Student Loan Repayment
Federal Direct Loans offer students a six-month grace period after graduating, dropping below six credits of enrollment, or withdrawing before the loan enters into the repayment period.
The COVID-19 payment and interest accrual pause ended in September 2023. Legislation passed by Congress authorized repayment to restart in October 2023.
A new Income-Driven Repayment (IDR) Plan, SAVE, is now available and offers unique benefits that lower payments for many borrowers.
Whether entering repayment for the first time or restarting repayments after the COVID-19 payment pause, it’s important to take steps to prepare for student loan repayment and to understand your repayment options. Review the drop-down information below to learn more.
Loan Repayment Steps
1. Prepare for Successful Student Loan Repayment
Use your FSA ID to log in to StudentAid.gov. Use the same username and password you used to complete your FAFSA. Once logged in, review your personal information to make sure it’s current.
Confirm your student loan servicer. Your federal loans are assigned a loan servicer after your loan is disbursed to your school and credited to your university account. If you don’t know who your servicer is, log in to studentaid.gov and visit the ‘My Loan Servicers’ section of your dashboard or call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
Your loan servicer will provide you with free assistance; you should never pay an outside entity to help with your student loans.
Stay alert to avoid scams. While you may reach your loan servicer by phone, your servicer will always initiate communications with you by email. Unless you initiate the contact, you should never share personal information over the phone.
Set up or reauthorize auto debit for monthly payments. If you previously signed up for automatic debit before the payment pause began, you must reauthorize your automatic debit through your loan servicer account. This will allow your loan payments to be automatically withdrawn from your bank account every month.
Review payment due date and amount. Make note of your monthly payment amount and the due date of your first payment. If necessary, update your banking information. Be sure to proactively schedule a payment by the deadline or be prepared for the funds to be drawn by auto debit.
2. Research repayment options and choose the best plan for you
When you complete loan exit counseling, you’ll select a plan to repay your student loan. If you don’t choose a repayment plan, your loan servicer will automatically place you in the Standard Repayment Plan. If this happens to you, consider your repayment strategy and decide whether you need to change plans.
The standard repayment plan is solely based on the amount you borrowed and divides your balance (plus interest) into equal, fixed monthly payments.
Income-driven repayment (IDR) plans, consider yourstudent income. In many cases, an IDR plan will provide you with a lower monthly payment.
The Saving on a Valuable Education (SAVE) Plan is the newest income-driven repayment (IDR) plan. The SAVE plan calculates monthly payment amount based on income and family size.
The SAVE Plan lowers payments for almost all borrowers compared to other IDR plans because payments are based on a smaller portion of the borrower’s adjusted gross income (AGI).
More elements of SAVE will go into effect in the summer of 2024 which will lower payments even more for borrowers with undergraduate loans.
Once you select your plan, make the change in your servicer portal or studentaid.gov. If you need help selecting a plan or completing the process, contact your loan servicer.
With millions of borrowers transitioning into repayment at the same time, loan servicers will likely be overwhelmed by the high volume of inquiries. You may need to call your servicer a few times before being connected. Consider checking your servicer’s website for information, using their live chat feature, or submitting your inquiry by email.
3. Avoid Delinquency — Make On-Time Payments
If You Forget to Pay Your Bill
If you do not make your student loan payment by the due date, you’ll have a past-due or delinquent account. If your account is delinquent for 90 days, your failure to pay will be reported to the three national consumer reporting companies. This reporting can damage your credit score.
What to Do If You Cannot Afford Your Payment
Do not allow your account to fall into delinquency or eventually into default. Contact your loan servicer to discuss your options as soon as you know that you cannot pay the amount due. You may be able to defer your payments, enter into forbearance, or change your payment plan so that your monthly payment is lower.
Learn more about delinquency and default from Studentaid.gov.
4. Seek Loan Forgiveness Opportunities
You may be eligible for Public Service Loan Forgiveness (which is a type of debt cancellation) if you’re in a public service profession like non-profit work, healthcare, public education, and more. Review the types of loan forgiveness opportunities on studentaid.gov.
5. Consider Loan Consolidation to Lower Your Interest Rate
If you have multiple student loans with different interest rates, consider consolidating (combining) your loans into a new Direct Consolidation Loan. This can help lower your monthly payments or gain access to federal forgiveness programs.
There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan.Learn more about the benefits of consolidating and how to apply on studentaid.gov.
Federal Student Aid
Get more information at the U.S. Department of Education's Federal Student Aid website