Repayment, Consolidation, Deferment, and Forbearance
Federal Loan Repayment Options
Repayment of the principal loan balance begins six months after graduation, withdrawal, or less than half-time enrollment. Students may be allowed up to 30 years for repayment in certain circumstances however, repayment is usually based upon a ten-year plan.
The Direct Loan Program offers loan repayment plans designed to meet the needs of almost every borrower. Direct Loans are funded by the federal government through your school and are managed by the Direct Loan Servicing Center, under the supervision of the U.S Department of Education. The Federal Direct Loan Program allows you to choose your repayment plan and to switch your plan if your needs change.
You will receive more information about repayment choices before you leave school and, later from the loan servicer of your loan. You can also get more details about repayment plans and use the customized Repayment Estimator at StudentAid.gov. If you don't choose a repayment plan when you first begin repayment, you'll be placed under the Standard Repayment Plan. You can also change plans to suit your financial circumstances. To view examples of Federal Direct Loan repayment schedules, review the following document from Navient: Federal Direct Student Loan Interest Rates [pdf].
To find out more about repayment options before receiving a Federal Direct Loan, borrowers may contact Student Financial Services at St. John Fisher College or the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). If you currently have a Federal Direct Loan and would like the exact payment amount on your loan, you can contact the loan servicer. To determine who your loan servicer is, visit the National Student Loan Data System (NSLDS).
Repayment Option Descriptions
Learn more about each of the repayment options available for federal loans.
With the standard plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay your loans.
Your monthly payment under the standard plan may be higher than it would be under the other plans because your loans will be repaid in the shortest time. For the same reason - the 10-year limit on repayment - you may pay the least interest.
With this plan your payments start out low and generally increase every two years. Monthly payments are made for up to 10 years. Your monthly payments will never be less than the amount of interest that accrues between your payments and won't be more than three times greater than any other payment. If you expect your income to increase steadily over time, this plan may be right for you.
To be eligible for the extended plan, you must have more than $30,000 in Federal Direct Loan debt. The extended repayment plan has a fixed annual or graduated repayment amount to be paid over a period not to exceed 25 years. Fixed payments are the same amount each month you are in repayment, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan above.
This is a good plan if you will need to make smaller monthly payments. However, you may pay more in interest because you're taking longer to repay the loans. Remember that the longer your loans are in repayment, the more interest you will pay.
This repayment option is available to borrowers whose student loan debt is high relative to their income. Students must have a partial financial hardship. Under this plan, the required monthly payment amount will be based on your income and family size. The payment amount may be adjusted annually, based on changes to your annual income and family size.
Payments are made over a period of 25 years and never exceed more than the 10-year standard repayment amount. If you repay under this plan and meet certain other requirements, any remaining balance will be forgiven after 25 years of qualifying repayment.
Visit StudentAid.gov for more information on Direct Loan Income Based Repayment Plan.
Direct Parent PLUS Loans and Direct Parent PLUS Consolidation Loans are not eligible for the IBR repayment plan.
This repayment option is generally 10% of your discretionary income. Your payment is always based on your income and family size, regardless of any changes in your income.
Payments are made over a period of 20 years if all loans you're repaying were received for undergraduate study. Payments are made over a period of 25 years if any loans you're repaying under the plan were received for graduate or professional study. Any remaining balance will be forgiven if your federal student loans aren't fully repaid at the end of the repayment period.
Visit StudentAid.gov for more information on the REPAYE Plan.
Direct Parent PLUS Loans and Direct Parent PLUS Consolidation Loans are not eligible for the REPAYE plan.
This repayment option is available to Direct Loan borrowers whose student loan debt is high relative to their income. You must also be a new borrower as of October 1, 2007 and must have received a disbursement of a Direct Loan on or after October 1, 2011. Students must have a partial financial hardship.
Under this plan, the required monthly payment amount will be based on your income and family size. The payment amount may be adjusted annually, based on changes to your annual income and family size. Payments are made over a period of 20 years and never exceed more than the 10-year standard repayment amount. If you repay under this plan and meet certain other requirements, any remaining balance will be forgiven after 20 years of qualifying repayment.
Visit StudentAid.gov for more information on Pay As You Earn Repayment Plan.
FFEL Program Loans, Direct Parent PLUS Loans, and Direct Parent PLUS Consolidation Loans are not eligible for the Pay As You Earn repayment plan.
This plan is available to low-income borrowers who have a Direct Subsidized Loan, Direct Unsubsidized Loan, Direct Graduate PLUS Loan and/or a Direct Consolidation Loan (except Direct PLUS Consolidation Loans). This plan allows students who do not qualify for the Income Based Repayment (IBR) or the Pay As You Earn plans to make lower Direct Loan payments.
Monthly payments are made for a maximum of 25 years and are based on your adjusted gross income (and that of your spouse, if married), your family size, and the total amount of your Federal Direct Loans. Monthly payments are the lesser of the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that changes with your annual income or 20% of your monthly discretionary income. Any loan amount that remains after 25 years of payments will be discharged (forgiven).
Visit StudentAid.gov for more information on Direct Loan Income Contingent Repayment Plan.
Direct Loan Parent PLUS Loan borrowers are not eligible for the ICR repayment plan.
Federal Loan Consolidation
Student and parent borrowers can consolidate (combine) multiple federal student loans with various repayment schedules into one loan. The result is a single monthly payment instead of multiple monthly payments. With a consolidation loan your monthly payment may be lower, the repayment term may be extended, and you will receive a fixed interest rate. Compare the cost of repaying your unconsolidated loans with the cost of repaying a consolidated loan.
Federal loans can be consolidated during the grace period, during repayment, and during periods of deferment or forbearance. The interest rate of federal consolidation loans is a fixed rate for the life of the loan and is based on the weighted average of the interest rates on all of the loans you consolidate, rounded up to the nearest one-eighth of 1 percent.
Visit the StudentAid.gov website for more information on federal loan consolidation.
Loan deferment is a period of time during which repayment of the principal balance of your loan is temporarily delayed. During a deferment, you do not need to make payments. Depending on the type of loan you have, the federal government may pay the interest on your loan during a period of deferment. To qualify for a deferment, you must meet specific eligibility requirements. The most common loan deferment conditions are enrollment in school at least half-time, inability to find full-time employment (for up to three years), economic hardship (for up to three years), and during a period of active military duty. Visit the StudentAid.gov website for information on loan deferments, or contact your loan servicer.
If you can't meet your scheduled loan payments and you are not eligible for a deferment, your loan servicer may be able to grant you a forbearance for a limited and specific period of time. Forbearance occurs when your loan servicer agrees to either temporarily reduce or postpone your student loan payments. Interest continues to accrue (accumulate) and you must pay the interest that accrues during any period of forbearance. With forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. Documentation may need to be provided to the loan servicer to show why you should be granted forbearance. Contact your loan servicer to apply for forbearance.
Loan Cancellation and Forgiveness
In circumstances such as certain kinds of teaching service, total and permanent disability, or the closure of the school you were studying, your loan can be canceled or forgiven. Please visit the StudentAid.gov website for additional information on forgiveness, cancellation, and discharge of loans.
New York state provides up to 24 months of federal student loan debt relief to NYS residents through the Get on Your Feet Loan Forgiveness Program.