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Student Loan Repayment

Helpful information related to student loan repayment.

Financial Aid Office

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Loan Repayment FAQ & Information

After you graduate, withdraw, or drop below half-time enrollment, you are entitled to one grace period of six (6) months for direct loans. During this time, you are not expected to make payments. Grace periods are day specific. Your grace period begins on the day immediately following the day you stop attending school at least half-time and ends on the day before the repayment period begins. The interest on Subsidized loans is paid by the federal government during your grace period. On Unsubsidized and Grad PLUS loans, you are responsible for the interest, and the unpaid interest is capitalized (added to the loan principle) at the time of repayment. Repayment begins on the day after your grace period ends; your first payment is due within 60 days. You should receive communication from your loan servicer during your grace period. If not, contact your loan servicer directly.

Finding your loan servicer is easy and can be done by logging into studentaid.gov. Your FSA ID is required to access your information.

The Ensuring Continued Access to Student Loans Act (ECASLA) was signed into law in May 2008, which authorizes servicers to sell their student loan portfolios to the Department of Education in order to create ongoing liquidity and availability of funds for students. As such, you may acquire a new servicer for your loan. You will be notified about your loan servicer, and you will receive communication from your new servicer about any changes. Current servicers for the Department of Education are:

  • UHEAA
  • FedLoan Servicing
  • Nelnet
  • Great Lakes
  • ACS
  • Sallie Mae

Due to unforeseen circumstances, you may have difficulties making loan payments. This can be especially true in our current economy. If you remember just one thing from reading this: Stay in touch with your lender or servicer. Federal student loans have a lot of options available to help you when you are having trouble. Most alternative loans have some options as well, though they are more limited. You need to stay in touch with your lender to find out what option is best for your specific situation. Your lender wants to help you stay on track with repayment. Here are some of the options that may be available to you:

Deferment – Temporary postponement of payments (if you meet the qualifying criteria).
Forbearance – Temporary postponement of payments granted at the discretion of the lender or servicer. There are also forbearances that allow you to temporarily reduce your payments.
Interest-only repayment plan – This plan allows you to temporarily pay just the interest that accrues on your loan.

Change repayment plans – Ask if you can increase the term of your loan to lower your payments. You can always pay more each month once you are back on your feet (or switch back to a standard repayment plan at that time).
Remember that you do have options. Don’t become delinquent on your payments because you don’t know what to do. Defaulting should never be an option. Stay in touch with your lender and ask for help if you need it.

The Financial Aid Office reports all students’ attendance every two months directly through the National Student Loan Data System (NSLDS). This system reports to all federal loan servicers. If you have existing student loans and would like to submit loan deferment for yourself, please follow the instructions below:
  1. Download this In-School Deferment Request and complete sections 1, 3, and 7.
    1. If you don’t know where the form needs to be sent, click here to be directed to the FSA – Student Loan Deferment Website to view your federal loan servicer, as well as other important information about student loan deferment.
  2. Send the completed form to the Registrar’s Office via email (registrar@rm.edu) and they will send it directly to your servicer (as listed in section 7).

To defer existing federal student loans, students must apply for deferment. The process for obtaining deferment is as follows:

  1. Go to your loan servicer’s website to apply for deferment. If you do not know who services your student loan(s), click here to proceed. (See #4 below for information on accessing FSA.) You will need RMUoHP’s school code to complete your deferment; the code is G41932.
  2. Submit the deferment form to the RMU Registrar’s Office at registrar@rm.edu for enrollment verification and signature.
  3. Submit the signed form to the applicable loan servicer. Make sure you maintain a copy of the completed form in your personal records.
  4. About three weeks after submitting the paperwork to your servicer, click here to access your FSA account dashboard. This is a central site where you can view the status of ALL of your student loans.
  5. Follow the instructions on the page. It is recommended that you access the page from a browser that supports 128-bit encryption (e.g., Internet Explorer 9) for the security of your personal information.
  6. For any loans that do not show as currently in deferment, you will need to follow up directly with your loan servicer regarding what they still need. They may need you to resubmit the paperwork (again, as referenced in step #3 above, make sure to keep a copy).
  7. You will want to continually check on your loans to make sure they are still in deferment by performing the above steps at least once a semester. Students are responsible for confirming student loan deferment request(s) status.

