funds, but not recommended because federal consolidation loans offer superior benefits and lower interest rates.
- Usually a variable interest rate, based on your credit score.
- Forbearances available only at the lender's discretion.
Any consolidation loan is likely to significantly increase the total amount of interest that you will be required to pay. If you are able to meet your current monthly repayment obligations, it may be best for you to avoid consolidation.
You may want to estimate the amount that you can afford to pay, based on your monthly income, using the FinAid Calculator.
There are six repayment plans
Examples of Typical Beginning Payments for Loan Repayment Plans
|Monthly and Total Payments Under Different Repayment Plans
|Total Debt When Borrower Enters
||Income Contingent for Direct Loans or Income –Sensitive Repayment for FFEL Program Repayment (Income $25,000)
Note: Payments are calculated using the maximum interest rate of 8.25% for student borrowers.
Defaulting on Student Loans
If you fail to repay your loan, you will be considered in default. If this occurs, your credit rating will be damaged and you may not be able to borrow in the future to pay for a car or home or even to continue your education. Your wages may be garnished and your federal and state income taxes may be withheld; your loan may be sent to a collection agency and you will be liable for collection fees. Student loan borrowers in default do have options to repay their loans. Information is available from the Department of Education and FinAid.org.
Resolving Loan Repayment Disputes
If you are having a dispute with your servicer or another agency regarding repayment of your federal student loan, you may consider contacting the Federal Student Aid Ombudsman for assistance. You can reach the Ombudsman's office by phone at 877-557-2575 or by mail at this address:
U.S. Department of Education
830 First Street, NE
Washington, DC 20202-5144