Loan Repayment
Federal Student Loan Repayment
Loan Servicers
When a student borrows their first federal student loan through the Department of Education, they are assigned a loan servicer after their first borrowed loan pays out (or disburses) to their student account. Currently, under the William D. Ford Federal Direct Loan Program, there are ten (10) different loan servicers:
- Cornerstone
- FedLoan Servicing (PHEAA)
- Granite State - GSMR
- Great Lakes Educational Loan Services, Inc.
- HESC/Edfinancial
- MOHELA
- Navient
- Nelnet
- OSLA Servicing
- ECSI
If you do not know who your loan servicer is, you can login to your account on studentaid.gov using your FSA ID or call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
Types of Repayment Plans
For borrowers who are entering repayment with loans borrowed within the Direct Loan Program and the Federal Family Education Loan (FFEL) Program, there are eight (8) different repayment plans each with different criteria to best suit the needs and eligibility of the borrower:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Pay As You Earn Repayment Plan (PAYE)
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR)
- Income-Sensitive Repayment Plan
Each plan has different repayment terms, and individual research should be done at studentaid.gov on their Repayment Plans page to see which plan would be best for the individual borrower. More information about repayment plans is given during Exit Counseling which is required of all federal loan borrowers entering their grace period.
Starting Repayment
Borrowers who are entering their grace period/repayment means that they have graduated, dropped below half-time enrollment, or withdrawn from the institution they were/are attending. Once a student enters their six-month grace period, they will need to prepare for and learn what will be expected of them once they are required to make their first student loan payment. Upon the expiration of this grace, students who have not been processed and approved for enrollment in any of the other repayment plans will be automatically enrolled in the Standard Repayment Plan--which can be changed if necessary.
Please note that PLUS loan borrowers do not have this grace period available to them and will immediately enter repayment once the student is no longer enrolled at least half-time.
Grace Period
Upon entering repayment for the first time, the Direct Loan borrower is granted a six-month grace period prior to making their first payment towards their student loans. This time period is a one-time courtesy to ensure the borrower will have a steady income and/or be able to save in order to make their payments once contacted to do so. Though they are not required to, the borrower can still make a payment during their grace period. Making those payments will help keep interest from accruing where it would have done so otherwise.
It is important to note that not all federal loans have a six-month grace period. For example, Federal Perkins Loans have a nine-month period while PLUS loans have no grace period at all. In other circumstances, a student who has previously utilized their full grace period will not be granted another if they were to return to school and be enrolled at least half-time.
More information on repayment and grace period can be found at studentaid.gov
Payments
Making a payment on your student loan varies depending on the loan you are paying toward. More information about payment can be found at studentaid.gov.
| Type of Loan | Where to Send Payments | When to Send Payments |
|---|---|---|
| Direct Loans and FFEL loans owned by ED | Your loan servicer | Contact your loan servicer |
| FFEL loans not owned by ED | The bank, credit union, or other lending institution that made the loan (the lender). | Contact your loan servicer |
| Federal Perkins Loans | Your school or the billing agency designated by your school. | Contact your school |
Tips On Getting Ahead of Your Loans
- If you receive a refund from your student account for borrowing more than you needed to cover your balance, pay some back towards the loan if you do not need the full refund
- Decreases the principal (the totel amount borrowed before interest) amount borrowed which will also decrease the amount you pay back in interest
- Making quarterly interest payments while in school
- Keeping interest from accruing on your Direct Unsubsidized loans
- Complete Exit Counseling in preparation for repayment
- Satisfies federal requirement as stated in the Loan Agreement signed by the borrower prior to disbursement of the loan(s)
- Provides all the information you need to properly prepare for repayment of your loans (i.e. repayment plans, deferment and forbearance information)
- Making payments during your grace period
- Keeping interest from accruing on your Direct Loans
- Paying a little more than the minimum payment each month
- Pay off your interest and principal debt faster
- Setting up auto-pay with your servicer
- Makes the borrower eligible for a 0.25% interest rate deduction
Benefit:
Benefit:
Benefits:
Benefit:
Benefit:
Benefit:
Student Loan Forgiveness, Discharge, and Cancellation
While the borrower is required to pay off the loans they have borrowed, there are some circumstances where loans can be cancelled, discharged, or forgiven. More information, forms, and criteria can be found On the Student Loan Forgiveness page on studentaid.gov.
Cancellation: You are no longer required to make payments on your loans due to some circumstances approved by the Department of Education
Discharge: You are no longer required to make payments on your loans due to permanent circumstances like disability or school closure
Forgiveness: You are no longer required to make payments on your loans since you have met a specific set of eligibility criteria documented by the relevant forgiveness program