• Loan Repayment


     Do I have to start paying right after I graduate?

    Borrower Grace Periods
    After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment. This "grace period" will be:

    Six months for a Federal Stafford Loan (Direct Loan Program or Federal Family Education Loan (FFELP) Program).

    Nine months for Federal Perkins Loans.

    PLUS Borrowers—The repayment period for all PLUS Loans begins on the date the loan is fully disbursed, and the first payment is due within 60 days of the final disbursement. Parent PLUS Loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment.

    Make Your Payments on Time
    Your loan servicer will provide information about repayment and will notify you of the date loan repayment begins. It is very important that you make your full loan payment on time either monthly (which is usually when you'll pay) or according to your repayment schedule. If you don't, you could end up in default, which has serious consequences. Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans.



    I am Having Trouble Making my Payments, What do I do?  

    If you're having trouble making payments on your loans, contact your loan servicer as soon as possible. Your servicer will work with you to determine the best option for you. 

    Options include:

    • Requesting a deferment—If you meet certain requirements, a deferment allows you to temporarily stop making payments on your loan.
    • Requesting a forbearance—If you don't meet the eligibility requirements for a deferment but are temporarily unable to make your loan payments, then (in limited circumstances) a forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments.

    If you stop making payments and don't get a deferment or forbearance, your loan could go into default, which has serious consequences. 

    Paying interest on your loan while you are in school
    If you choose not to pay the interest on your Direct Unsubsidized or PLUS Loan while you’re in school, the government will add it to the unpaid principal amount of your loan when you enter repayment. This is called “capitalization.” Capitalization increases the unpaid principal balance of your loan, and the government will then charge interest on the increased principal amount. Check your interest statements, and use the online calculators at www.dl.ed.gov to find out how much you’ll pay over the life of the loan if the in-school interest is added to your loan balance. If you want to pay the interest that accrues on your Direct Unsubsidized Loan or your PLUS Loan while you’re in school, contact the Direct Loan Servicing Center at 1-800-848-0979.




    How much time will I have to repay my loan, and how much will I have to pay each month?

    Generally, you’ll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Your monthly payment amount will be based on the amount you borrowed and the repayment plan you select. 

    Direct Loan student borrowers may choose one of several repayment plans:

    • Standard Repayment Plan—You make fixed monthly payments for up to 10 years.
    • Graduated Repayment Plan—Your payments start off lower at first and then gradually increase, usually every 2 years. The loan must be repaid within 10 years.
    • Extended Fixed or Extended Graduated Repayment Plan—You make fixed or graduated monthly payments over a period of time not to exceed 25 years. Extended repayment plans are available only to new Direct Loan borrowers on or after Oct. 7, 1998, who currently have an outstanding Direct Loan balance of more than $30,000.
    • Income Contingent Repayment Plan—Your monthly payment is adjusted each year based on your annual income (and your spouse’s income, if you’re married), your family size, and the total amount of your Direct Loans. After 25 years, any unpaid loan amount will be forgiven. This plan is currently available only to Direct Subsidized or Unsubsidized Loan borrowers. Beginning July 1, 2009, this plan also will be available to student Direct PLUS Loan borrowers.

    Note that beginning July 1, 2009, a new Income-based Repayment Plan will become available to student Direct Loan borrowers (parent Direct PLUS Loan borrowers may not repay their Direct PLUS Loan under this plan). Your payment under this plan will be based on your income during any period when you have a partial financial hardship. Your monthly payment amount may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you meet certain requirements over a specified period of time, you may qualify for cancellation of any outstanding balance on your loans. You can change plans at any time. There’s no penalty if you make payments before they are due or pay more than the amount due each month. You can find more information about these plans by contacting the Department’s Direct Loan Servicing Center Online at: www.dl.ed.gov.




    Can I get help repaying my loan?

    Public Service Employment—If you are employed in certain public service jobs and have made 120 payments on your Direct Loans (after Oct. 1, 2007), the remaining balance that you owe may be forgiven. Only payments made under certain repayment plans may be counted toward the required 120 payments. You must not be in default on the loans that are forgiven.

    Armed Forces—As part of their recruitment programs, the Armed Forces may repay your education loan if you enlist in the military. For more information, contact your local military service recruitment office.




    Can my loan ever be canceled or discharged?  

    You must repay your loan even if you don’t complete or can’t find a job related to your program of study, or if you are unhappy with the education you paid for with your loan. However, the government will cancel your loan if you have your loan discharged in bankruptcy or if you become totally and permanently disabled and meet certain additional requirements. The government may discharge some or all of your loan if:

    • The school closed before you completed your program.
    • The school forged your signature on your promissory note or falsely certified that you were eligible to get the loan.
    • A loan in your name was falsely certified through identity theft.
    • You withdrew from school but the school didn’t return the portion of your aid award that it was required to return under our regulations. (See the written notice on return of aid that your school provides to its students.)






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