Federal Student Loan Repayment

As graduation nears, so does the reality of loan repayment. We want to make sure you know how to navigate the complicated world of repayment. Here you can find information on what loans you have, what payment options you have, what to do if you can’t pay, and how you might be able to get your loans forgiven.


Loan Repayment Workshop

You’re not alone in this process. To help prepare you, the Financial Aid Office is also offering a Student Loan Repayment Workshop where you can learn what you need to know to successfully pay back your loans. To find out more information or sign up for a class, visit Student Loan Repayment Workshop.


Repayment: What to Expect



The Basics



Find Out What You Owe

Visit the National Student Loan Data System (NSLDS) to view information about all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans. You will need your FSA ID and password to access your information. If you have have forgotten your FSA ID or not yet set one up, you can do so at fsaid.ed.gov.

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Know Your Servicer

A loan servicer is a company that handles the billing and other services on your federal student loan. The loan servicer will work with you on repayment plans and will assist you with other tasks related to your federal student loan.

You can set up an online login with them now to access your loan information, make payments, and access forms.

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Know Your Payment Options

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you are required to begin repayment. Once your grace period is up, it will be important that you choose the right payment plan option that works for you. As a rule of thumb, your payments should not exceed 8% of your total income. To find more detailed information on each repayment plan option, visit Federal Student Aid.

Use the loan Repayment Estimator to calculate what your payments would look like for each repayment plan.


Standard Repayment Plan

  • Fastest and most cost-effective
  • Pay a fixed amount each month until your loans are paid in full
  • Monthly Payments: at least $50
  • Repayment Term: Up to 10 years
  • Default payment plan
  • Eligible loans:
    • Subsidized and Unsubsidized loans (Direct or FFEL)
    • All PLUS loans (Direct or FFEL)


Graduated Repayment Plan

  • Payment start low and gradually increase every two years
  • Monthly Payments: varies throughout repayment
  • Repayment Term: Up to 10 years
  • Pay more over time than under the 10-year standard.
  • Eligible loans:
    • Subsidized and Unsubsidized loans (Direct or FFEL)
    • All PLUS loans (Direct or FFEL)

To Apply: Contact your servicer


Extended Repayment Plan

  • Must have more than $30,000 in federal loans
  • Allows you to extend the repayment term up to 25 years
  • Monthly Payments: may be fixed or graduated, lower than standard
  • Repayment Term: Up to 25 years
  • Pay more over time than under the 10-year standard.
  • Eligible loans:
    • Subsidized and Unsubsidized loans (Direct or FFEL)
    • All PLUS loans (Direct or FFEL)

To Apply: Contact your servicer

Income Contingent Repayment (ICR) 

  • Monthly payments based on adjusted gross income, family size, and total amount of eligible loan debt.
  • Monthly Payment: varies each year depending on income
    • Lesser of the following
      • 20% of your discretionary income
      • what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income
    • Must apply annually.
    • Repayment Term: Up to 25 years
      • Any remaining balance after 25 years will be forgiven
      • Eligible loans:
        • Direct Subsidized and Unsubsidized loans
        • Direct PLUS loans made to students
        • Direct Consolidation Loans
    • Interest captializes once per year

To Apply: Visit studentloans.gov and complete the IBR/Pay As You Earn/ICR Repayment Plan Request


Income Based Repayment (IBR)

(NOT a new borrower on/after July 1, 2014)

  • Monthly payments based on adjusted gross income and family size
  • Must have a partial financial hardship
  • Monthly Payments: Varies each year depending on income.
    • Maximum will be 15% of discretionary income
    • Can be as low as $0.00
    • Must apply annually.
    • Repayment Term: Up to 25 years
      • Any remaining balance after 25 years will be forgiven
      • Eligible loans:
        • Subsidized and Unsubsidized loans (Direct or FFEL)
        • All PLUS loans made to students (Direct or FFEL)
        • Consolidation Loans (Direct or FFEL)
    • Has Interest Subsidy Benefit: If monthly payment does not cover the amount of interest that accrues each month, the government will pay unpaid accrued interest on Direct Subsidized Stafford loans for up to 3 consecutive years.

