All about College Student

Big banks that offer private-label college loans are facing new competition from credit unions that are looking to issue their own private student loans.

Credit unions, in increasing numbers, are developing partnerships with private student loan companies like Sallie Mae and Credit Union Student Choice to deliver private student loan products to credit union members. In one such agreement, Southeast Corporate Federal Credit Union, which itself has more than 400 member credit unions, will offer private student loans through Sallie Mae.

Private student loans, non-federal education loans issued by banks and private lenders, are designed to assist students who have exhausted their federal student loan options. Private student loans can be used to cover up to 100 percent of a student’s approved educational expenses.

Credit Unions Offering Flexibility in Student Loan Programs

Some credit union private loan programs are being structured to appeal to families with more than one student in college by enabling parents to make multiple withdrawals on a single line of credit worth as much as $75,000. In addition, credit union–backed student loans are eliminating loan origination fees and offer both in-school student loan repayment and deferred, post-graduation repayment plans.

In-school repayment options enable students to reduce the overall amount of interest their private student loan accrues before they graduate. According to Sallie Mae, students who begin college loan repayments while still in school can reduce their student loan debt by 30 to 50 percent over traditional student loan payment plans, which defer repayment until after a student has graduated or left school.

Investors Looking to Private Student Loans’ Long-Term Growth

The prospects for private student loan companies and student loan securitization are improving marginally. The National Credit Union Administration (NCUA) recently sold a bond worth nearly $1.2 billion that was backed by student loans, after previously relying on commercial and residential mortgages to secure its bond sales.

Credit rating agencies are less sure that private student loan companies represent a good risk; however, many analysts remain optimistic about the long-term investment potential of private student loans.

Fueling investor confidence in the longer-term prospect of the private student loan market is the growing demand for student financial aid as record numbers of students are entering college each year.

Federal Budget Cuts May Pave the Way for More Private Student Loans

Indeed, private student loans may gain market share in a more immediate future than analysts had been predicting.

On Capitol Hill, the U.S. Senate is currently struggling to pass a continuation of its earlier spending authorization to fund the Department of Education’s federal Pell Grant program, which awards government-issued college grants to financially needy and lower-income students. The current authorization expires December 18.

If the Senate fails to reauthorize the funding proposal at its current level, students who are eligible for a Pell Grant may find their Pell Grant award reduced or eliminated. With less Pell Grant aid available to them, many of these students would then need to take out more money in student loans in order to pay for college and complete their degree.

Congress is already considering elimination of the Pell Grant program altogether, as recommended by President Obama’s National Commission on Fiscal Responsibility and Reform.

The bipartisan panel, which recently forwarded its final report to Congress, recommended that the federal government reduce federal education grants based on a student’s pre-college family income in favor of more government-issued student loans, which would need to be paid back, replenishing the government’s coffers, and that would be more attuned to a borrower’s post-graduation earning potential.

However, spending appropriations for an expanded federal student loan program may face stiff opposition in the Republican-led House of Representatives.

As Congress wrestles with the funding needs and long-term future of both federal grant and federal student loan programs, private student loan companies are positioning themselves to fill in any emerging federal financial aid funding gaps.

Not every student arrives at college fresh out of high school. A growing number of students over the age of 25 are returning to the college classroom or enrolling at a college or university for the first time — a trend that means more independent students are seeking financial aid and student loans as a way to pay for college.

This trend also means that some returning students may have already exhausted their available federal student loans. Federal college loans not only carry annual borrowing limits but lifetime maximum borrowing limits. Students returning to college who previously took out federal college loans their first time around may have less federal student loan money available to them.

The Association for Non-Traditional Students in Higher Education reports that students over the age of 25 represent nearly half of all currently enrolled college students. This migration back to the classroom is not merely the product of the current economic downturn, however: According to the U.S. Department of Education, the number of students age 25 or older in college classrooms rose from 28 percent in 1970 to 41 percent in 1998. The number of students age 35 or older at degree-granting institutions increased from 823,000 in 1970 to nearly 3 million in 2001.

Clearly, the current “aging” of the college student population was underway long before the Great Recession took hold.