A student loan goes into default when you have not made payments or other arrangements (such as a deferment or forbearance) and your loan has been delinquent for 270 days. Defaulting has very serious consequences that will follow you for years, including:

  • Significantly increased costs owed for collection and late fees.
  • Your loans may be assigned to a collection agency.
  • Your wages can be garnished.
  • Your federal and state income tax refunds can be seized.
  • Any federal benefits you receive (such as Social Security) can be intercepted.
  • You can be sued.
  • You won’t be able to receive any more federal financial aid.
  • You can lose your professional license.
  • Your credit will be seriously damaged.
  • You won’t be eligible for a deferment.


As you can see, these consequences are best to be avoided.

Stay in contact with your lender. Open your mail and answer your phone if your lender calls. They can’t help you if they can’t reach you.
If you are having trouble, speak with your lender or servicer to see if you qualify for a deferment or forbearance.
If you are back in school at least half-time, contact your lender. If you think your loan should be deferred and you are receiving correspondence from your lender – open it! You may need to inform them that you are back in school to get your loan deferred.

Consolidation is similar to refinancing your student loans. The lender (or the Department of Education in the Direct Loan Program) pays off all of the federal student loans you include in the consolidation and issues you a new consolidation loan. This loan has a fixed interest rate that is a weighted average of all of the interest rates from the underlying loans (rounded up to the nearest 0.125% percent).

You are not required to consolidate at any time. The final determination about whether or not to consolidate is yours.

If you have federal loans in both the Federal Family Education Loan (FFEL) Program (Stafford (Subsidized/Unsubsidized) or Grad PLUS loans borrowed from a bank or private lender) and the Direct Loan Program, or if you have loans that were purchased by the Department of Education from your lender, you will have to repay two different servicers. Consolidation will combine all of these loans into one monthly payment.

If you want to use the Income-Contingent Repayment (ICR) Plan or think you may qualify for Public Service Loan Forgiveness (PSLF), your loans must be in the Direct Loan Program. Consolidating all of your loans into the Direct Loan Program will satisfy that requirement.

If you borrowed before July 01, 2006, you may have some variable-rate Stafford loans. Consolidating these loans would give them a fixed interest rate.

If you have any borrower benefits tied to your loans, you may lose those benefits if you consolidate. Consult your lender or servicer for more information on this.
If you include a Perkins loan in your consolidation, that loan will become an unsubsidized loan and will lose any special cancellation benefits tied to the Perkins loan.
If you wish to consolidate, you can choose any lender who participates or the Department of Education’s Direct Loan Program.

Repayment Options

You have several repayment options available to you with federal student loans. Your servicer will automatically set up your loan on a standard repayment plan. Call your servicer to discuss your options if you prefer another repayment plan. You also have the option to change your repayment plan on an annual basis. In addition, many servicers offer discounts for borrowers who set up auto-pay. Federal loans currently offer a 0.25% interest rate reduction. The repayment plans offered for federal student loans are summarized below. Click here to visit the Federal Student Aid Loan Simulator website to estimate repayment options. *These payment plans are not available on all loans. Verify options with your loan servicer.

Fixed monthly payment of at least $50

The repayment term cannot exceed 10 years, excluding in-school, grace, and deferment or forbearance periods.

Payments are smaller at the beginning of repayment and gradually increase over time.

No single payment may be more than three times greater than any other payment.

The repayment term is generally 10 years.

Available to borrowers that do not have an outstanding balance before 10/07/1998 and whose outstanding balance totals more than $30,000 of principal and interest.

Payment must cover at least the interest due.

The repayment term cannot exceed 25 years.

You must demonstrate partial financial hardship to qualify.

Payments are 15% of your discretionary income. Discretionary income equals your adjusted gross income minus 150% of the federal poverty rate.

Payments are adjusted annually based on your adjusted gross income and family size.

Payments can be as low as zero.

If, after 25 years of payments, there is still a principal or interest balance on your loan, this remaining amount can be forgiven. For individuals who qualify for the Public Service Loan Forgiveness (PSLF) program, the forgiveness can occur after 10 years of payments.

Similar to the IBR plan described above.

Payments are 20% of your discretionary income. Discretionary income equals your Adjusted gross income minus 150% of the federal poverty rate.

Payments are adjusted annually based on your adjusted gross income and family size.

If, after 25 years of payments, there is a remaining principal or interest balance on your loan, this remaining amount can be forgiven. You may, however, be required to pay taxes on the amount that is discharged.

Disclaimer

Nothing on this website should be construed as authoritative financial advice. Your circumstances are unique, and you may want to consult a financial advisor. The author of this website is not a financial advisor.