Understanding Student Loan Repayment
Student Loans are a valuable resource for funding your education, so you need to be prepared to repay them when you have completed your degree, or are no longer enrolled at least half time in an accredited program. This webpage will provide you with information on the different types of loans, how to manage your loans, repaying your loans, loan consolidation & forgiveness, and other valuable resources to help make informed decisions for repaying your federal student loans. You can estimate what your loan repayment will look like by using the helpful calculator at studentloans.gov. Click here to watch a recorded version of our on campus Loan Repayment Workshop.
The following resources are available at our workshop:
Direct Stafford Loans-Loans from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of higher education.Direct Stafford Loans include the following types of loans:
Perkins Loans- A low-interest (5 percent) loan offered by OSU's financial aid office. OSU is your lender, and the loan is made with government funds. You must repay this loan to OSU. Repayment of Perkins loans is handled by OSU’s Student Accounts office. If you're attending school at least half time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment.
Parent PLUS Loans- PLUS loans are credit-based, available to Parents of dependent, undergraduate students, and require a separate application and MPN. The parent will repay the servicer listed on the disclosure statement provided when he or she received the loan. The loan servicer will provide regular updates on the status of the PLUS Loan, and any additional PLUS Loans that a parent receives. The loan servicer also will be listed in the parent's account on NSLDS. The Direct PLUS Loan Program for parents offers three repayment plans-standard, extended, and graduated-that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan. A PLUS Loan made to the parent cannot be transferred to the student. The parent is responsible for repaying the PLUS Loan.
Graduate PLUS Loans-GRAD PLUS loans are credit-based, available to Graduate students, and require a separate application and MPN. There are several repayment plans that are designed to meet the different needs of individual borrowers. Generally, you'll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose. You will receive more detailed information on your repayment options during entrance and exit counseling sessions.
Private Loans-funding through a private lending agency, these loans have a variable interest rate, and a credit check must be done on all applicants. Repayment options vary based on your loan terms. Check with your lender to see what your repayment options are. These loans cannot be consolidated with your federal student loans.
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. If you're not sure who your loan servicer is, you can look it up or call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913).
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:
More information about repayment, payment plans, interest rates, and loan forgiveness can be found on the Federal Student Aid website.
There are multiple repayment plans to suite your needs. To help you choose the plan that is right for you, take the time to review your options. This sample loan repayment schedule can help you get started.
Income Driven Repayment (IDR) - Income Driven Repayment plans are designed to make your student loan debt more affordable by reducing your monthly payments. Your payments under an income-driven repayment plan are usually a percentage of your discretionary income. That percentage varies depending on the plan. More information about IDR plans may be found at the Federal Student Loans website.
You have options! Always be sure to communicate with your federal loan servicer to avoid getting into trouble! Some of your options can include:
These options are not automatic. You must contact your loan servicer and submit the appropriate documentation for consideration!
Although student loans are not initially based on your credit score, your repayment history will be reported to credit agencies and can affect your score once you begin repaying your loans. If you do default on your student loans you may face the following:
Don’t let this happen to you! Be sure to keep your loans current & communicate with your lender if you are having trouble making payments!
A Direct Consolidation Loan allows a borrower to consolidate (combine) multiple federal student loans into one loan. The result is a single monthly payment instead of multiple monthly payments. More detailed information and advice is available on the Federal Student Aid website. Remember-this is an option, not a requirement. Always work with your federal loan servicer to determine the appropriate course of action that works for you.