Finding Financial Aid as a Returning or Older College Student

Determining eligibility for federal financial aid as an older student can be challenging. In some cases, today’s older student may be relatively well-established financially and may hold a number of assets, including real estate, investments, and retirement savings. At the same time, the older student may have additional liabilities, including a mortgage, credit card debt, and student loan debt from a previous run at the college-and-university track. S/He may also be supporting children who are themselves in college.

The FAFSA

For any student, regardless of age or level of educational attainment, the first step in finding financial aid for college need to be the filing of the Free Application for Federal Student Aid (FAFSA). The FAFSA takes into account a student’s broad financial picture — from income, assets, and liabilities to the number of other family members in college — to determine eligibility for federal financial assistance.

Federal financial aid can include need-based grants (Pell Grants) and subsidized student loans (Perkins loans and subsidized Stafford loans), as well as unsubsidized student loans (unsubsidized Stafford loans) that are available regardless of a student’s financial need. For graduate students, credit-based graduate student loans (Grad PLUS loans) are also available.

The Financial Aid Office

If you’re a returning student, a consultation with a financial aid officer at your institution could be very helpful, since rules and regulations regarding student financial aid have changed significantly in the past few years. A financial aid officer may also be able to help you determine your eligibility for federal student loans and how previous student loans may affect your current borrowing limits.

Your financial aid office will also have information about locating grants, scholarships, and work-study opportunities, though many older adults may already be employed full-time. Consider asking your financial aid office about student loan companies that offer non-federal, private student loans, which may be used to pay schooling costs not already covered by your federal student loans or other federal financial aid.

Other Financial Aid Considerations

Returning students may also be eligible for itemized tax deductions related to college expenses. These tax deductions may help take the bite out of returning to school. Consult a tax advisor for help.

Federal financial aid is largely reserved for students who are seeking a degree, although in some cases, non-degree-seeking students may be eligible for federal financial aid if the courses they take are prerequisites for a degree program.

Keep in mind, however, that as a student loan borrower, you’ll be on the hook for any student loan debt you incur, even if you don’t complete a degree as planned. Current U.S. bankruptcy law prohibits bankruptcy courts from discharging either federal or private student loan debts except in the most extreme of circumstances, so if you’re a prospective returning student, make sure to thoroughly research all your academic options and their costs before entering a degree program that will require you to take on significant debt from student loans.

Student loan consolidation is an efficient answer for all those students who are getting difficulties keeping up using the payments of all of their month-to-month student loans.

Paying for the student loans is much more organized, and manageable with student loan consolidation. It also enables you to save some funds, simply because consolidating all of the student loans decrease your interest rate.

The Public Interest Study Group within the US say the typical financial debt amongst student borrowers is presently in extra of $16,500. The Related Press also noted that graduates of public colleges and universities generally emerge owing a lot more than $10,000 for their undergraduate a long time on your own. Those who are in private establishments normally owe $14,000, although the graduate-level students frequently owe more than $24,000. This has become a genuine problem for anybody beginning out in existence having a big debt burden.

As you all know, the repayment of sufficient student loans may be a actual trouble for each students and their mother and father.

Student loan consolidation is really a payment plan that combines all of the loans into a single loan. This way, people who’re paying for several loans would only need to be concerned about generating just one payment to just one loan company.

The large issue is the fact that repaying these debts has grow to be more challenging for graduates inside the midst of uncertain jobs.

There’s no payment fee needed to possess you student loans consolidated. The process of applying to get a student loan consolidation is extremely straightforward.

Lending establishments vary in their specifications and specifications for eligibility. Some of the information that is generally asked for is, private info, list of loans, contact info, and so on.

Those who are considering of applying for a student loan consolidation really should also appear to get a lending institution that provides an arrangement that’s most suited for their wants. Plus, it wouldn’t damage to evaluate interest rates to obtain the very best deal.

Applicants for student loan consolidation would have to carry on paying for their existing loans although they are nonetheless waiting for their programs to obtain processed. Students can even utilize online.

As soon as they have been accepted they would obtain a notification e-mail that relates to all of the needed data that they need, such as: schedules and particulars concerning the payment strategy.

