Congratulations! You have completed your education and now you are ready to begin
repaying your student loans. Or are you? Did you need to borrow throughout your
college career? Do you now have both federal student loans and private loans to
repay? Is your current salary sufficient to pay your monthly bills?
Managing debt after college can be challenging. There are a couple of issues you
will need to be aware of as well as some repayment options that may ease your monthly
financial burden. This section is intended to explain the many aspects of repaying
your student loan(s).
What Do I Owe?
National Student Loan Data System
The National Student Loan Data System (NSLDS) is a central database of loans and
grants a student received as part of the Title IV programs (e.g. Stafford and Direct
Loans). If you have borrowed money through the Title IV programs you can view who
holds the loan and how much the loan is for. The organization that holds your loan
should contact you to discuss your repayment options.
Repayment Options
When repaying your federal student loans you have several options when it comes
to repayment plans. One option is called “Standard Repayment”. With this plan you
will pay a fixed monthly amount for a term of up to ten years. With “Extended Repayment”
you can lengthen the term of your repayment up to 25 years. In this case your monthly
costs would be lower, but the total amount repaid is higher. These are just two
of the many types of repayment options you have. Work with your student loan provider
to find the best repayment plan for you.
Loan Consolidation
After four years of college you may have several different loans, one loan from
your freshman year and another loan from your sophomore year and so on. When you
are in repayment you have the option to combine those loans. The interest rate on
consolidated federal education loans is the weighted average of the loans being
consolidated, rounded up to the nearest 1/8th of a percent. This is just another
option that may work best for you when repaying your student loans.
Understand Your Rights & Responsibilities
Borrower Rights
Before you start repaying, you must be provided a repayment schedule and detailed
information about interest rates, additional fees, your balance and your options.
You have a right to defer payments for certain defined periods. And you can request
forbearance, if you qualify.
You may be eligible to repay under a graduated, extended or income-based schedule.
For federal and most private loans, you may prepay in full or in part at any time
without penalty.
You will be notified when your loan is paid in full.
Borrower Responsibilities
You must repay your loans (including interest, insurance, and origination fees if
there are any) on time even if you do not finish your education, get a job, or are
not satisfied with the education you received.
If you request a deferment or forbearance, you must continue to make scheduled payments
until your loan is placed in a deferment or forbearance status.
You must notify your loan holder or service agency immediately of any change to
your name, address, telephone number, employer, or Social Security number.
Manage Your Debt
Deferments and forbearances allow you to temporarily postpone your monthly payments.
These are not automatic. You must apply and be approved. There is either a deferment
or forbearance for practically every financial situation. So, if you find yourself
in a need of financial relief, call your loan servicer to discuss the possibility
of postponing your payments.
Deferments
If you need to postpone your payments, a deferment is the first option you should
request. During periods of deferment on subsidized loans, the principal payment
is postponed and interest for the deferment period is billed to the federal government.
For unsubsidized loans you are still responsible for interest that accrues. Deferment
eligibility is based on the disbursement date of your oldest loan. Your service
provider can advise you on your eligibility status. Several Deferment types are
listed below:
- In-School
- Economic Hardship
- Unemployment
- Internship/Residency
Click the link below to view:
Deferment Forms
Forbearances
If you are unable to qualify for a deferment your next option would be forbearance.
With forbearance, you are responsible for all interest that accrued during the forbearance
period. Forbearance can be placed on your account for up to 12 months at a time
in many cases. Contact your service provider to request forbearance. The forbearance
types are listed below:
- Economic Hardship
- Temporary Hardship
- In-School
- Internship/Residency
- Teacher Loan Forgiveness
Click the link below to view:
Forbearance Forms
Always remember if you have a question about anything on this site, feel free to
drop us a note at outreach@ismloans.org
and we’ll be happy to answer or elaborate on an item that is confusing or unclear.