Loan Repayment / Debt Management
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Your loan servicer, the organization that handles billing you for your loan, will provide you with information about repayment and your repayment start date. Our National Student Loan Data System can tell you who your loan servicer* is, and you can visit the servicer's website or call them to find out how to make payments. 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.
*A loan servicer is a company that handles the billing and other services on your federal student loan. The loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.
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 Loans (Direct Loan ProgramSM or Federal Family Education Loan (FFELSM) Program).
Nine months for Federal Perkins Loans.
PLUS Borrowers—The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, a graduate student PLUS Loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower during the deferment.
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.
You have a choice of several repayment plans that are designed to meet the different needs of individual borrowers. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose.
- The Standard Repayment Plan has higher payments, but will allow you to pay off your loans in ten years.
- The Graduated Repayment Plan can be the right choice if your income is low now, but you expect it to increase steadily over time.
- If you need to make lower monthly payments over a longer period of time than the two other plans previously mentioned, the Extended Repayment Plan may be a good option.
- Income Driven Repayment Plans are referenced below.
Income-Driven Repayment Plans
Income-Driven Repayment plans (IDR) such as Income-Based Repayment (IBR), Pay As Your Earn (PAYE), and Revised Pay as You Earn (REPAYE) are repayment plans for the major types of federal student loans that caps your required monthly payment at a percentage of your income. For many borrowers, these plans can help make monthly payments more manageable. If your income is very low, payments can be as little as $0. This is important especially during periods of residency or other periods where income may be diminished such as working part-time.
All Stafford, PLUS and Consolidation Loans made under either the Direct Loan or FFEL
Program are eligible for repayment under IDR, EXCEPT loans that are currently in default,
parent PLUS Loans (PLUS Loans that were made to parent borrowers), or Consolidation
Loans that repaid parent PLUS Loans. The loans can be new or old, and for any type
of education (undergraduate, graduate, professional, job training). For additional
information and how to apply please visit Income Driven Repayment at the Federal Student Aid website. Try this repayment calculator.
Additional information on Income-Driven Repayment can be found here.
Public Service Loan Forgiveness (PSLF)
In 2007, Congress created the PSLF to encourage individuals to enter and continue to work full-time in public service
jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance
due on their eligible federal student loans after they have made 120 payments on those
loans under certain repayment plans while employed full time by certain public service
employers. Only loans you received under the William D. Ford Federal Direct Loan (Direct Loan)
Program are eligible for PSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Perkins
Loan Program, or any other student loan program are not eligible for PSLF.
If you have FFEL and/or Perkins loans, you may consolidate them into a Direct Consolidation Loan to take advantage of PSLF. However, only payments you make on the new Direct Consolidation Loan will count toward the 120-month payment requirement for PSLF. Payments made on your FFEL or Perkins loans, even if they were made under a qualifying repayment plan, do not count as qualifying PSLF payments. For additional information and how to apply please visit this helpful blog and the federal student aid PSLF website.
If you are a teacher, see also Teacher Loan Forgiveness.
AACOM Training Module
Please view this online training module sponsored by AACOM. This module will help you in deciding how much to borrow and which repayment plan works best for you. AACOM CSFAA Module for Osteopathic Medical Students
We suggest the following module completion timeline:
Module 1 and 2 - View when you have applied for acceptance to TUC and before you accept your financial aid awards for the first year.
Modules 3, 4, and 5 - View during your 4th year to help prepare you for loan repayment and offer helpful and money saving strategies.
Loan Repayment Webinars from Doctors Without Quarters, LLC
Perkins Loan Repayment
Perkins Loans are not available for new borrowers. For Perkins Loan Repayment contact the Perkins Loan Coordinator, Natalia Plotkina in New York at (212) 463-0400 Ext 5566 or by email email@example.com.
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