“It is important to understand that student loans are real loans that must be repaid with interest. Before you borrow, take time to consider the long term (10-30 year) financial commitment you are making each time you accept loan funds.”
Information Every Borrower Should Know
The U.S. Department of Education provides information on your federal loans including loan types, disbursed amounts, outstanding principal and interest, and the total amount of all your loans. To access this information, go to studentaid.ed.gov and log in using your FSA ID and password.
Under the standard repayment 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 amount of time. However, you will likely pay the least amount of interest over the life of the loan. Estimate your monthly payments.
Federal Direct Loan Repayment Chart (Based on the Standard Repayment Plan)
|Principal Amount Borrowed||Current Interest Rate||Number of Months in Repayment||Monthly Payment||Total Interest Cost||Annual Salary to Manage|
It is recommended that your student loan payment be less than 8 percent of your future gross income. Calculate your minimum annual salary requirement.
As a borrower you do have rights in dealing with your loan and loan holder. You also have clear responsibilities as well.
- You are entitled to a copy of your Repayment Schedule and Disclosure Statement.
- You have the right to be notified in writing if your loans are sold or transferred for servicing.
- You are entitled to a repayment period of at least five years.
- You have the right to prepay any part of your loan at any time without penalty.
- If you qualify, you have the right to defer your loan payments.
- You are entitled to have any questions about your student loan answered by your lender, guarantor, or the U.S. Department of Education.
- You have the right to have your loan cancelled as a result of death or total and permanent disability.
- You have the right to a graduated or income-sensitive repayment schedule.
- If you first borrowed on or after 10/7/98 and have a debt of at least $30,000, you are entitled to an extended repayment schedule.
- You are entitled to receive the original Promissory Note when your loan is paid in full.
- You must notify your lender or servicer if you change your name, address or enrollment status (i.e., you withdraw, graduate, drop to less than half-time enrollment or change your school of attendance).
- You are responsible for knowing the terms of your student loans. You should keep copies of all student loan documents in a safe place.
- You must repay your loan whether or not you complete your studies, are satisfied with the education you receive or are able to find employment.
- You must make your loan payments on time.
- You must begin making payments at the end of your grace period whether you have received a repayment schedule or not. If your first payment due date is nearing and you have not received a payment schedule, you must immediately contact your lender or servicer.
- If you are unable to meet a schedule payment, you must contact your lender or servicer as soon as possible. The lender or servicer may be able to help if you seek assistance before you are late making a payment.
- When you graduate, withdraw or drop to less than half-time enrollment, you must give your school your expected permanent address, the name and address of your expected employer and the address of your closest relative. Your school will forward this information to your guarantor, lender or loan servicer.
Repayment on your loans begins six months after you graduate, withdraw or drop below half-time enrollment.
You have a choice of several repayment plans that are designed to meet the different needs of individual borrowers. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Additional information is available online at studentloans.gov.
Make Your Payments on Time
It is important that you make your full loan payment on time according to your repayment schedule. If you do not, you could end up in default, which has serious consequences.
Can’t afford your loan payments?
If you experience difficulty repaying your student loans after you leave school, you may qualify for deferment, forbearance, or alternative repayment options. It is important that you remain in contact with your loan holder and keep your loans in good standing.