Students can usually seek out out the assistance of a loan councilor to obtain the guidance and evaluation of a loan expert. By doing this, they’d have the ability to discuss and ask inquiries pertaining specifically to their circumstance.

There’s one particular reality in terms of student loans – you can’t hide from them. It might sound intense although, but college loans are totally immune to bankruptcy and these students or graduates that failed to shell out their expenses encounter stiff punishments. The typical penalties are poor credit ratings, garnishment of wages, and IRS penalties.

In addition to, attaining licenses in particular fields is not possible whenever you failed to pay off your student loan debts. There is even a chance that you may possibly be excluded from some authorities contracts should you personal a tiny company. With all these consequences, it is then clear that avoiding a student loan is no way to begin a lifestyle following school.

Inside the end, about fifty percent with the students coming out of school have really acquired their degrees. Of course, it may be difficult to remain and remain in college with financial burdens, and it really is harder to arrive again. But, thanks to student loan consolidation that making 1 less barrier to coming back to school and retaining your credit score rating clean is now feasible.

Within the government consolidation loan applications, it is interesting to understand that you will find really no deadlines connected to them. It is supported through the reality that you can utilize for that student loan anytime throughout the grace period and even around the repayment period. But to consolidate student loans, you will find considerations that you’ve to cope with.

To consolidate student loans, you ought to know that it usually get place during your grace period. At this second, the decrease in-school interest rate will then be applied to estimate the weighted typical fixed rate to consolidate student loans. And as soon as the grace period has ended in your government student loans, the higher in-repayment rate of interest will probably be applied to estimate the weighted typical fixed charge. Provided this kind of process, it is then understandable that your fixed rate of interest for authorities student loan consolidation will likely be higher should you consolidate student loans following your grace period.

Student loan consolidation can be a fantastic payment strategy that helps individuals spend for their academic loans. This really is some thing that ought to be looked into by students who’re getting troubles maintaining up, and paying all of their student loans.

Student loan consolidation just may be the efficient answer for your economic issues.

The best time to start getting information about bad credit student loans and student loan consolidation is your junior year in high school. In order to determine the exact amount of the loan that you would require, you should research thoroughly on the various available schools, and also on the courses in which you are interested. You need to properly plan out your bad credit student loan so as to obtain it easily. A bad credit student loan is particularly helpful when the universities require the students to pay the tuition fees immediately.

Many students are not able to pay for their education, and thus they need student loans. Students with a bad credit can also need bad credit student loans. However, the main disadvantage of bad credit student loans is that a higher rate of interest has to be paid on them. Thus, you must collect a lot of information about the student loans before applying for one.

Students who are looking for a bad credit student loan should pick three schools they are most interested in, talk to the admissions office, and ask what is needed to apply in their school.

A bad credit student loan is payable only after the student has completed his or her education, and has started earning a certain minimum amount. Since April 2005, the minimum amount that the candidate of the bad credit student loan is required to earn has also increased. Bad credit student loans are available as both secured and unsecured loans, depending on whether you are a homeowner or not. The rate of interest to be paid on unsecured bad credit student loans is higher than that on secured bad credit student loans. This is because the secured bad credit student loans are backed by your home as a security.

Why Should I Consider Student Loan Consolidation Now?

Student loan consolidation can have many benefits for the career minded student. Many students don’t have thousands of dollars to pay their way through college.

This is why many college students use student loans to get themselves through college. When it comes time to pay back their student loans, it can be a real burden and a distraction from their career.

You should know how to get the best student loan consolidation rate and plan for your credit situation.

What Is Student Loan Consolidation?

When a student first applied for several student loans from several different agencies and student loan providers, they each gave a different interest rate and term for paying back the loans. The idea of student loan consolidation, is to take all the different student loans and put them into one easy convenient loan. You then only have to make one monthly loan payment every month, instead of several loan payments every month over time. Having less checks to write every month is just one benefit of doing a loan consolidation.

The loan rates offered will be based on your financial situation and credit. With a FICO credit score under 600, it can be a challenge to get good rates and plans.

