A wealth of information about loan repayment, including details about when repayment begins, what happens if a student goes into repayment but then returns to school, what the latest interest rates are, and more, is at StudentAid.gov/repay. Make sure all of your students are aware of that URL so they can take control of their loan repayment. And take a look at the tips and resources we've provided on this page for your use.
If you're working with a student who isn't sure where to send payments for his or her loan, you should recommend "My Federal Student Aid" at StudentAid.gov/login. My Federal Student Aid provides information about which loan servicer is handling a borrower's loan.
Talking point: The borrower should keep in touch with his or her loan servicer regarding any questions, problems, change of address, return to school, or anything that could affect repayment of the loan.
There are several federal student loan repayment plans available to borrowers. We suggest that each borrower review the options and decide which plan is right for him or her.
- Some repayment plans offer student loan repayment based on income.
- Borrowers must make regular monthly payments even if they don't receive a monthly billing statement.
- A borrower may change repayment plans at any time.
Help your students weigh the benefits and drawbacks of getting a Direct Consolidation Loan.
- Loan consolidation can simplify repayment because only one monthly payment must be made; but when you consolidate, you might lose some benefits that were attached to the underlying loans.
- Borrowers cannot refinance a Direct Consolidation Loan to get a lower interest rate.
Loan Forgiveness, Cancellation, and Discharge
In some instances, a federal student loan can be forgiven, canceled, or discharged. Examples of these circumstances include the borrower's work in public service or his or her total and permanent disability. Encourage borrowers to investigate their options carefully and continue to make payments on their loans until the forgiveness, cancellation, or discharge has gone through.
Talking point: It is extremely rare for a federal student loan to be discharged in bankruptcy.
Options for Borrowers Having Trouble Making Payments
If a borrower finds his or her payments too high, he or she should contact the loan servicer to discuss options, which may include the following:
- changing the payment due date,
- switching repayment plans to get a lower monthly payment,
- getting a deferment or forbearance, or
- consolidating the loans.
Talking point: Default is not inevitable.
Getting Out of Default
Unfortunately, too many borrowers wait until they're in default and find that their tax refund has been taken as payment before seeking help. If you're working with someone who's in default, reassure them that there are ways to resolve loan default, including repayment, rehabilitation, or consolidation. The important thing is for them to contact the loan servicer as quickly as possible.
Sometimes a borrower might get discouraged because he or she doesn't agree with the amount the loan servicer says is outstanding or feels that a determination of default is wrong. Find out how to resolve disputes about federal student loans, including getting help from the Federal Student Aid Ombudsman Group.