To Apply: Visit studentloans.gov and complete the IBR/Pay As You Earn/ICR Repayment Plan Request

 

Income Based Repayment (IBR)

(If new borrower after July 1, 2014)

  • Monthly payments based on adjusted gross income and family size
  • Must have a partial financial hardship
  • Monthly Payments: Varies each year depending on income.
    • Maximum will be 10% of discretionary income
    • Can be as low as $0.00
    • Must apply annually.
    • Repayment Term: Up to 20 years
      • Any remaining balance after 20 years will be forgiven
      • Eligible loans:
        • Subsidized and Unsubsidized loans (Direct or FFEL)
        • All PLUS loans made to students (Direct or FFEL)
        • Consolidation Loans (Direct or FFEL)
    • Has Interest Subsidy Benefit: If monthly payment does not cover the amount of interest that accrues each month, the government will pay unpaid accrued interest on Direct Subsidized Stafford loans for up to 3 consecutive years.

To Apply: Visit studentloans.gov and complete the IBR/Pay As You Earn/ICR Repayment Plan Request

Pay As You Earn

  • Monthly payments based on adjusted gross income and family size
  • Must have a partial financial hardship
  • Must be new borrower on or after Oct. 1, 2007, and received disbursement of a Direct Loan on or after Oct. 1, 2011.
  • Monthly Payment: Varies each year depending on income.
    • Maximum will be 10% of discretionary income
    • Can be as low as $0.00
    • Must apply annually.
    • Repayment Term: Up to 20 years
      • Any remaining balance after 20 years will be forgiven
      • Eligible loans:
        • Direct Subsidized and Unsubsidized loans
        • Direct PLUS loans made to students
        • Direct Consolidation Loans
    • Has Interest Subsidy Benefit: If monthly payment does not cover the amount of interest that accrues each month, the government will pay unpaid accrued interest on Direct Subsidized Stafford loans for up to 3 consecutive years.

To Apply: Visit studentloans.gov and complete the IBR/Pay As You Earn/ICR Repayment Plan Request

Repayment Examples

Meet John

John completed his undergraduate program in four years and graduated with a total of $29,214 in federal student loans with an average 3.9% interest rate. He currently has an Adjusted Gross Income of $30,000. This is what John's repayment would look like - 

Direct Undergraduate Student Loan Repayment Example

Repayment

Plan

Repayment

Period

Initial Monthly

Payment

Final Monthly

Payment

Total Interest

Paid

Total Amount

Paid

Standard 120 months $294 $294 $6,113 $35,327
Graduated 120 months $165 $494 $7,624 $36,838
Income Contingent 174 months $192 $252 $9,600 $38,814
Income Based (IBR) 164 months $156 $294 $9,729 $38,943
Pay As You Earn (PAYE) 224 months $104 $294 $14,845 $44,058

*Calculations include an annual 5% income and 3.3% poverty line increase. Use the loan Repayment Estimator to get an individualized repayment estimate.

Meet April

April completed her undergraduate program in four years and continued to grad school for 3 additional years. She graduated with a total of $90,500 in federal student loans with an average 5.3% interest rate. She currently has an Adjusted Gross Income of $35,000. This is what April's repayment would look like - 

Direct Graduate Student Loan Repayment Example

Repayment

Plan

Repayment

Period

Initial Monthly

Payment

Final Monthly

Payment

Projected Loan

Forgiveness

Total Interest

Paid

Total Amount

Paid

Standard 120 months $974 $974 $0 $26,431 $116,931
Graduated 120 months $553 $1,659 $0 $33,332 $123,832
Extended Fixed 300 months $546 $546 $0 $73,433 $163,933
Extended Graduated 300 months $402 $865 $0 $88,369 $178,869
Income Contingent 238 months $389 $1,005 $0 $71,305 $161,805
Income Based (IBR) 300 months $219 $934 $54,791 $115,264 $150,973
Pay As You Earn (PAYE) 240 months $146 $467 $119,688 $67,232 $67,232

*Calculations include an annual 5% income and 3.3% poverty line increase. Use the loan Repayment Estimator to get an individualized repayment estimate.