3 Benefits You Can Get With Student Loan Consolidation

1. Lower Monthly Payments. Depending on your credit situation and the type of lender you choose, you may be able to lower your monthly payments by up to 50%

2. Having Fixed Interest Rates. With some federal consolidation loans you can have a fixed rate for the life of your student loan. You can check online to calculate the interest rate on a new student loan consolidation based on the rates of your current student loans.

3. Extending Your Payment Period. You may have a lot of student loan debt. With federal consolidation loans you may be able to extend the payment term up to 30 years. It’s a good idea to realize you will end up paying more interest over the life of your student loan consolidation. The idea is to get some leverage until your career takes off.

Online Resources To Help With Bad Credit Student Loans And Student Loan Consolidation?

With today’s Internet resources, you have an advantage when looking for bad credit student loans and consolidation of your student loans. If you take the time now to do research on the process of getting a bad credit student loan or consolidation , you may be able to avoid some of the hassles of getting approved.

There are many websites with services that can help to make it easier to see if you can qualify. These sites have many tools and information to help you get the best interest rates available for your credit situation.

The National Commission on Fiscal Responsibility and Reform has issued a report that recommends the elimination of subsidized federal student loans in order to reduce federal spending. The recommendation is one of 50 that the bipartisan panel, which was created by President Obama and charged with finding ways to reduce the federal deficit, brought forward.

Federal subsidized student loans are government-issued student loans on which the government pays —subsidizes — the interest while a student is in school or in an approved deferment period. During deferment periods, which are granted on a case-by-case basis when a student loan borrower is experiencing financial hardship or other extenuating circumstances, the borrower isn’t required to make principal or interest payments on his or her federal college loans.

Subsidized student loans, awarded on the basis of financial need, are available to low-income students and students from low-income families. The President’s fiscal commission estimates that eliminating the federal interest payments on these subsidized college loans would save about $5 billion annually.

The proposal to eliminate subsidized federal student loans isn’t a recommendation to shutter the federal student loan program altogether. Federally funded student loans are also available in an unsubsidized form, and these unsubsidized student loans are awarded to eligible students, regardless of income bracket, who qualify for federal college financial aid to help them pay for college.

Do Student Loan Subsidies Benefit Students?

A growing number of policy groups support dispensing with federally subsidized student loans. The College Board recommended the same move in 2008, and some Democratic lawmakers also included the elimination of subsidized student loans in the initial draft of the student loan reforms that were enacted in 2009. The provision was dropped after student advocates and higher education lobbyists successfully persuaded House Democrats to retain the student loan subsidies.

Supporters of dropping the subsidized interest benefit say that subsidized student loans don’t do anything to make college more accessible to the low-income students to whom the loans are awarded, since borrowers don’t reap the benefit of the subsidy until after they’ve graduated.

Others who support the move to do away with subsidized student loans argue that student borrowers shouldn’t receive a benefit designed to reduce student loan debt that’s based on what the borrower’s family income was 10 or 20 years earlier.

Instead, proponents contend, already-available flexible student loan repayment plans like income-dependent payments, graduated payments, and repayment term extensions are more effective and fairer.

A new income-based repayment plan, instituted last year, is based on the student loan borrower’s post-graduation income, a better measure of a borrower’s long-term financial outlook.

Graduated repayment, in which a student loan borrower’s monthly payments start out low and gradually increase every two years — designed for borrowers who expect their income to increase steadily over time — is available to all borrowers of federal college loans, regardless of their family income at the time they attended college.

More Proposed Changes to Federal College Financial Aid

Eliminating federal student loan interest subsidies isn’t the only change the fiscal commission recommends. The commission’s deficit-reduction proposal would also put an end to payments to colleges and universities for the administration of campus-based federal financial aid programs.

Colleges and universities administer certain federal financial aid awards locally —Supplemental Educational Opportunity Grants, Perkins loans, and federally funded work-study programs. A school may retain as much as 5 percent of the federal financial aid funds provided for these programs to cover the cost of administration. Institutions that distribute federal Pell Grants also receive a small fixed payment to cover administrative costs.

