Loan Repayment

Loan Servicer: the organization that manages your loan and is responsible for billing, collection and management, and deferment/forbearance processing.

Set up your online access to view your loan portfolio, select repayment plan, set up automatic payments, and more.

Period where no payments are required.

• Federal Direct Loans (Subsidized and Unsubsidized) = 6 months
• Federal Perkins Loans = 9 months
• Private Student Loans = typically 6 months but may vary depending on loan program borrowed

Repayment Plans: all federal loan borrowers start on the Standard Repayment option (fixed monthly payment of at least $50 over 10-year period).

However, you can select a different repayment plan via your account with your servicer depending on your needs and income level. The Loan Simulator can provide guidance in selecting a plan that will fit your needs.

Interest begins to accrue when the loan is disbursed (except on Direct Subsidized and Perkins loans until repayment). The Principal is the actual amount borrowed; the Interest Rate is the amount charged by a lender to borrow; and Capitalization is unpaid interest that is added to the principal.

You can calculate the amount of daily interest by using the following calculation: (Current principal x interest rate)/365.25

The amount of interest that accrues on the loan is based on the amount borrowed, the interest rate, subsidies (government pays interest during specific periods of time), and the length of time to repay.

Reduce the total amount of interest paid by making payments when not required (during grace, in-school deferments, etc), setting up automatic payments which may come with an interest rate reduction, and paying more than the minimum monthly payment (there is no pre-payment penalty on student loans).

Consolidation allows borrowers to combine multiple federal loans into one new loan with a single monthly payment and fixed interest rate. Private loans are not eligible to be included in a federal consolidation.

The interest rate is fixed based on a weighted average of the interest rates on the loans included in the consolidation (rate will not exceed 8.25%). Repayment term ranges from 10 to 30 years.

Default occurs when your scheduled loan payments are not made for at least 270 days. Consequences of default include the entire unpaid balance becoming due immediately, no longer eligible for deferment or forbearance, loss of eligibility for additional federal aid, reported to the credit bureaus, tax refund can be withheld, wages may be garnished, additional costs due to late fees, additional interest, court costs, collection fees, etc.

If, at any point, you think you may miss a payment or already have — contact your loan servicer immediately to determine your options to remain in good standing.

Deferment/Forbearance allows you to postpone repayment or reduce your monthly payment for a period of time. Interest accrual may be suspended for the time depending on the specific qualifying situation, however Unsubsidized loans continue to accrue interest at all times.

You must continue making payments on your loans until you have received approval to stop making your payments.

Certain circumstances might lead to your loans being forgiven, canceled, or discharged.

Cancellation/forgiveness is not automatic and you must apply through your loan servicer for the specific program you intend to pursue.

Log in to Federal Student Aid with your FSA ID/password to access your federal loan history, servicer details, loan simulator, and other helpful information to guide you on your federal student loan journey.