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Our contact center is available to answer questions and help you better understand repayment options that may fit your situation. Contact us at 855.471.1615 or reach out directly to your loan servicer for guidance and assistance.
Before You Begin
When putting together an action plan, find out which federal loan types you have and when they were disbursed. Your loan types affect which repayment plans you can use, whether consolidation may help, and whether you qualify for benefits such as Public Service Loan Forgiveness.
Log in to StudentAid.gov and review your loan details carefully. If your loans begin with “Direct”, they are generally Direct Loans; FFEL and Perkins loans may have different rules and may need to be consolidated into a Direct Consolidation Loan for access to some programs.
Federal student loan repayment options are changing under recent legislation. The best repayment strategy depends on your loan type, when you borrowed, your income, your career path, and your overall financial situation. Understanding your options can help you make informed decisions, avoid delinquency, and stay on track toward your financial goals.
Whether you’re looking for lower monthly payments, temporary relief, faster repayment, or forgiveness opportunities, it’s important to understand how each option may impact your loans over time.
The federal Repayment Assistance Plan (RAP) is designed to help borrowers manage repayment based on income and financial circumstances. Monthly payments may be lower for eligible borrowers, helping make repayment more affordable.
While lower payments may help provide short-term financial flexibility, borrowers should understand that extending repayment over a longer period of time may increase total interest costs.
Eligibility and repayment terms may vary depending on your loans and repayment status.
Standard repayment plans typically offer fixed monthly payments over a set repayment period. Borrowers who are able to make higher monthly payments may pay off their loans faster and reduce the total amount of interest paid over time.
Fixed payment structures can also provide predictable monthly budgeting and payment stability.
Some loan servicers may offer interest rate reductions for borrowers who enroll in automatic payments.
Federal loan consolidation allows eligible borrowers to combine multiple federal student loans into a single Direct Consolidation Loan. Consolidation may simplify repayment and provide access to certain repayment or forgiveness programs depending on eligibility.
However, consolidation may also extend repayment timelines, increase total interest paid over time, or impact progress toward certain forgiveness programs. Borrowers should carefully review the pros and cons before consolidating.
Private education loans cannot be included in a federal Direct Consolidation Loan.
Borrowers experiencing financial hardship or difficulty making payments may qualify for temporary relief options such as deferment or forbearance. These options may temporarily postpone or reduce payments depending on eligibility and loan type.
It’s important to contact your loan servicer as early as possible if you are struggling to make payments. Waiting too long can result in delinquency or default.
Borrowers should continue making payments until any approved relief is officially in place.
Certain federal programs may provide loan forgiveness, cancellation, or discharge for eligible borrowers. Examples may include:
- Public Service Loan Forgiveness (PSLF)
- Teacher Loan Forgiveness
- Total and Permanent Disability Discharge
- Closed School Discharge
- Borrower Defense to Repayment
- Forgery Loan Discharge
- Repayment of your loans under an Income-Driven Repayment Plan
Eligibility requirements vary based on loan type, repayment plan, employer, and individual circumstances.
Missing student loan payments can lead to delinquency and eventually default. Defaulting on federal student loans may have serious financial consequences, including:
- Damage to your credit score
- Collection activity
- Wage garnishment
- Tax refund offsets
- Loss of eligibility for additional federal student aid
- Loss of access to repayment plans, deferment, forbearance, or forgiveness options until you resolve the default.
Taking action early and communicating with your loan servicer may help you avoid long-term financial consequences.
When discussing repayment options with your loan servicer, consider asking:
- How do I set up automatic withdraw for payments?
- Which repayment plans are available for my loans?
- Would RAP lower my monthly payment?
- How much interest will I pay over time under each option?
- Am I eligible for forgiveness programs?
- Would consolidation benefit my situation?
- What temporary relief options are available if I cannot make payments?
- How will changing repayment plans impact my repayment timeline?