Repayment

Repaying Your Student Loan
Financial aid loans eventually must be repaid. There are several different types of repayment plans, and choosing the one that best fits your financial situation is important. Note: after graduating or dropping below half-time enrollment, repayment will usually be deferred for 6 months.

Standard Repayment Plan
This plan has a fixed annual repayment amount paid over fixed period of time not to exceed 10 years.

Graduated Repayment Plan
This plan offers payments that start at a lower amount and increase generally every 2 years. Payments are made over a fixed period not to exceed 10 years.

Extended Repayment Plan
This plan has a fixed annual or graduated repayment amount to be paid over a period not to exceed 25 years. To qualify, students must have more than $30,000 in loan debt.

Income-Sensitive Plan
This monthly payment plan is based on annual income with maximum repayment period of 10 years.

Deferment
Deferment is a period of time when no payments are required; however your interest will continue to accrue on unsubsidized loans. Subsidized loans made on or after July 1, 2012, and before July 1, 2014, are not eligible for an interest subsidy during the 6-month grace period after you graduate, leave school, or drop below half-time enrollment.

To qualify for deferment you must be enrolled in school at least half-time or prove an inability to find full-time employment and/or economic hardship.

Forbearance
Forbearance is a period of time during which payments are temporarily reduced or postponed. During forbearance interest will continue to accrue on both subsidized and unsubsidized loans.

Important: Borrowers must contact their lender to apply for deferment or forbearance.

Default
Default is the worst-case scenario in financial aid loan repayment. Default occurs when an installment payment is missed or the borrower fails to comply with the terms of the promissory note.

Loans will go into default if you become 270 days delinquent (for monthly payments) or 330 days delinquent (on longer term payment plans).

If you default on your student loan, you could be subjected to a host of negative consequences (financial and otherwise). As a result, it’s best to explore all available options to avoid this outcome.

Important: If you are at risk of default, contact your lender immediately to discuss your options.

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