A Guide to Repaying Your Federal Student Loans

Repayment Overview

A Guide to Repaying Your Federal Student Loans

A Guide to Repaying Your Federal Student Loans

One important responsibility you'll face as you leave school is the obligation to repay your federal student loans. This booklet provides you with an overview of student loan repayment, including:

Available repayment plans Other options for managing repayment, including

deferment, forbearance, and consolidation Circumstances under which you may be eligible

to have your loan forgiven or discharged Consequences of delinquency and default Tips to help you achieve repayment success

Throughout this guide, we'll recommend that you contact your loan holder in certain circumstances. Your loan holder may be the lender you borrowed from or a loan servicer. You can find out who your loan holder is by logging onto the National Student Loan Data System (NSLDS) at using your FSA ID and password (the credentials you use to complete your FAFSA online). NSLDS gives you current information about what you owe, including outstanding balances, loan status, disbursements, and loan holders, including contact information.

It's especially important to keep in touch with your loan holder if you:

Leave school Change schools Change graduation dates Graduate Change your enrollment status to less than half time Change your name, address, or phone number Have trouble making your loan payment

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Repayment plans

Standard Repayment Plan You`re automatically placed on this plan unless

you request a different plan Lowest interest costs over the life of the loan Same monthly payment throughout your

repayment period Minimum monthly payment is $50 Ten-year repayment term

If you have difficulty repaying your federal student loans under the standard repayment plan, you may be able to choose one of the alternative repayment plans described below.

Graduated Repayment Plan Monthly payments are smaller at the beginning of

the repayment period and gradually increase over the repayment period Total amount paid in interest under this repayment plan will be greater than the total interest you would pay under a standard repayment plan Ten-year repayment term

Extended Repayment Plan Lengthens the repayment term up to 25 years Must owe more than $30,000 to qualify Payments can be either fixed (same amount each month)

or graduated (increasing over time) Total amount paid in interest under this repayment plan

will be greater than the total interest you would pay under a standard repayment plan

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Income-Driven Repayment Plans Under an income-driven plan, your monthly payments are based on your income, family size, and federal student loan debt. The repayment term may be longer than 10 years, and you must reapply annually. The total amount of interest you'll pay under these plans will be greater than the total interest paid under a standard repayment plan, but any outstanding principal and interest still owed after 20 or 25 years (depending on the plan) of qualifying payments will be forgiven. Under current rules, the forgiven amount is considered taxable income for federal income tax purposes. Income-Contingent Repayment (ICR) Plan Income-Based Repayment (IBR) Plan Pay As You Earn Repayment Plan (PAYE Plan) Revised Pay As You Earn Repayment Plan (REPAYE Plan) Please use the U.S. Department of Education's Repayment Estimator to compare your repayment options: mobile/repayment/repaymentEstimator.action

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