Repaying your Student Loan

Borrowing student loans to finance your education is an investment in your future.  There are times when paying back your loans can be difficult.  These websites offer guidance as you attempt to repay your student loans.

Resources from NASFAA

Repayment Options

The Standard Repayment Plan breaks down your loan balance into monthly payments of at least $50 for up to 10 years. In general, this is the plan that will cost you the least amount of money in interest payments.

The Graduated Repayment Plan starts monthly interest payments at a lower amount, which gradually increase for up to 10 years. This plan is best for borrowers whose income may start out low but is expected to increase—but note that you will pay more in interest over time than if you selected Standard Repayment.

The Extended Repayment Plan allows borrowers to extend the repayment period from 10 years to up to 25 years; however, they will end up paying more in interest. This plan works best for borrowers whose loan burden is too large to bear the standard monthly payments over the course of just 10 years.

The Income-Based Repayment (IBR) Plan allows borrowers with a demonstrated financial hardship to limit their monthly loan payments, excluding parental PLUS loans, to 15 percent of their discretionary income (that is, the difference between their adjusted gross income and 150 percent of the poverty guideline for their individual situation).  Under this plan, if the balance of the loan has not yet been paid off after 25 years, it can be forgiven. In most cases, borrowers will pay more in interest over the life of the loan.  This plan is best for borrowers whose financial situation is unstable or is insufficient to bear the monthly payments under other repayment plans.

The Income-Contingent Repayment Plan takes into consideration annual income and family size as well as the total loan amounts. If a loan balance remains after 25 years, it may be forgiven. Unlike the IBR Plan, borrowers need not be facing financial hardship to qualify.  However, they will likely pay more in interest than in other repayment plans.  This plan is best for borrowers who are not facing demonstrated financial hardship, but whose financial situation is insufficient to bear the monthly payments under other repayment plans.

The Income-Sensitive Repayment Plan allows borrowers to pay a monthly loan amount that takes annual income into consideration. The length of the repayment period is up to 10 years, and the balance is not forgiven at the end. Like other plans, borrowers will pay more in interest over the life of the loan. This plan is best for borrowers whose financial situation may fluctuate over the course of the repayment period.

Who Will Be Sending You A Bill?: The Loan Summary Page will display all your federal Direct Stafford Loans loans that have been reported by every post-secondary school you have attended to the NSLDS system. You can get detailed loan information by clicking on the number link.

Please check this information for all your loans.  On March 25, 2010, the U.S. House of Representatives  and the U.S. Senate passed  The Health Care and Education  Affordability Reconciliation Act of 2010 (“HCEARA”-H.R. 4872)  mandates that, effective July 1, 2010, all federal student loans (Stafford, PLUS, and Grad PLUS)  will be originated through the Federal Direct Loan Program. The Family Federal Education Loan Program, which permitted private lenders to originate these loans, was eliminated effective June 30, 2010. Therefore, many of our students may have loans with different loan servicers. 

Know Your Repayment Options: The Repayment Options Page displays:

  • Sample repayment information for various debt amounts
  • Monthly and Total Payments under different Repayment Plans. Pay particular attention to information about the Income Based Repayment Plan and Public Service Loan Forgiveness.
  • Non-Consolidated and Consolidated Loan Payment Plan estimates.

Calculate Your Monthly Payments: The Estimating Payment Page features:

  • The option to change your loan balance due and recalculate your payments (if you are continuing on to graduate school )
  • Adjust your projected Federal Adjusted Gross Income (“AGI”), Marital Status, Family Size, Residence and recalculate your projected payments

Calculate a Budget: The Budget Calculator page assists borrowers in:

  • Developing a budget
  • Totaling monthly expenses
  • Comparing expenses to expected salary

Reference Page: References will only be contacted IF a borrower moves and fails to update his/ her address with the Department of Education. This information must be completed by the borrower. References have no legal liability for your loan. You will need to provide complete address information for three references (one should be your parents or another relative).

Borrowers will also be asked to provide the following optional information:

  • Employer
  • E-mail
  • Driver’s License Number and Driver’s License State

Review Your Rights and Responsibilities
If you see this page, you are done! (Note: the following is a page is a test sample and not information on a “real” student)

Loan Forgiveness
Student loans can be forgiven either in whole or in part.

The FSA Ombudsman works with federal student loan borrowers to resolve loan disputes or problems from an impartial, independent viewpoint. If you have a problem with a federal student loan that you have not been able to resolve through the normal process, contact the FSA Ombudsman at 877-557-2575 or http://studentaid.gov/repay-loans/disputes/prepare

Source: U.S. Department of Education
These repayment options only apply to federal loans. For private or alternative loans—nonfederal loans made by a lender such as a bank, credit union, state agency, or a school check with your lender about the repayment terms.

Private loans are not eligible for IBR or the other federal loan payment plans, deferments, forbearances, or forgiveness programs. However, the lender may offer some type of forbearance or payment relief. Read your private loan paperwork carefully and then talk to the lender about what repayment options they may offer.

For more information on planning and paying for college, visit the “Students, Parents, and Counselors” section of www.studentaid.org.

Visit DirectLoanInformation for information such as interest rates and calculators, repayment of loans, deferment and forbearance, cancellation and consolidation. For information about your specific loans visit www.myedaccount.com.

Online Debt Management Tool for Students

Use the Financial Awareness Counseling Tool, which provides students with financial management information, such as their current loan debt and estimates of debt levels when interest accrues after graduation. View interactive tutorials on topics including managing a budget and avoiding default. Students can also access their individual loan history and receive personalized feedback.

https://studentloans.gov/myDirectLoan/financialAwarenessCounselingLanding.action

Exit Counseling when you leave Sussex

Students who borrow loans and leave Sussex because of graduation, transfer or withdrawal must complete Student Loan Exit Counseling at the National student Loan Data System.

Exit Counseling Information

Step 1: Sign into www.studentloans.ed.gov

Students may complete an Exit Counseling session for the Federal Direct Stafford and submit completion information directly to the Department of Education.

  • The session integrates NSLDS data to provide borrower specific loan summary and estimated payments
  • Information can also be viewed in Spanish

Step 2: The Welcome Page includes options to tour the website or immediately start the counseling session. The “Progress Box” on the right will track your progress through the site.

Step 3: The login page will request your Social Security Number, Name, Date of Birth and Federal Student Aid PIN Number.

Step 4: Use the drop down menu and choose New Jersey and then Sussex County Community College.

Step 5: Complete several short quiz on major concepts concerning loan repayment. You MUST answer each question. The correct answers will be displayed after you hit the “submit” button.

Students who borrowed under the Federal Direct Stafford Loan Program must complete an Exit Loan Counseling session during their final semester. The U.S. Department of Education wants to insure that students review the terms of their loan and understand their rights and responsibilities under this program as they enter repayment.

This tutorial will walk you through some of the major sections of the NEW online exit counseling program at the National Student Loan Data System for Students (NSLSDS)