What are Federal student loans?
Federal student loans are certified by a school or institution which the borrower is attending and used toward covering education-related expenses. They are:
- Direct and FFEL Loans (Stafford, William D. Ford, Parent PLUS, Grad PLUS and consolidation)
- Perkins Loans
- Health Professions Student Loans (HPSL)
- Loans for Disadvantaged Students (LDS)
Other types of loan programs, such as state-based (ex. B-On-Time Loan and CAL) and alternative or private loan programs may require the borrower to be responsible for different or additional terms other than mentioned here. Regardless of the loan program, it is always recommended that you contact your lender or servicer for details and information specific to your loan(s).
What are my responsibilities?
A borrower’s rights and responsibilities are outlined on each promissory note of commitment. Although repayment may be obvious, a borrower’s responsibilities also include, but are not limited to:
- borrower initiated contact with lender(s);
- repayment, regardless of any notice or information received from lender; and
- complete an exit interview.
Any and all changes to a borrower’s information and status (ex. change in address, employment or any difficulties encountered in repayment) should be immediately forwarded to your lender. You may request a copy of your student loan rights and responsibilities from your lender.
How much do I owe?
Your total loan debt is the sum of all outstanding loan principal and interest plus any additional service fees charged by your lender or servicer. These additional fees, if applicable, are particular to an individual borrower's account. The National Student Data System (NSLDS) records your Federal student loan history (disbursement amounts, dates and lenders). This data should be checked, as you would all credit history, for updates and errors. This site is also useful for lender contact information. Your lender will remain the best source of up-to-date repayment and loan status information.
Since some student loans accrue interest while in school, during grace periods and while in deferment or forbearance and repayment, the total debt to be repaid may increase with time. Early or prepayment of all or part of a student loan may be made without any penalty to the borrower. Contact your lender if you have questions or need assistance.
Who do I pay?
Although many borrowers remain with the same lender throughout their academic experience, it is not uncommon to have multiple lenders. Also, lenders may sell, without a borrower’s consent, student loans to another holder or may utilize a servicer.
NSLDS is the primary online student resource for lender and loan information. Borrowers should be notified by each lender of all repayment information. It is among the borrower’s responsibilities to update all contact information with each lender.
When do I begin repayment?
Generally, repayment is required immediately following a six month grace period associated with the loan(s). Some loan programs, such as the Perkins Loan, have extended grace periods, while others may be reduced, as in the case of a consolidation loan. Refer to the loan promissory note or contact your lender for more details.
The grace period normally begins once a student drops below half-time enrollment. This includes graduating or withdrawal from the institution. Contact your lender or servicer for details.
Student loans may be repaid, partially or in full, in advance of any repayment schedule with no penalties to the borrower.
Why do I need to repay?
Failure to repay student loans in an established and timely manner can seriously affect your credit and financial status. Late, or delinquent, payments may add late fees and affect future borrowing eligibility and options. Negative credit history may also be reported to all three major credit bureaus. Not making payments over a longer period of time, or defaulting, means you have broken your repayment commitment and payment in full may be requested from a lender. Defaulting on a student loan may result in the following.
- Negative credit history
- Wage garnishment
- Collection fees
- Suspension of a professional license
- Withholding of tax refunds and other state and federal monies
- Civil lawsuits
Keep in touch with your lender or servicer. They are your primary source of assistance and options if you experience problems with repayment.
How much do I pay?
Many factors influence the monthly payment amount, total payout and length of repayment of any given student loan.
These factors include, but are not limited to:
- Amount borrowed
- Interest rate
- Type of repayment plan
Monthly payments can be estimated using the Federal Student Aid Repayment Estimator. Estimates can be made based on your actual loan information or by entering loan amounts manually.
Several different options exist for repayment plans to suit a variety of financial situations. For details on repayment plans available, please visit StudentAid.gov.
Deferment and Forbearance are options for temporarily postpone or reduce federal student loan payments during financial hardship or when returning to school. Contact your loan servicer to apply.
Forgiveness, Cancellation, and Discharge of your loan means that you are no longer expected to repay your loan. Certain circumstances might lead to your loans being forgiven, canceled, or discharged. Contact your loan servicer to find out if you qualify.
A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Contact your loan servicer to apply.