Under the proposed deficit-reduction plan, the 5-percent administrative fee would be eliminated, and all federal funds would be delivered in the form of student financial aid, with no portion of those funds being siphoned away any longer in the form of administrative costs.

The commission’s rationale for eliminating these administrative fees is that colleges and universities benefit from federal grant programs because, unlike college loans, the federal grant dollars effectively increase enrollment by making college more affordable for students.

From Policy Proposal to National Law

The fiscal commission doesn’t have the final say on which recommended reforms are enacted. Currently, the commission’s report is in draft form. The commission must prepare a final recommendation no later than Dec. 1, 2010, and the final draft must have the approval of at least 14 of the commission’s 18 members.

Once the report is finalized and presented to the White House, legislators are expected to take up the recommendations and convert them into legislative mandates.

The commission’s recommendations are designed to balance the federal budget by 2015. If adopted, the recommendations would involve a broad set of austerity measures, including both spending cuts and tax reforms.

Student loan consolidation has many benefits. Before you sign up on the dotted line, you should know how to get the best student loan consolidation rates. If you are tired of too many bills and monthly due dates, it may be time to find the best student loan consolidation you qualify for.

How Student Loan Consolidation Works

Here is typically how a student loan consolidation works. When a student first applied for several loans from several different agencies and student loan providers, they each gave a different interest rate and term for paying back the loans. The idea of student loan consolidation, is to take all the different student loans and put them into one easy convenient loan. You them only have to make one monthly loan payment every month, instead of several loan payments every month over time. This saves the student both time and money. Having a lower interest rate and less checks to write every month are a couple of advantages of doing a student loan consolidation.

The most obvious way to get the best student loan consolidation rate, is by having great credit. It’s easy to get great student loan consolidation rates with a credit score over 660. But, there are several ways to get the best student loan consolidation rates.

Know Your Credit Before Shopping For Student Loan Rates

By doing a simple Google or Yahoo search on credit and credit scores to find the information you need to check out your credit score. This really should be your first step to getting the best student loan consolidation rates. With knowledge, you will get the best student loan consolidation rates for your financial situation.

Student loan consolidation rates can vary from person to person. The student loan consolidation rates offered will be based on your financial situation and credit score. With a credit score under 600, you will have a tough time getting a good student loan consolidation rate.

Refinancing And Home Equity Loans Used For Student Loan Consolidation

With a home equity loan, you can get the best student loan consolidation rates possible with good credit. Secured by your home, a student loan consolidation can help get rid of your high credit card rates and loans. You will have less bills to pay, with the best student loan consolidation rates to lower your interest on several loans.

Refinancing your home mortgage may be an option to get the best student loan consolidation rates.

The important thing to remember with home equity loans and refinancing, is to be logical and don’t let your emotions get the best of you. You may get the best student loan consolidation rates available, but you still have to pay back the loan over time.

It’s best to take the time to sit down and research all your options that are available to you to get the best loan and interest rate.

5 Benefits of Student Loan Consolidation

1. Lower Monthly Payments. Depending on your student loan situation and the type of lender you choose, you may be able to lower your monthly payments by up to 50%

2. Having Simple Loan Payments. By consolidating your student loans, you only have one loan payment per month and one check to write. This is very beneficial if you are writing several checks every month to multiple lenders.

3. Having Fixed Interest Rates. With some federal consolidation loans you can have a fixed rate for the life of your student loan. It’s best to do research to see what the best interest rates and term you are eligible for. You can check online to calculate the interest rate on a new student consolidation loan based on the rates of your current student loans. You can then round up to the nearest 1/8th of a percent of the weighted average of the interest rates on your eligible student loans.

4. Extending Your Payment Period. You may have a lot of student loan debt. With federal consolidation loans you may be able to extend the payment term up to 30 years. It’s a good idea to realize you will end up paying more interest over the life of your student loan consolidation. The idea is to get some leverage until your career takes off. You can focus on making money instead of several monthly loan payments.

5. In School Consolidation Programs. While still in school, eligible students can lock in a low rate. This would put you into repayment status, but since you are still in school, you are automatically put into deferment. The drawback of consolidating your loans while in school, is that you lose your 6 month grace period. The solution to this would be to request forbearance for up to 1 year on your student loan consolidation. Here again you can do some research and get more information online.

