Make a plan to repay your loans, know your options and don't be afraid to ask your loan servicer about deferment or forbearance options if you can't make your loan payments.
|Estimate your payments||Repayment plans|
|Repayment options||Loan consolidation|
Before you graduate
Complete required Federal Loan Exit Counseling
Review your federal loans and your loan servicers
Loan repayment assistance
- Help for borrowers having trouble repaying loans
- Income-based repayment and loan forgiveness
- Loan repayment information — Student Aid on the Web
- Student debt repayment assistance
- Avoid loan default
How to manage your student loans
Sample loan repayment schedule
|Loan||Amount borrowed||Interest Rate||Standard Repayment Term||Interest||Total paid|
|Federal Direct Subsidized Loan (Undergraduate)||$5,500||4.5%||120 months ($57/month)||$1,340.13||$6,840.13|
|Federal Direct Unsubsidized Loan||$5,500||6.8%||120 months ($63.29/month)||$2,095.30||$7,595.30|
|Federal Direct PLUS Loan||$10,000||7.9%||120 months ($120.80/month)||$4,495.98||$14,495.98 |
Beware of companies that promise "Debt Relief"
Companies that promise student loan borrowers loan cancellation, forgiveness, credit repair, or dramatically lowered payments usually charge fees for services that federal loan servicers offer free of charge. Signals to watch for to avoid being taken advantage of include:
- You are asked to pay high fees in advance;
- Your request for a company name, mailing address or phone number is refused;
- You are pressured to make a decision immediately; or,
- You are asked to sign paperwork giving the third-party company "Power of Attorney" or legal authority to negotiate on your behalf, and you are told not to contact your servicer after you complete the paperwork.
Precautions to take for protection from being taken advantage of include:
- Contact your loan servicer. Contact your student loan servicer if you have questions about your loans or want assistance to review your repayment plan options.
- Do not pay for what is available for free. There are no fees to enroll in Income-Based Repayment, Pay As You Earn or other repayment options based on your income.
- Protect your personal information. Do not share personal financial or sensitive information about your federal student aid such as your Federal Student Aid ID.
Loan repayment forgiveness programs
Income-Based Repayment (IBR) Plan
This repayment plan limits your loan payments based on your income, family size and total loan debt. After 25 years of qualifying payments, all remaining debt will be forgiven. More information and a calculator to estimate your eligibility is available at www.IBRinfo.org.
The Federal Public Service Loan Forgiveness Program
Public sector employees may be eligible to have Federal Direct Loans forgiven after 120 monthly payments.
- You must be employed full time in public service during the 120-month period and at the time of forgiveness.
- Eligible employers include the federal, state, local government and those that are tax-exempt under section 501(c)(3) of the IRS code.
- Qualifying payments must be made under the Income-Contingent, Standard or Income-based repayment plans.
- The U.S. Department of Education has a form for borrowers to use to collect certification from the employer.
Federal Perkins loan cancellation
- Under certain conditions, a Federal Perkins Loan that is not in default can qualify for cancellation. A summary of the cancellation conditions is provided in The Student Guide.
- Only the school that grants the Federal Perkins Loan can determine if the borrower is entitled to have any portion of the loan canceled.
If you borrowed a Federal Perkins Loan while enrolled at Wayne State University, questions concerning cancellation should be directed to:
Office of Student Accounts Receivables
Wayne State University Welcome Center, 4th Floor, 42 West Warren Avenue
Detroit, Michigan 48202
Perkins Loan cancellation for public service or law enforcement
Full-time employees of an eligible public or private nonprofit service agency may be eligible for partial or full Perkins Loan cancellation after a period of service.
Note: If you consolidate your Perkins Loans, you will not be eligible for this program.
- The borrower of a Perkins Loan is eligible to have up to 100 percent of the loan canceled for full-time service as a qualifying law enforcement or corrections officer or public defender.
Cancellation rate per completed year of employment:
- 15 percent of the principal for each of the first and second years
- 20 percent of the principal for each of the third and fourth years
- 30 percent of the principal for the fifth year
Note: A cancellation period consists of a full year of employment.
Loan forgiveness for service in areas of national need
For each year of full-time employment in an area of national need, up to $2,000 of your outstanding student loan balance may be forgiven.
- No more than $10,000 will be forgiven up to a maximum of five years.
- This includes work in public service in low-income communities at a nonprofit organization.
Note: This program is subject to annual appropriations approved by the U.S. Congress.
Some federal agencies and private employers may also offer loan repayment programs as a recruiting tool.
- See the U.S. Office of Personnel Management website or check with your employer.