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Managing Loan Repayment

Frequently Asked Questions

1. When do I have to start repaying my loans?

Direct Subsidized and Unsubsidized loans have a six month grace period when you leave school or cease to be enrolled for at least 6 credits. When the grace period ends, the loans will enter repayment.

2. Where can I find the total loan amounts borrowed?

You can visit the National Student Loan Data System (NSLDS) to view loan information such as how much was borrowed and loan servicer information.

For more information please visit: https://www.nslds.ed.gov/nslds/nslds_SA/

3. Can my student loans be consolidated?

Yes, consolidation allows a student to combine multiple federal loans into one larger loan. It can simplify your monthly payments by turning several payments into just one. For more information please visit: https://studentaid.ed.gov/sa/repay-loans/consolidation

4. To whom do I make my loan payments?

Once your loans are in repayment, you would make loan payments to your servicer. The loan servicer is a company that the US Department of Education assigns to handle the billing and other services for your federal student loans. They will assist you with your repayment plan choices.

5. What if I can’t pay my loans?

If, at any point, you are having trouble paying your loans, be sure to contact your servicer as they may be able to help with other repayment options.

Two options to consider:

a. Deferment – Students needing to defer their loans can use a deferment which is a period of time where the repayment of principaland interest is temporarily delayed.

b. Forbearance - If students cannot make their scheduled loan payments, but don't qualify for a deferment, the loan servicer may be able to grant a forbearance. With forbearance, students can stop making payments or reduce the monthly payment for up to 12 months. Interest will continue to accrue on all subsidized and unsubsidized loans (including all PLUS loans).

For more information please visit:

https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance

6. What are my repayment options?

Deciding the right repayment plan is the key in determining your financial ability to pay. The following chart details the various loan repayment options:

Overview of Repayment Plans

Repayment Plan

Payments and Time Frame

Pros & Cons

Standard Repayment Plan

 

Payments are a fixed amount and spread over 10 years.

All borrowers are eligible for this plan.

You’ll pay less interest over time than under other plans.

Your monthly payment can be higher than it would be on other plans.

Graduated Repayment Plan

 

Payments are lower at first and then increase, usually every two years. Repayment is up to 10 years (up to 30 years for Consolidation Loans).

All borrowers are eligible for this plan.

You’ll pay more interest over time than under the 10-year Standard Plan.

Extended Repayment Plan

 

Payments may be fixed or graduated and spread over 25 years.

You must have more than $30,000 in outstanding loans.

Your monthly payments will be lower.

You’ll pay more over time than under the 10-year Standard Plan.

Revised Pay As You Earn Repayment Plan (REPAYE)

Your monthly payments will be 10 percent of discretionary income with payments being recalculated each year based on your updated income and family size.

If you're married, both you and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions).

Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 or 25 years.

Any Direct Loan borrower with an eligible loan type may choose this plan.

You may have to pay income tax on any amount that is forgiven.

Good option for those seeking Public Service Loan Forgiveness (PSLF).

Pay As You Earn Repayment Plan (PAYE)

Your maximum monthly payments will be 10 percent of discretionary income with payments being recalculated each year based on your updated income and family size.

If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return.

Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years.

 

You must have a high debt relative to your income.

Your monthly payment will never be more than the 10-year Standard Plan amount.

You’ll pay more over time than under the 10-year Standard Plan.

You may have to pay income tax on any amount that is forgiven.

Good option for those seeking Public Service Loan Forgiveness (PSLF).

Income-Based Repayment Plan (IBR)

 

Your monthly payments will be 10 or 15 percent of discretionary income.

Payments are recalculated each year and are based on your updated income and family size.

If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return.

Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 or 25 years.

You must have a high debt relative to your income.

Your payment will never be more than the 10-year Standard Plan amount.

You’ll pay more over time.

Good option for those seeking Public Service Loan forgiveness (PSLF).

You may have to pay income tax on any amount that is forgiven.

Income-Contingent Repayment Plan (ICR)

Your monthly payment will be the lesser of:

20 percent of discretionary income, or

the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.

Payments are recalculated each year based on your updated income, family size, and the total amount of your Direct Loans.

If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return or you choose to repay your Direct Loans jointly with your spouse.

Any outstanding balance will be forgiven if you haven't repaid your loan in full after 25 years.

Any Direct Loan borrower with an eligible loan type may choose this plan.

Your monthly payment can be more than the 10-year Standard Plan amount.

You may have to pay income tax on the amount that is forgiven.

Good option for those seeking Public Service Loan Forgiveness (PSLF).

 

Income-Sensitive Repayment Plan

Your monthly payment is based on annual income & repayment is up to 15 years.

You’ll pay more over time than under the 10-year Standard Plan.

The formula for determining the monthly payment amount can vary from lender to lender.

Resource, Federal Student Aid website:

https://studentaid.ed.gov/sa/repay-loans/understand/plans

7. Can my loans be forgiven?

Yes, student loans can be forgiven, canceled or discharged given certain situations. You may qualify for loan forgiveness based on your employment, disability, or other special circumstances. For more information please visit: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation.

8. What is the Public Service Loan Forgiveness Program?

If you are employed by a government or not-for-profit organization, you may be able to have a portion of your loan forgiven under the Public Service Loan Forgiveness Program. The program will forgive the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. For more information visit:

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service

9. What is the NYS Get on Your Feet Loan Forgiveness Program?

The NYS Get on Your Feet Loan Forgiveness Program provides up to 24 months of student loan debt relief to recent NYS college graduates who are participating in a federal income-driven repayment plan. Students must be U.S. citizens, NYS residents, current on all student loan payments, earn under a certain income as well as other criteria. For a complete list of eligibility requirements, please visit:

https://www.hesc.ny.gov/repay-your-loans/repayment-options-assistance/loan-forgiveness-cancellation-and-discharge/nys-get-on-your-feet-loan-forgiveness-program.html

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