Debts & Loans

You’ll receive more detailed information about College Loans options at exit counseling and from the College Loans Servicing Center, so you can select the plan that’s right for you. You’ll be told what your monthly repayment amounts would be under each plan. Once you’ve selected a plan, the Servicing Center will send you a repayment schedule for all your College Loans, listing the plan you selected, your monthly payment amount, and the date your payments will be due. (If you don’t choose a plan, you’ll be placed in the Standard Repayment Plan.)

You can always change your plan later, if you choose. Parents with a Direct PLUS Loan will receive a repayment schedule after the final disbursement of the loan. Options for Postponing Repayment If you ever have a problem making your monthly College Loans payments, you may be able to postpone repayment through deferment or forbearance.

Each has separate conditions and requirements. If you have a deferment, you may postpone making payments on your College Loans under certain specific conditions. If you have Direct Loans only, you may defer repayment if you are enrolled at least half time in a program of study that meets the U.S.

Department of Education’s requirements for program eligibility (you may not defer repayment while in a medical internship or residency program, except a residency program in dentistry). Enrolled in a graduate fellowship program approved by the U.S. Department of Education. Enrolled in a rehabilitation training program for persons with College Loans that the U.S. Department of Education has approved.

You also may be eligible for deferment for a period of up to three years if you are seeking, but unable to find, full-time employment. Experiencing, or will experience, economic hardship (talk to the Servicing Center for more information on this deferment)

You may be eligible for additional deferments if, at the time you obtain a College Loans, you have an outstanding balance on an FFEL. You can find out about these extra deferments from your financial aid office.

During deferment of Direct Subsidized Loans, you don’t have to pay any principal, and interest isn’t charged. For Direct Unsubsidized Loans and College Loans, payments on the principal may be deferred, but interest is charged. You may choose to pay this interest or have it capitalized (added to your principal balance) at the end of the deferment period.

If you have a Direct Consolidation Loan, payment of principal may be deferred. Interest may, however, accumulate during deferment, depending on what loans you’ve consolidated. Check with the financial aid office or the Direct Loan Servicing Center to find out whether interest will accumulate on your College Loans.

If you meet one of the deferment conditions, and you want to postpone repayment of your loan, contact the Servicing Center and ask for the appropriate deferment form for College Loans. You’ll have to provide documentation to prove you meet the requirements for the deferment you’re seeking. The deferment form will explain what information you must provide. Be sure to make loan payments while you’re waiting for your deferment to be approved; if you don’t, your loan may become delinquent or even go into default.

Forbearance If you can’t make payments on your College Loans for reasons such as unexpected personal problems or poor health, and you don’t qualify for a deferment, you may request forbearance of loan payments.

During forbearance, you can temporarily stop making payments, or you can make smaller payments than originally scheduled. You may request forbearance of principal, interest, or both. Even if you receive a forbearance for the interest, it will continue to accumulate during the forbearance period and will be capitalized (added to your loan principal) when the forbearance ends.

You may also receive forbearance if you meet one of the following conditions: You serve in a medical or dental internship or residency. You serve in a position under the National and Community Service Trust Act of 1993. (This deferment applies to Direct Stafford College Loans borrowers only.) You are obligated to make payments on your federal student loans that are equal to, or greater than, 20 percent of your total monthly gross income. Contact the Servicing Center to request forbearance. In most cases, you’ll be asked to provide documentation showing you qualify. As with deferments, continue to make payments on your loan while you’re waiting for forbearance approval.