» Repaying and Managing Student Loans

• Review your federal student loan history
  • You can do this by logging into the National Student Loan Data System (NSLDS) with your Federal Student Aid (FSA) ID.
  • Make a note of loan balance, interest rate, loan type, and servicer for each loan.
• Complete mandatory exit counseling
  • Exit counseling for federal student loans can be completed by logging into StudentLoans.gov with your Federal Student Aid (FSA) ID.
  • Loan exit counseling is required every time a student takes a break in enrollment, drops below half time status, or graduates.
  • This process prepares the student borrower as they transition into repayment of their loans.
• Get familiar with your servicer(s)
  • Your loan servicer will help you manage the repayment of your federal student loans. This means they will be handling the billing and other services on your federal student loan (for example, changing repayment plans or applying for deferment).
  • Consider Loan deferment if you are continuing on to graduate school. Talk to your loan servicer about your options.
  • Create an online account with your servicer.
  • Consider loan consolidation. Loan consolidation can be helpful if you have multiple servicers and can increase your chances of qualifying for an affordable repayment plan and loan forgiveness options but it may not be the best option for you.

• Know when you must begin making payments
  • The grace period is a set period of time after you graduate, leave school, or drop below half time enrollment before you must begin repaying your loan.
    • For loans made under the Direct Loan Program or FFEL Program the grace period may last six months.
    • For Loans made under the Federal Perkins Loan Program the grace period may last nine months. 
  • Chapman Interest Free Loans have different terms and conditions for repayment. For more detailed information on repayment of Chapman Interest Free, please visit the Interest Free Loan and Federal Perkins Loan page.
  • Select a repayment plan for your Federal Student Loans. Here is an overview of Direct Loan and FFEL Program Repayment Plans.
• Consider your income and expenses and create a budget
  • Have an idea of what your earnings will be and create a budget you can realistically afford to pay in student loan payments each month. iGrad: Financial Literacy and Career Resources.
• Know whether you are eligible for loan forgiveness based on your employer or your job.
  • Public Service Loan Forgiveness (PSLF) Program: You may qualify for this loan forgiveness program if you are employed by a government or not-for-profit organization. You must make 120 qualifying payments under an income-driven plan to qualify.
  • Teach Loan Forgiveness Program: You may qualify for this program if you (a) teach full-time for five complete and consecutive academic years in certain elementary and secondary schools or educational service agencies that serve low-income families, and (b) meet other qualifications.

• Make your payments
  • Your loan servicer will provide you with your first payment due date, the number and frequency of payments, and the amount of each payment.
• Reduce your federal income taxes
  • You may be eligible to deduct a portion of the student loan interest you paid on your federal tax return. Student loan interest payments are reported both to the IRS and to you on IRS Form 1098-E. Check with the IRS or a tax advisor to see if you qualify for this deduction.
• Stay out of default
  • Do not miss a payment. If you are making late or partial payments contact your servicer immediately for help. You may be able to change your repayment plan to one based on income or apply for deferment or forbearance.

Interest Rate

A loan expense charged for the use of borrowed money. Interest is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.

Loan Servicer

The Department of Education (ED) is the loan holder for all direct loans. This means they are the organization that holds the promissory note and "owns" your loan. Most loan holders use a loan servicer to assist with managing the repayment of the loans they hold. A loan servicer collects loan payments, responds to your questions about the loan account, and performs other administrative tasks associated with maintaining a federal student loan. Your loan servicer may be the same as your loan holder, or it may be the company that works on behalf of the loan holder.

Deferment

A deferment is a temporary pause to your student loan payments for specific situations such as active duty military service and reenrollment in school. You can receive a deferment on Federal student loans for certain defined periods. The U.S. Department of Education (ED) has published a list of the reasons qualifying for a deferment.

Direct Loan program

The William D. Ford Federal Direct Loan (Direct Loan) Program: Under this program, loans are made by the U.S Department of Education (ED).

FFEL Program

The Federal Family Education Loan (FFEL) Program: Under this program, now discontinued, loans were made by banks or other financial institutions. No new FFEL Program loans have been made since July 1, 2010, but you may have an FFEL if you were attending school before that date.

Federal Perkins Loan Program

Under this program, loans are made by schools.

Default

"To default" means you did not make your payments on your student loan as scheduled according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan.

Forbearance

Forbearance is a temporary postponement or reduction of your student loan payments because you are experiencing financial difficulty. The borrower may alternatively request an extension of time allowed for making payments or the acceptance of smaller payments than were previously scheduled. Unlike deferment, interest continues to accrue during any period of forbearance. The borrower may pay interest as it accrues during periods of forbearance, but the borrower is not required to do so.