Student Loans 101

Successful Repayment Guide

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Successful Repayment Guide


The best way to be successful in repaying your student loan is to pay attention to the communication you get from your student loan servicer and of the requirements of repaying your loan.  Stay in close communication with your student loan servicer.  Be sure to sign up for auto-debit or ACH and electronic billing on all your student loans.

Don't ignore your loans if you’re having trouble making payments. There are several options that can help keep your federal student loans in good standing.  Be proactive.   If you are having trouble making payments or know that your financial situation has changed, contact your student loan servicer and ask them about your options.

The first step should always be to look for a repayment plan that allows for monthly payments that fit your budget.  Go to the Federal Repayment Plan link under Helpful Links in the prior section to learn all you can about the repayment plans available for your federal student loan.

If you have looked for at the repayment plans and you still cannot make your payments, you might be eligible to postpone your payments through a deferment or forbearance, described below.  It is important to understand that with deferment or forbearance, depending on the type of loan you have, interest may still continue to accrue, or accumulate, on your loan during the time you are not making payments and then will capitalize at the end of the period. When interest capitalizes, it is added to the principal amount of the loan and you end up paying more.


Federal Student Loans

  • Postponing payments with a deferment when you go back to school, are unemployed, experience financial hardship, or are on active duty military service may be the right option for you. Subsidized loans will not accrue additional interest during deferment periods so your balance after the deferment period will be the same as when it started. However, interest will accrue on all unsubsidized loans during the deferment period. Paying at least the interest each month during a deferment period will prevent your interest from being capitalized or added to the principal of your loan which in essence increases your total principal balance and you end up paying more in the long run.

  • If you are experiencing financial difficulty but don't qualify for a deferment, your loan servicer may be able to grant you a forbearance.
    A forbearance may allow you the ability to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans (including all PLUS loans). If possible, it is advised and smart for you to at least make the monthly interest payments but you are not required to do so.

Forgiveness, Cancellation, and Discharge

You must repay your loans even if you don’t complete your education, can’t find a job related to your program of study, or are unhappy with the education you received. However, there are some circumstances that could result in forgiveness, cancellation, or discharge of your federal student loans. For example, some or all of your loan could be forgiven in exchange for a certain service such as teaching or public service. Your loans could also be discharged based on specific factors such as you becoming totally and permanently disabled or if your school closes while you are enrolled in that school.


Private Loans

Every Private Loan has its own set of repayment terms and conditions. You should stay in constant contact with your lender or servicer and call them immediately if you experience financial difficulties. The consequences of default could result in collection costs, ruining your credit and even legal costs.


Helpful Links:

Continue to review some helpful student loan terms.

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