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Repayment Information

Most students must begin to repay their federal student loans six months after graduating or dropping below half-time enrollment (six or fewer credits per semester). By developing a smart repayment strategy early on, and considering options like student loan consolidation, you can take proactive steps that make loan repayment simpler and easier to manage.

Utilizing your resources is a key component in successful loan repayment:

Exit Loan Counseling

Federal Direct Student Loans

Recipients of the Federal Direct Subsidized or Unsubsidized Loan must complete online exit counseling at studentaid.gov.

Federal Perkins Loan

Recipients of the Federal Perkins Loan program are required to complete exit counseling with the Perkins Loan office.

Student Educational Loan Fund (SELF)

Recipients of the SELF Loan typically pay interest while in school, but repayment changes upon graduation. To ensure that you understand your obligations, contact the loan servicer, Firstmark Services.

Loan Consolidation Options

Consolidation allows you to combine multiple student loans into one loan with a single monthly payment. Learn more about your loan consolidating options.

Learn more about Federal Loan Consolidation

Many loan consolidation companies offer the option to consolidate your federal student loans and your private loans together. This is NOT recommended. By consolidating your federal loans with your private loans, you will lose all the benefits on your federal loans forever.

A private consolidation loan is simply replacing one or more private education loans with another. The main benefits of consolidation:

  • Make one monthly payment to one lender.
  • Get a better interest rate.
  • Reduce the monthly payment.

If the monthly payment is reduced, be sure to check the loan repayment term. If it is for a longer term than the original loans, this will increase the cost over the life of the loan. Ask yourself if this is worth it. Weigh the pros and cons carefully.

Timing is important when considering consolidation. Since the interest rate on private student loans are based on your credit score, there’s potential to get a lower interest rate if your credit score has improved significantly since you first obtained the loan. For example, if you’ve graduated and now have a good job and have been building a positive credit history.

Education lenders will consolidate private loans, so the interest rates are dictated by the lender, not the government. If you’re happy with your lender, consider talking with them to see if they’ll reduce the interest rate on your loans rather than lose your loans to another lender. If you’re considering a new lender, do thorough research on the consolidation or refinance loan program.

Questions to consider:

  1. Does loan program offer variable and fixed rate options?
  2. Are there additional fees, such as origination or repayment fee?
  3. If a cosigner is required, is there an option to release the cosigner early?
  4. Is there a prepayment penalty if the loan is paid off sooner than the loan term?
  5. If payments are difficult for the borrower to make, does the lender allow postponement of payments or a graduated repayment schedule?
  6. What is the loan repayment term, and does it fit into your budget plans?
  7. If a borrower returns to school, is the repayment of the consolidation loan eligible to be deferred.
  8. Check out the lender’s website and call their customer service center. Make sure they meet your level of service expectations.

Consolidation isn’t always the answer. The timing may not off, or the interest rate too high. Weigh the options carefully and use reliable resources to gather the details before making a final decision.

Loan Repayment Tips

  1. Know Your Loans

    It is important to keep track of the loans that you borrowed. Know the lender/servicer, balance, and repayment status of each of your student loans. Login to studentaid.gov to utilize the dashboard. If you are unable to locate the lender for any private education loan, find a recent billing statement and/or original paperwork that you signed. Contact the school you borrowed the loan for if you can’t locate any records. (You can contact the Financial Aid Office here.)

  2. Know Your Grace Period

    A grace period is how long you have after graduation before payment is due on your student loan. Subsidized, unsubsidized and PLUS Direct loans may be eligible for a 6-month grace period while Perkins loans may be eligible for 9 months. For a private education loan, check your loan paperwork or contact the lender/servicer. Don’t miss your first payment!

  3. Stay in Touch with Your Lender/Servicer

    If you move, change your telephone number, email address or name, let your lender/servicer know. We encourage you to set up an online account. It is a quick way to reference your account status and contact the lender/servicer. Open and read every communication you receive about your student loans. If you are receiving unwanted phone calls, talk to them and get to the bottom of it. Ignoring these messages can lead to default, which has long-term consequences.

  4. Watch for Scams

    Exercise caution when dealing with third-party student loan debt relief companies. The services these companies provide are offered to borrowers free of charge through the U.S. Department of Education or your current federal loan servicer. At no cost, you may be able to:

    • Lower your monthly payments
    • Change your repayment plan
    • Consolidate multiple federal student loans
    • Postpone monthly payments for additional education, hardship or unemployment
    • Get your loans out of default

  5. Pick the Right Repayment Option

    There are many options when selecting a repayment plan for your federal loans. Do your research, figure out a budget and select a plan that is right for you. If you have questions, contact your lender/servicer. Your federal loan payments will be set up on a 10-year standard repayment plan automatically, but you can change this if needed. Extending your repayment plan will cost more over the long term, but can lower the monthly payment. Some important options for federal loan borrowers are income-driven repayment plans that cap the monthly payment based on your income. Private education loans may not be as flexible, but contact the lender/servicer to discuss alternative options.

  6. Don’t Panic

    If you are having trouble repaying your loan(s), remember that you have options. There are other repayment plans available that may lower your monthly payment or even postpone payments temporarily depending upon your situation. Contact your lender/servicer with your questions or concerns.

  7. Stay Out of Trouble

    Delinquency and default can ruin your credit. For federal loans, default kicks in after nine months of non-payment. When you default, your total loan balance becomes due, your credit score is ruined, and the total amount you owe increases dramatically. The government can garnish your wages and seize your tax refunds if you default on a federal loan. For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender/servicer right away if you're in danger of default.

  8. Prepay, if You Can

    If you can afford to pay more on your student loan, do it. It will decrease the amount of interest you pay over the life of the loan. Talk to your lender/servicer on how to make this happen.

  9. Payoff the Most Expensive Loan First

    If you are thinking about paying off your student loan debt early, find the loans that have a higher interest rate and take care of those first. If you have private loans, you may want to consider paying those off first as they typically have a higher interest rate or less flexibility for repayment.

  10. To Consolidate or Not to Consolidate

    Consolidation combines multiple loans into one new loan. Do not consolidate your federal loans with your private education loans as you will lose all the benefits and repayment options. Research all options to determine if this is the right step for you. Talk to your loan servicer or the Financial Aid Office if you have questions.

  11. Loan Forgiveness

    There are programs that will forgive all or some of your federal student loan debt depending on your career path.

Based on an article from the Institute for College Access & Success