Loan Education

Become a responsible borrower and save time and money by being aware of the details surrounding the repayment of your federal student loan. We can help you learn about your repayment plan options, when you have to start making payments, how to make your payment, how to pay off your loan faster, and what to do if you have an issue making payments.

Loan Repayment Tips

Update Your Contact Information

Ensure that your contact information is current in your profile on your loan servicer’s website and in your StudentAid.gov profile.

Get Information About Your Next Repayment

It is important that you understand what you owe. Your loan details are available through your loan servicer account and StudentAid.gov account. A billing statement outlining the amount owed, the payment due date, and upcoming interest will be sent to you by your loan servicer, and you must pay within 21 days of the due date.

Use The Best Repayment Plan That Works For You

Explore your repayment options using the Loan Simulator. A smart move to reduce your payment amount is to choose a repayment plan that is determined by your income. Income-driven repayment (IDR) plans are based on how much money you earn and family size. This also includes the Saving on a Valuable Education (SAVE) Repayment Plan. Under an IDR plan, payments may be as low as $0 per month. If you do not choose a repayment plan, you will be automatically enrolled in the Standard Repayment Plan.

Take Action If You Can’t Afford Your Payment

Contact your loan service provider immediately to discuss your options. You are able to lower your monthly payment by signing up for an IDR plan. Consolidating your federal student loans is also an option, however, you should consider the pros and cons of consolidation.

Request Short-Term Relief

If you are unable to find a repayment plan that works for you right now, you can request to temporarily pause or lower your payments through deferment or forbearance. Before making a request, use Loan Simulator to learn how it will affect your loan and loan payments. Remember that interest can still add up during deferment or forbearance.

Understand The Consequences of Not Repaying Your Loan

If you miss a payment, your loan becomes delinquent. After 270 days, your delinquent loan goes into default which results in severe consequences.

Student Loan Changes to Know

Loan Forgiveness Pathways Expanded
- Income-driven repayment plans can now limit monthly student loan bills at a set percentage of a student’s income and what they still owe after a set number of years gets forgiven
IDR Account Adjustment, or Waiver
- The Department of Education announced an IDR waiver known as the Public Service Loan Forgiveness (PSLF) that will allow millions of borrowers to come closer to student loan forgiveness
- Students will need to sign up for an IDR plan to keep building credit towards loan forgiveness
SAVE Repayment Plan Blocked by Federal Appeals Court
- Borrowers currently enrolled in the SAVE Plan will be placed in forbearance where they will not have to make student loan payments and no interest will accumulate.
- In the upcoming days, borrowers impacted by this court ruling will receive communication from either the U.S Department of Education (ED) or their loan servicers. They will be adding updates on the FAFSA website regarding the implications for borrowers.
Student Loan Servicer Switches
- The loan service companies that manage a student’s loan could change in the next few years
- New contracts are planned to go live in 2024, but legacy contracts will last through December 2024 to help smooth the transition
Other Key Student Loan Changes Underway
- Fresh Start program for borrowers with delinquent or defaulted loans
- Bankruptcy guidance that regulates the requirements for borrowers to discharge their student loans in bankruptcy
- Breaking up consolidated spousal loans
  - Congress passed the Joint Consolidation Loan Separation Act, which will allow borrowers who previously consolidated their student loans with a spouse to separate them and access debt relief programs, like Public Service Loan Forgiveness

SAVE Repayment Plan

The Saving on a Valuable Education (SAVE) Plan is an income-driven repayment plan. This is one of the newest income driven plans (IDR), and the most recommended for student loan borrowers. This IDR plan comes with a variety of benefits because it takes into consideration the loan borrower's income and family size. Although the SAVE repayment plan is one of the best repayment options, it is only available for certain loans. If you were previously on the REPAYE Plan, then you were automatically switched to the SAVE Plan.