Resources Online For Getting The Best Student Loan Consolidation Rates

With today’s Internet resources, you have an advantage when looking for the best student loan consolidation rates online. Take time to get educated on the process of getting the best student loan consolidation rates, and you can save yourself thousands of dollars on the student loan consolidation rates available, with just a few clicks of the mouse.

The idea is to combine all your current debts that you owe into one large debt with the lowest interest rate possible. Instead of making monthly payments on several high interest loans ranging from 12% to 28%, you can make one payment each month to one company.

Today’s career minded students can get help with the burden of having several student loans. You can focus on your career, instead of losing sleep over paying several monthly loan payments. Student loan consolidation can be the solution with many advantages. With today’s Internet technology, you can get a student loan consolidation quickly and easily.

How can Direct Student Loans help pay for college or career school expenses?

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education (the Department) rather than a bank.

Direct Loans are:

Simple-You borrow directly from the federal government.

Flexible-You can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.

What kinds of Direct Loans are available?

Direct Subsidized and Unsubsidized Loans- Your eligibility for Direct Subsidized and Unsubsidized Loans is based on the information reported on the Free Application for Federal Student Aid (FAFSASM). No interest is charged on subsidized student loans while you are in school at least half-time, during your grace period, and during deferment periods. Interest is charged on unsubsidized loans during all periods.

Direct PLUS Loans-Direct PLUS Loans are low interest loans available to parents of dependent students and to graduate and professional degree students. Interest is charged during all periods.

Direct Consolidation Loans – Direct Consolidation Loans are loans for borrowers who want to combine their eligible federal student loans into a single loan.

What are the eligibility requirements?

You must be enrolled at least half-time at a school that participates in the Direct Loan Program, and you must meet general eligibility requirements for the Federal Student Aid programs. You can find more information about these requirements on the Direct Loan website at www.direct.ed.gov, or by contacting your school’s financial aid office.

How do I apply for aid?

You apply for a Direct Subsidized and Unsubsidized Loan and other federal student aid by completing a Free Application for Federal Student Aid (FAFSA). The information from your application will be shared with the schools that you have identified on the FAFSA. Some schools have additional application procedures-check with your school’s financial aid office to be sure. After your FAFSA has been processed, the school will notify you, usually through an award letter, of the types of aid for which you are eligible.

How do I take out a Direct Loan?

You must complete a Master Promissory Note (MPN). The MPN is a legally binding agreement to repay your loan to the Department. In most cases, one MPN can be used for loans that you receive over several years of study. Before receiving your first Direct Loan, you must sign an MPN that you’ll get from your school or from the Department. Check with your school’s financial aid office.

How much can I borrow?

The maximum amount you can borrow each school year depends on your grade level and other factors. It ranges from $5,500 per year for a dependent freshman to $20,500 per year for a graduate or professional degree student; however, the actual amount you are eligible to borrow each year is determined by your school and may be less than the maximum amount. There are also limits on the total amount of your loan debt. Graduate and professional degree students who need to borrow more than the maximum subsidized or unsubsidized loan amounts to meet education expenses not covered by other financial aid may be eligible to receive a Direct PLUS Loan.

What is the interest rate?

Direct Loans have a fixed interest rate that differs depending on the loan type and other factors. Check with your school’s financial aid office or the Direct Loan website at www.direct.ed.gov for details and current interest rate information.

Is there a charge for this loan?

Yes. In addition to interest, you pay a loan fee that is a percentage of the principal amount of the loan. We deduct the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.

How will I receive my loan money?

Your school will generally disburse your loan money by crediting it to your school account but may also give some of it to you directly. Your loan money will usually be disbursed in at least two installments.

How will I repay my loan?

When you receive your first Direct Loan, you will be contacted by the servicer for that loan. Your loan servicer will provide regular updates on the status of your Direct Loan and of any additional Direct Loans that you receive.

When do I have to begin repaying my loan?

