Repaying Your Student Loans
Estimated Monthly Repayment Amount*
*Estimated monthly repayment based upon a 10 year repayment period
|Total Amount Borrowed||Loan Interest Rate|
Leaving school: graduating, withdrawing, or dropping below half-time
Once you are no longer enrolled at least half time in an eligible program, you’ll receive a 6-month grace period (see below) on your Federal Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. You must begin repayment at the end of your grace period.
If you have an in-school deferment on a Federal Direct Subsidized or Unsubsidized Loan that entered repayment at an earlier date before you returned to school and you graduate, drop below half-time enrollment, or withdraw from school, you will be required to immediately begin making payments on the loan because the 6-month grace period has already been used up; there is no second grace period.
Make sure that DSU and the Federal Direct Loan Servicing Center know that you are no longer enrolled. If you don’t begin making payments when required, there is the possibility that you will lose repayment incentives you may have received or even go into default.
DSU is required to ensure that you complete Exit Counseling once you graduate or withdraw. You can complete your Federal Direct Exit Loan Counseling here. Until this requirement is completed, a hold will be placed on all student files restricting access to grade transcripts.
When you graduate, drop below half-time, or withdraw from your academic program, you will receive a six-month grace period for your Federal Direct Subsidized and Unsubsidized Loans. Your grace period begins the day after you stop attending school on at least a half-time basis. Once your grace period ends, you must begin repaying your loan(s).
If you re-enroll in school at least half time before the end of your 6-month grace period, you will receive the full 6-month grace period when you stop attending school or drop below half-time enrollment.
There is no grace period for Federal Direct PLUS Loans. The repayment period for each Federal Direct PLUS Loan you receive begins 60 days after your school makes the last disbursement of the loan.
Remember, if you choose to defer payment on a Federal Direct PLUS Loan, any interest that accumulates during the deferment period will be added to the unpaid principal amount of your loan. This is called “capitalization,” and it increases your debt because you’ll have to pay interest on this higher principal balance.
Reservists Called to Active Duty
If you are called or ordered to active duty for more than 30 days from a reserve component of the U.S. Armed Forces, the period of your active duty service and the time necessary for you to re-enroll in school after your active duty ends are not counted as part of your grace period. However, the total period that is excluded from your grace period may not exceed three years. If the call or order to active duty occurs while you are in school and requires you to drop below half-time enrollment, the start of your grace period will be delayed until after the end of the excluded period. If the call or order to active duty occurs during your grace period, you will receive a full 6-month grace period at the end of the excluded period.
If you are a reservist called to active duty with the U.S. Armed Forces for more than 30 days, contact the Federal Direct Loan Servicing Center to let them know your status.
Choosing a repayment plan
You will have the choice of several plans, and the Federal Direct Loan Servicing Center will notify you of the date your first payment is due. If you do not choose a repayment plan, the Department of Education will place you on the Standard Repayment Plan. Most Federal Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period.
If you have multiple federal education loans, you can consolidate them into a single Federal Direct Consolidation Loan. This may simplify repayment if you are currently making separate loan payments to different loan holders, as you’ll only have one monthly payment to make. There may be tradeoffs, however, so you’ll want to learn about the advantages and possible disadvantages of consolidation before you consolidate. To learn more, visit our Federal Direct Consolidation Loan website.
While you’re in repayment
Generally, you’ll have from 10 years to repay your loan. You may request an extended repayment plan which would allow you to have up to 25 years to repay your loan, depending on which repayment plan (there are several) you choose.
The Federal Direct Loan Servicing Center will notify you of the date your first payment is due. If you do not choose a repayment plan, the Department of Education will place you on the Standard Repayment Plan, with fixed monthly payments for up to 10 years. Most Federal Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period.
You can change repayment plans at any time by going to the Federal Direct Loan Servicing Center’s website and logging in to your account.
Automated payments (electronic debit)
When the Department of Education sends your first bill, they will tell you how to you can sign up for their electronic debit account (EDA) option and have your bank automatically make your monthly loan payments for you from your checking or savings account. You won’t have to write checks, use stamps, or worry if your payment will get to them by the due date. In addition, Federal Direct Loans offers a 0.25% reduction in the interest rate on your loans during any period when your payments are made through EDA.
Trouble making payments
If you’re having trouble making payments on your loans, contact the Federal Direct Loan Servicing Center as soon as possible. The Federal Direct Loan Servicing Center staff will work with you to determine the best option for you. Options include:
- Changing repayment plans.
- Deferment, if you meet certain requirements. A deferment allows you to temporarily stop making payments on your loan.
- Forbearance, if you don’t meet the eligibility requirements for a deferment but are temporarily unable to make your loan payments. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Read more about deferments and forbearance here.
If you stop making payments and don’t get a deferment or forbearance, your loan could go into default, which has serious consequences.
Your loan first becomes “delinquent” if your monthly payment is not received by the due date. If you fail to make a payment, the Department of Education will send you a reminder that your payment is late. If your account remains delinquent, the Department of Education sends you warning notices reminding you of your obligation to repay your loans and the consequences of default.
If you are delinquent on your loan payments, contact the Federal Direct Loan Servicing Center immediately to find out how to bring your account current. Late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus), but this is much better than remaining delinquent on your payments and going into default.
Consequences of default
If you default:
- The Department of Education will require you to immediately repay the entire unpaid amount of your loan.
- The Department of Education may sue you, take all or part of your federal and state tax refunds and other federal or state payments, and/or garnish your wages so that your employer is required to send part of your salary to pay off your loan.
- The Department of Education will require you to pay reasonable collection fees and costs, plus court costs and attorney fees.
- You may be denied a professional license.
- You will lose eligibility for other federal student aid and assistance under most federal benefit programs.
- You will lose eligibility for loan deferments.
- The Department of Education will report your default to national consumer reporting agencies (credit bureaus).
For more information and to learn what actions to take if you default on your loans, see the website for the Department’s Default Resolution Group.
Loan cancellation (forgiveness or discharge)
Under certain conditions, you can have all or part of your loan cancelled or discharged. Read more about loan cancellation.
Stay in touch with the Federal Direct Loan Servicing Center. Let them know if you’ve changed your name or permanent address, and make sure that they know when you’ve completed your educational program or transferred to another school.