Eligibility For SAVE Repayment Plan

Eligible	Eligible if Consolidated into a Direct Consolidation Loan	Ineligible
Direct Subsidized Loans	Subsidized Federal Stafford Loans (from the FFEL Program)	Direct PLUS Loans made to parents
Direct Unsubsidized Loans	Unsubsidized Federal Stafford Loans (from the FFEL Program)	Direct Consolidation Loans that repaid PLUS loans made to parents
Direct PLUS Loans made to graduate or professional students	FFEL PLUS Loans made to graduate or professional students	FFEL Program Loans (some types can become eligible if consolidated)
Direct Consolidation Loans that did not repay any PLUS loans made to parents	FFEL Consolidation Loans	Federal Perkins Loans (can become eligible if consolidated)
	Federal Perkins Loans	Any Loan that is currently in default

Important: On July 18, 2024, a Federal Court issued a stay preventing the Department of Education from operating the Saving on a Valuable Education (SAVE) Plan. If you are currently enrolled in SAVE, you will be placed into forbearance. During this period, borrowers will not have to make student loan payments and no interest will accumulate. This will not count as credit toward student loan forgiveness programs including Public Service Loan Forgiveness (PSLF) or other IDR programs.

Current Benefits for Participants in SAVE Repayment Plan

Increases income exemption from 150 percent to 225 percent.
Lowers payments for borrowers, as it considers borrowers’ income and family size, making it possible for students to pay ZERO dollars while enrolled in school.
Any income of $30,000 or below will be 0, or $60,000 for a family of four will be 0.
Interest gets paid first, followed by the principal.

Benefits that will go into effect July 2024:

Payments for undergraduate loans will be cut in half from 10% to 5%
Possible forgiveness on student loans, depending on whether you meet certain requirements and if you always paid your loans on time. Requirements include having an original balance of $12,000, which would result in forgiveness after ten years of payments. Undergraduate loans are capped at 20 years, and graduate loans are capped at 25 years.
Consolidating won’t erase forgiveness.
Automatically receive credit towards forgiveness of specific periods of deferment and forbearance
- Credit will include a period of deferment before July 1, 2024
- Credit for forbearance is only applicable for forbearance received on or after July 1, 2024
If borrowers are 75 days or more late on monthly payments, they are automatically enrolled in an IDR plan if they agree to allow the Office of Federal Student Aid (FSA) to access their tax information securely
- They will be enrolled in the IDR plan that gives them the lowest payment amount

How to Apply to SAVE

Log in to StudentAid.gov using your FSA ID. Look for the IDR application and enter information about yourself, including personal information and income information. Review your plan options. Based on your information, you will be able to see which IDR plan is best for you. Select the option for your loan servicer to place you on the lowest monthly payment plan, which is typically the SAVE Plan. Submit your application once you have picked the best plan for your situation.

Fresh Start

All defaulted borrowers temporarily have Fresh Start benefits through at least September 2024. But you must use Fresh Start to get out of default to keep these benefits long-term.

Fresh Start is a one-time, temporary program offered by the U.S. Department of Education (ED) that provides special benefits to borrowers with delinquent federal student loans. Some of these benefits include:

Access to federal student aid: You can apply for federal grants and loans again.
Eligibility for other government loans: Your default status will stop being reported to CAIVRS so you are eligible to apply for other loans, such as mortgages.
Stopped collections: Tax refunds and social security payments will not be withheld, wages will not be garnished and collection calls will end.
Restored ability to rehabilitate loans: Fresh Start won’t count as your one chance for rehabilitation so you have another opportunity to rehabilitate a loan.
Credit reporting changes: You can receive a status change that will prevent you from being negatively reported for delinquency.

Consequences of Not Repaying

A student’s loan becomes delinquent when they miss a payment. This can result in serious consequences after 90 days. If more than 270 days go by with no payment, the student’s loan goes into default, so the best option is to pay your loan on time. Consequences include:

Loan Acceleration

Your unpaid loan balance and any interest owed becomes immediately due.

Loss of Eligibility

You can no longer receive a deferment or forbearance and lose the ability to choose a repayment plan or receive additional federal student aid.

Credit Score

Your default status is reported to credit bureaus, which negatively impacts your credit score and affects your ability to buy a house or car.

Treasury Offset

Your federal benefits and tax refunds can be withheld and used to pay back your overdue debt.

Wage Garnishment

Your employer can be required to deduct a certain amount from your paycheck and send it to your loan holder to pay back your defaulted loan.

Additional fees

In addition to other charges related to the collection process, you can be charged court costs, collection fees, and attorney's fees.