Direct Subsidized and Unsubsidized Loans have a 6-month grace period that starts the day after you graduate, leave school, or drop below half-time enrollment. You don’t have to begin making payments until your grace period ends. Note that repayment on a Direct PLUS Loan begins 60 days after the last installment of the loan for that school year is made; however, there is the option to defer repayment of a Direct PLUS Loan. See “Repaying Your Loans” on Student Aid on the Web at www.studentaid.ed.gov.

How much time will I have to repay my loan, and how much will I have to pay each month?

Generally, you’ll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose.  Your monthly payment amount will be based on how much you borrowed and how long you take to repay. You may choose one of several repayment plans:

Standard Repayment Plan-Fixed monthly payments for up to 10 years.

Graduated Repayment Plan-Payments that start off lower at first, and then gradually increase, usually every 2 years. The loan must be repaid in 10 years.

Extended Repayment Plan-Fixed or graduated monthly payments over a period of time, not to exceed 25 years. To be eligible for this repayment plan, you must have more than $30,000 in Direct Loan debt and you must not have had an outstanding balance on a Direct Loan on Oct. 7, 1998.

Income-Contingent Repayment (ICR) Plan-Your monthly payment is adjusted each year based on your annual income (and your spouse’s income, if you’re married), your family size, and the total amount of your Direct Loans. After 25 years, any unpaid loan amount will be forgiven. (This plan is not available to parent Direct PLUS Loan borrowers.)

Income-Based Repayment (IBR) Plan-Your monthly payment is capped at an amount that is affordable based on your income and family size. To find out if your federal student loan debt is high enough to qualify for this plan, use the repayment calculators on Student Aid on the Web at www.studentaid.ed.gov or on your loan servicer’s site. Your monthly payment amount may be adjusted annually. If you repay under IBR for 25 years and meet other requirements, any remaining balance will be forgiven. (Direct PLUS
Loans made to parents may not be repaid under IBR.)

You can change plans at any time. There’s no penalty if you make payments before they are due or pay more than the amount due each month. For more information about these repayment plans, or to use our online calculator to calculate your estimated loan payment under different repayment plans, go to Student Aid on the Web at www.studentaid.ed.gov or to your loan servicer’s website.

Can I ever postpone making loan payments?

Yes, under some conditions you may receive a deferment or forbearance that allows you to temporarily stop or lower your payments. For example, you may qualify for a deferment if:

You return to school at least half-time at a school that’s eligible to participate in the Federal Student Aid programs.

You are studying full-time in a graduate fellowship program.

You are in an approved full-time disability rehabilitation program.

You are unemployed or meet our rules for economic hardship (limited to 3 years).

You may also qualify for a deferment based on active duty service in the U.S. Armed Forces or National Guard. Refer to the Master Promissory Note for your loan or contact
your loan servicer for more information about specific qualifications for deferment based on military service and for other available deferments.

If you don’t qualify for a deferment but are temporarily unable to make loan payments for such reasons as illness or financial hardship, we may grant you a forbearance.

Can my loan ever be cancelled, discharged, or forgiven?

You must repay your loan even if you don’t complete or can’t find a job related to your program of study, or are unhappy with the education you paid for with your loan. However, we will discharge (forgive) your loan if you have your loan cancelled in bankruptcy, if you become totally and permanently disabled, or if you die.

We may discharge some or all of your loan if:

Your school closed before you completed your program.

Your school forged your signature on your promissory note or falsely certified that you were eligible for aid.

Your loan was falsely certified through identity theft.

You withdrew from school but the school didn’t pay a refund that it owed. See Student Aid on the Web at www.studentaid.ed.gov for more information about refund policies.

You also may qualify for forgiveness of some or all of your loan balance:

If you teach full-time for 5 years at a school or educational service agency serving low-income families and meet other requirements; or

After you have made 120 payments on a Direct Loan while employed in certain public service jobs (additional conditions apply).

For more information about loan forgiveness options, go to Student Aid on the Web at www.studentaid.ed.gov.

Where can I get more information?

For more information about the Direct Loan Program and other Federal Student Aid programs, contact the financial aid office at your school or go to Student Aid
on the Web.