How To Repay My Loan
Federal Direct Loans Repayment
Once you graduate school or drop below half-time enrollment, you will enter your grace period and have 6 months before you need to start repaying your loan. You must repay your loan even if you did not graduate or if you are dissatisfied with your academic program at USU. Once you drop below 6 credits, the U.S. Department of Education requires you complete Loan Exit Counseling in order for you to receive more information about repaying your loans.
Repayment is starting in October 2023
The Department of Education recently announced that the student loan payment pause is ending. Interest resumed on September 1, 2023, and loan repayment is set to restart in October, which means it's crucial to be well-informed and prepared. Utah State University is committed to helping students understand their options and providing counseling appointments for current or past students by appointments with our Federal Aid Counselors.
BE AWARE OF SCAMMERS:
You might be contacted by a company saying they will help you get loan discharge, forgiveness, cancellation, or debt relief for a fee. You never have to pay for help with your federal student aid. Make sure you work only with ED and our loan servicers, and never reveal your personal information or account password to anyone.
Official emails to borrowers come from email@example.com, firstname.lastname@example.org, and email@example.com. You can report scam attempts to the Federal Trade Commission by calling 1-877-382-4357 or by visiting reportfraud.ftc.gov.
Exit Counseling Information
To complete Federal Direct Loan Exit Counseling:
- Go to studentloans.gov
- Click on the "Sign In" button
- Log in with your StudentAid.Gov Account
- Click on "Complete Loan Counseling (Entrance, Financial Awareness, Exit)"
- Click on the start button for "Exit Counseling (Required)"
- The site will walk you through the remaining steps
How To Make Payments
Students who have received a federal direct loan are automatically assigned a loan servicer by the U.S. Department of Education. All payments towards your loan go through your assigned loan servicer.
If you are unaware of who your loan servicer is, log into your My Federal Student Aid account with your StudentAid.Gov Account.
When it comes time to start repaying your loan, you can select a repayment plan that's right for your financial situation. Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose.
- Standard, Graduated, and Extended Repayment Plans: These are more structured and have set monthly payments.
- Income-Driven Repayment Plans: Options like the new Saving on a Valuable Education (SAVE), Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR) are available. These are tailored according to your income and family size.
You can compare which plan fits your needs by using the Federal Student Aid Loan Simulator tool.
Federal Perkins Loans Repayment
The Federal Perkins Loan program expired on September 30, 2017. This is for repayment information only.
If you are making payments on federal loans from more than one servicer or from different loan programs, you can combine all your loans into one new one. You will only have one payment to pay and this may allow your payment to spread over a longer period of time. However, the interest rate may be slightly higher than your original loan and stretching out the payments means paying more in interest over the life of the loan.
Difficulty Making Payments
If you are having difficulty making payments on your federal loan:
Your first option is to apply for deferment. Deferment is a period when the payment on your principle is postponed. Interest continues to accrue during periods of deferment, however if you have a subsidized Direct loan, the government will make those interest payments for you. Borrowers of unsubsidized loans must make the interest payments or they will be capitalized (added on to the principle amount you owe). Generally students in school at least half-time are eligible for deferment. There are other conditions such as hardship and public service that merit deferment. Check with your loan servicer to see if you are eligible for deferment.
Your second option is to apply for forbearance. Forbearance is the temporary stopping of payments, the making of smaller payments, or an extension of time for making payments. Interest on your loan continues to accrue during this period. Forbearance is usually granted at the discretion of the loan servicer. Check with them to see if you can go into forbearance.
Delinquency and Default
Delinquency occurs when a student loan payment is missed. After a loan is 90 days delinquent, this non-payment will be reported to credit bureaus affecting your ability to obtain other loans or important forms of credit for things such as a car or a home.
After a student loan has been delinquent for 360 days, it becomes defaulted. Defaulted student loans are sent to a collections agency, where the entire loan amount becomes due. At this point, not only will default harm your credit, but it can lead to tax return withholding, wage garnishment, and more. Deferment and forbearance are no longer an option once a loan is in default.
The Department of Education launched a temporary plan for students who are in default with their loan payments called Fresh Start, which can help students restore eligibility for Direct Loans.
What can I do to avoid delinquency and default?
- Contact your loan servicer
- Contact Student Financial Support and ask to speak with Default Prevention
Unlike other traditional lenders and collection agencies, student loan servicers want you to be out of default and in good standing. They do not want to send you to a potentially harmful collection agency. There are many options available to help students avoid or get out of student loan delinquency and default including various student loan repayment plans, deferment, and forbearance.
Additional information regarding student loan repayment can be found in the Financial Aid Exit Counseling Information or through the Federal Student Aid website
Repayment: Rights & Responsibilities
Federal loan borrower RIGHTS:
- Information about interest rates, the balance you owe on loans, and a loan repayment schedule (before repayment begins)
- Written information on borrower rights and responsibilities, loan obligations, including loan consolidation and refinancing
- A copy of the promissory note and the return of the original note when you pay the loan in full
- Notification if your loan has been sold or transferred to a new holder or servicer
- Prepayment of the loan without penalty
If you qualify, also have the right to:
- Federal interest subsidies (subsidized Direct loans)
- A grace period
- Deferment under certain conditions
- Request forbearance (at the loan servicer's discretion)
Federal loan borrower RESPONSIBILITIES:
- Repay your loan according to the repayment schedule
- Notify your loan servicer:
- Within ten days when you graduate, withdraw from school, drop below half-time, transfer to a different school, or change your name or social security number
- Of anything that affects your ability to repay or your eligibility for deferment or cancellation
- If you fail to enroll for the period of time covered by the loan
- Notify your school and loan servicer of a change in address
- Complete exit loan counseling before leaving school
Private Educational Loans Repayment
Each private lender has their own requirements and most match federal loan servicers. Please visit our Private Loan page, and contact your private loan servicer for more information.
Student Loan Ombudsman
The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans. Contacting the Ombudsman Group is a last resort option. You must make every effort to resolve your loan disputes before contacting them.
Student Loan Ombudsman Group