Loans - Repayment
Your student loan is real money. You have to pay it back, so borrow wisely.
When you accept a loan, you accept legal and financial responsibilities that last until the loan is repaid. Loans must be repaid with interest, which begins to accrue when you:
- Receive your initial loan disbursement; or
- Complete a grace period following graduation; or
- Cease to be enrolled in school at least half-time.
Establish good credit by repaying your student loan. Paying your student loan on time affords you the chance to build a solid credit history that will help define the course of your life. On the other hand, defaulting on your loan(s) can have serious long-term consequences.
Check out Fast Web's Repaying Student Loans Quick Reference Guide.
After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment.
This "grace period" will be:
Six months for a Federal Stafford Loan (Direct Loan Program or Federal Family Education Loan (FFEL) Program).
PLUS Borrowers—The repayment period for all PLUS Loans begins on the date the loan is fully disbursed, and the first payment is due within 60 days of the final disbursement. However, a parent PLUS borrower (who is also a student) can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower during the deferment.
Parent PLUS Loan borrowers may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment.
Make Your Payments on Time
Your loan servicer will provide information about repayment and will notify you of the date loan repayment begins. It is very important that you make your full loan payment on time either monthly (which is usually when you'll pay) or according to your repayment schedule. If you don't, you could end up in default, which has serious consequences (see Default below). Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans.
Get Your Loan Information
The U.S. Department of Education's National Student Loan Data System (NSLDS) 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 NSLDS, go to www.nslds.ed.gov.
If you're not sure who your loan servicer is, you can look it up on www.nslds.ed.gov or call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913). To see a list of Federal Student Aid servicers for the Direct Loan Program and for FFEL Program Loans purchased by the U.S. Department of Education, go to the Loan Servicer page.
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. Go to Repayment Plans and Calculators for more information about the various repayment plans and to calculate your estimated repayment amount under each of the different plans.
If you have specific questions about repaying FFEL, Direct, or Perkins Loans, contact your loan servicer. In the case of Perkins Loans, your servicer will be the school that made the loan. If you don't know who your loan servicer is, go to www.nslds.ed.gov to find out.
Loan Interest Rates
Click here for information on interest rates for Direct and FFEL Program Loans.
Additional Interest Rate Information
- To access information on your federal loans including interest rates, go to www.nslds.ed.gov.
- For additional details on Direct Loan and FFEL interest rates effective July 2, 2012, click here.
Why does the amount of interest I pay vary from month to month?
Interest accrues on a daily basis on your loans. Factors such as the number of days between your last payment, the interest rate, and the amount of your loan balance determine the amount of interest that accrues each month.
You can calculate the monthly interest on your loan by using the Simple Daily Interest Formula.
Trouble Making Payments?
If you're having trouble making payments on your loans, contact your loan servicer as soon as possible. Your servicer will work with you to determine the best option for you.
- Changing repayment plans.
- Requesting a deferment—If you meet certain requirements, a deferment allows you to temporarily stop making payments on your loan.
- Requesting a forbearance—If you don't meet the eligibility requirements for a deferment but are temporarily unable to make your loan payments, then (in limited circumstances) a forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments.
If you stop making payments and don't get a deferment or forbearance, your loan could go into default, which has serious consequences.
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled. Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe.
Here are some consequences of default:
- National credit bureaus can be notified of your default, which will harm your credit rating, making it hard to buy a car or a house.
- You will be ineligible for additional federal student aid if you decide to return to school.
- Loan payments can be deducted from your paycheck.
- State and federal income tax refunds can be withheld and applied toward the amount you owe.
- You will have to pay late fees and collection costs on top of what you already owe.
- You can be sued.
For more information and to learn what actions to take if you default on your loans, see the Department of Education’s Default Resolution Group Web site.
Loan Cancellation (Discharge)
In certain circumstances, your loan can be cancelled/discharged.
Cancellation and Deferment Options for Teachers
If you're a teacher serving in a low-income or subject-matter shortage area, it may be possible for you to cancel or defer your student loans. Find out whether you qualify.
Loan Forgiveness for Public Service Employees
Under the Public Service Loan Forgiveness Program, if you are employed in a public service job, you may have the balance of your loans forgiven if you make 120 on-time monthly payments under certain repayment plans after October 1, 2007. You must be employed full-time in a public service job during the same period in which the qualifying payments are made and at the time that the cancellation is granted. The amount forgiven is the remaining outstanding balance of principal and accrued interest on eligible Direct Loans that are not in default. For additional details, go to the Public Service Loan Forgiveness page.
A Consolidation Loan allows you to combine your federal student loans into a single loan. Visit the Loan Consolidation page to see whether consolidation is right for you.
Responsibilities and Rights
When you accept a student loan, you agree to:
- Repay your loan(s) including accrued interest and fees, whether or not you complete your education, complete the program within the regular time frame, obtain employment or are satisfied with your education;
- Attend exit counseling before you leave school or drop below half-time enrollment;
- Notify the current holder of your loan within 10 days if you change your name, address or phone number, drop below half-time status, withdraw from school or transfer or change your graduation date;
- Direct all correspondence to the current holder or servicer of your loan;
- Make monthly payments on your loan after leaving school, unless you are granted a deferment or forbearance; and
- Notify the current holder of your loan of anything that might change your eligibility for an existing deferment.
As a student borrower, you have the right to:
- Receive a copy of your promissory note either before or at the time the loan is made;
- Receive a disclosure statement before repayment on your loan begins, including information about interest rates, fees, loan balance and the size and number of payments;
- A grace period after you leave school or drop below half-time enrollment and before your loan payments begins (if applicable);
- Prepay all or part of your loans without a prepayment penalty;
- Consolidate loans, if applicable;
- Apply for Loan Forgiveness, if eligible;
- Receive written notice if your loan is sold to a new holder;
- Apply for deferment of your loan payments for certain specified periods, as long as you're eligible;
- Request forbearance from the holder of your loan if you are unable to make payments and do not qualify for deferment (you must qualify according to the loan holder's requirements);
- Loan cancellation under certain circumstances; and
- Receive proof when your loan is paid in full.
Although every effort is made to provide the most accurate and up-to-date information, this content is subject to change due to alterations in federal, state, university or lender policy or procedure. The CPCC Financial Aid Office cannot be held liable for the consequences of such changes in policy or procedure. The most current information can be found by contacting your lender or servicer.