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Loan Consolidation

Carefully consider whether loan consolidation is the best option for you. Loan consolidation can greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. However, if you increase the length of your repayment period, you'll also make more payments and pay more in interest. 

Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated are paid off and no longer exist. It is important to understand that consolidating your loans may make you ineligible for some borrower benefits such as loan forgiveness or cancellation. If you decide to consolidate during your grace period, you will lose your remaining grace and repayment will begin once your application is processed.

If you simply need to reduce your monthly payment, you may consider an income driven repayment plan instead.

To find out if consolidation may be right for you, complete this loan consolidation counselor.

For more detailed information on loan consolidation, you can also visit Federal Student Aid

To Apply: Visit studentloans.gov and complete the Direct Consolidation Loan Application and Promissory Note

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Deferment and Forbearance

In some cases, you can receive a deferment or forbearance that allow you to temporarily postpone or reduce your payments. You must apply through your servicer and be approved to qualify. Keep in mind, there are time limits on how long you can be in a deferment or forbearance. While they are available to you, it is important to use them only when you really need them.


Deferment

During a deferment, you do not need to make payments. The federal government will pay the interest on your subsidized loans during this time as well. All other loans, including PLUS and unsubsidized loans, will continue to accrue interest. Interest will be capitalized (added to your principal balance), and the amount you pay in the future will be higher. Most common reasons for a deferment are unemployment, economic hardship and attending school.


Forbearance

In some cases, you may not qualify for a deferment, but you can qualify for forbearance. With forbearance, you may be able to stop your monthly payments or reduce them for up to 12 months. Interest will accrue on all of your loans during this time.

For a list of reasons you may qualify visit Federal Student Aid or contact your servicer.

To Apply: Contact your servicer.

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Loan Forgiveness and Cancellation


Teacher Loan Forgiveness

The Stafford Loan Forgiveness Program for Teachers is intended to encourage individuals to enter and remain in the teaching profession. Under this program, you may receive loan forgiveness of up to $17,500 if you teach for five consecutive academic years in schools or educational service agencies that serve low-income families, and meet other requirements.

To learn more and find out if you qualify, visit Federal Student Aid.


Perkins Loan Cancellation and Discharge

The following Federal Perkins Loan Program cancellations apply to individuals who perform certain types of public service or are employed in certain occupations.

For each complete year of service, a percentage of the loan may be canceled. The total percentage of the loan that can be canceled depends on the type of service performed. Depending on the type of loan you have and when that loan was taken out, you may be eligible to cancel part of or your entire loan if you have served as one of the following:

  • Volunteer in the Peace Corps or ACTION program (including VISTA)
  • Teacher
  • Member of the U.S. armed forces (serving in area of hostilities)
  • Nurse or medical technician
  • Law enforcement or corrections officer
  • Head Start worker
  • Child or family services worker
  • Professional provider of early intervention services

To learn more or find out if you qualify, contact the university’s Federal Perkins Loan Specialist with any questions: Phone: 503-554-2239 or email perkins@georgefox.edu.


Public Service Loan Forgiveness (PSLF)

The PSLF program is intended to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, you may qualify for forgiveness of the remaining balance due on your Federal Direct Loan Program loans after you have made 120 qualifying payments on those loans while employed full-time by certain public service employers.

Eligibility Requirements for PSLF

  • Have Eligible Loan Types
  • Make 120 Qualifying Payments
  • Make Payments Under an Eligible Repayment Plan
  • Maintain a Full-Time Employment Status
  • Work for a Qualifying Public Service Organization

To learn more and find out if you qualify, visit Myfedloan.org/PSLF


Example of Public Service Loan Forgiveness


Meet Summer

Summer graduated with a total of $50,000 in federal student loans. After graduating, she landed a job as a case worker and applied for Public Service Loan Forgiveness. She currently has an Adjusted Gross Income of $35,000. This is what April's repayment would look like with Public Service Loan Forgiveness - 

Public Service Loan Forgiveness Example

Repayment

Plan

Repayment

Period

Total Amount

Paid

Total Amount

Forgiven

Income Contingent 120 months $55,952 $19,858
Income Based (IBR) 120 months $37,222 $45,711
Pay As You Earn (PAYE) 120 months $24,814 $57,189

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