Loan Repayment, Consolidation, Deferment and Forbearance
You begin repaying Federal Direct Stafford loans six months after graduation, leaving school, or dropping below half-time enrollment. You must complete federally required Exit Counseling before you graduate from SPC, if you drop below half-time attendance, or withdraw from classes completely. Your academic records will be on hold until this is completed.
The Department of Education offers Loan Repayment Plans and Calculators and information on loan forgiveness and cancellation. You must repay the full amount of your loan regardless of whether you complete the program or complete within the regular time for completion, are unable to obtain employment upon completion, or are otherwise dissatisfied with or do not receive the educational or other services you purchase from the school.There is no penalty for prepayment.
Sample Loan Repayment Amounts
Example: $2880 in subsidized plus $5762 in unsubsidized loans with a 4% interest rate; Married Filing Jointly; $30,000 Adjusted Gross Income; family size of 3; living in Florida
|Repayment Plan||Repayment Period||Monthly Payment||
Total Interest Paid
|Total Amount Paid|
|Standard||120 months||$88 to $88||$1,858||$10,500|
|Graduated||120 months||$49 to $147||$2,319||$10,961|
|Income-Based Repayment (IBR)||197 months||$0 to $87||$4,052||$12,694|
|IBR for New Borrowers||224 months||$0 to $87||$4,828||$13,470|
|Pay As You Earn||224 months||$0 to $87||$4,828||$13,470|
|Income-Contingent Repayment (ICR)||199 months||$54 to $68||$3,366||$12,008|
Student Loan Servicer
When your loan is due, your federal loan servicer will mail you a payment schedule with your monthly payment of principal and interest, and the unpaid balance for each month it takes to repay your total debt. If they do not contact you, you are still responsible for making payments. Login to Federal Student Aid for find your Federal Loan Servicer.
FedLoan Servicing (PHEAA)
Granite State – GSMR
Great Lakes Educational Loan Services, Inc.
Federal Student Aid Ombudsman Group
If you're in a dispute about your federal student loan, contact the Federal Student Aid Ombudsman Group as a last resort. The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans. You may also call 877-557-2575, fax 606-396-4821, or write to FSA Ombudsman Group, P.O. Box 1843, Monticello, KY 42633.
Federal Direct Consolidation Loans
The Federal Direct Consolidation Loan Program allows you to combine one or more certain federal student loans and to make one monthly payment to the federal government. There is no charge for consolidation, and repayment plans are offered. The interest rate is fixed for the life of the loan and cannot exceed 8.25 percent.
You can call a financial aid counselor if you have questions about consolidation.
Pros and cons of loan consolidation
- Locks in the interest rate
- Allows the borrower to combine loans from multiple lenders into a single repayment schedule (i.e., one monthly payment)
- Allows the borrower a longer repayment period, which will reduce the amount of the borrower's monthly payment
- Allows a borrower to clear an over-award of Stafford loans or clear a defaulted student loan
- Locks in the interest rate, for older Stafford loans that have a variable interest rate
- May increase the total cost of the borrower's loan, the longer the repayment, the more interest you will pay
- Borrower may have to forfeit all or a portion of the grace period
- Borrower may lose certain borrower benefits related to their current loans
- Certain deferments may be lost; however, borrowers retain their ability to request most major deferments
- Borrowers who consolidate Perkins Loans lose the deferment subsidy and cancellation eligibility options related to Perkins loans
Loans that can be consolidated
Federal Direct Loans and Federal Family Education Loan(s) that are eligible for loan consolidation include:
- Previous Consolidation Loans
- Perkins Loans
- Health Professional Student Loans
- Nursing Student Loans
- Health Education Assistance Loans (HEAL)
- Federally Insured Student Loans (FISL)
*Alternative loans are not eligible to be included in a Federal Consolidation Loan
What does it mean to consolidate a federal loan?
When should I consolidate my loan?
Loan deferment and forbearance
If you have trouble making your education loan payments, you may qualify for a:
- Deferment, a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment or economic hardship OR
- Forbearance, a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty.
These periods do not count toward the length of time you have to repay your loan. You cannot get a deferment or forbearance for a loan that is already in default. You must continue making payments on your student loan until you have been notified that a deferment or forbearance has been granted.
A deferment is a period of time during which no payments are required and interest continues to accrue on the unsubsidized portion. Interest does not accrue on the subsidized portion. PLUS borrowers may defer repayment while the student is enrolled at least half-time. To qualify for a deferment, you must meet at least one of the eligibility requirements listed below, with certain conditions:
- Be enrolled at least half-time (at least six credit hours) at a postsecondary school
- Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled
- Be unable to find full-time employment (up to 3 years)
- Face an economic hardship including Peace Corps Service (up to 3 years)
- Be on Active Military Duty - If a borrower is called to active duty during a war, other military operation or national emergency and if the borrower was serving on or after Oct. 1, 2007, the borrower qualifies for an additional 180-day period following the demobilization date for the qualifying service.
SPC routinely sends enrollment information to the National Clearinghouse where lenders can access the data. If your enrollment is not being recognized, you can request a loan deferment form by contacting your Federal Loan Servicer. For completion, fax the form to 727-341-3231 or submit it at a campus Business Office. For confirmation that your enrollment information was reported, you may email firstname.lastname@example.org.
If you temporarily cannot meet your repayment schedule, but you are not eligible for a deferment, your lender might grant you forbearance for a limited and specific period of time. Interest continues to accrue and you are responsible to pay it. Generally, your lender can grant forbearance for periods up to 12 months at a time, for a maximum of three years. You will need to provide documentation to the lender to show why you should be granted forbearance. The lender must send you a notice confirming the terms that were agreed to and record them in your file. Receiving a forbearance is not automatic: you must apply for it.
- To request a forbearance, contact your individual Federal Loan Servicer.
- Login to Federal Student Aid to find your Federal Loan Servicer.
- Details on postponing loan repayments
- You can call a financial aid counselor for assistance in requesting a deferment or forbearance.
What does deferment mean?
What does forbearance mean?