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Repaying Your Loans

What you need to know about repaying student loans...

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 (FFEL) or Direct Stafford Loan.

  • nine months for Federal Perkins Loans

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 graduate student PLUS loan borrower (as well as 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.

Parent PLUS loan borrowers whose loans were first disbursed on or after July 1, 2008, 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 borrower.

Exit Counseling

You'll receive information about repayment, and your loan provider will notify you of the date loan repayment begins. We can't emphasize enough the importance of making 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 (scroll down to the Default discussion below). Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans. Find out about your obligations in this section so you can stay on top of your loans.

Get Your Loan Information

The U.S. Department of Education's National Student Loan Data System (NSLDS) allows you to access information on loan and/or federal grant amounts, your loan status (including outstanding balances), and disbursements made. Go to

Paying Back Your Loan

You have a choice of repayment plans if you received a FFEL or a Direct Loan. Federal Perkins Loans don't have repayment plan choices; you generally have up to 10 years to repay, however. Your monthly payment will depend on the size of your debt and the length of your repayment period. Funding Education Beyond High School: The Guide to Federal Student Aid explains available repayment options, includes examples of monthly payments for different loan amounts, and covers other topics you need to consider when managing your loans. You can see the entire publication here.

Click here to use our calculator to determine your repayment amounts under each of the different repayment plans.

Note to parents: Generally, Direct PLUS Loan borrowers can choose all but the Income Contingent Repayment Plan. FFEL PLUS Loan borrowers usually can choose from among all the FFEL repayment plans. See Funding Education Beyond High School: The Guide to Federal Student Aid and contact your loan holder for details.

Federal Family Education Loans (FFEL) and Federal Perkins Loans

After you've looked at Funding Education Beyond High School: The Guide to Federal Student Aid, if you have specific questions about repaying these types of loans, please contact your loan provider. (In the case of Perkins Loans, this will be the school that made you the loan). Don't know who your loan provider is? Go to to find out.

How can I calculate the amount of interest on my own?

To determine the amount of interest you will be required to pay on each month, use the following formula called the Simple Daily Interest formula:

Simple Daily Interest Formula
Number of days since last payment
Principal Balance Outstanding
Interest Rate Factor
Interest Amount

Practice Example: Let's say the remaining balance on your loan is $9500.00. You sent in a payment of $160.00, 32 days after your previous month's payment. Your interest rate is 8.25% (interest rate factor is .00022587).

32 (days) x $9500.00 (PBO) x .00022587 (interest rate factor)

You would pay $68.66 toward interest and $91.34 toward the principal balance. This would leave you with a loan balance of $9408.66 after the $160.00 payment was applied.

Interest Rate Factor

The interest rate factor is used to calculate the amount of interest that accrues on your loan. It is determined by dividing your loan's interest rate by 365.25 (the number of days in a year). See the following table to see some examples of interest rate factors.

Interest Rate Factor

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 how much will accrue on your loan by using the Simple Daily Interest Formula.

Direct Loan Servicing Online

If you have questions about your Direct Loan, you can go online to find the answers. With your PIN, you can view your detailed account information, complete exit counseling, make an online payment, enroll in any of our electronic services, and much more. For the payment address to send your Direct Loan payments, click here

Electronic Payment

In some cases, you might be able to reduce your interest rate if you sign up for electronic debiting. Find out more about electronic payment and debiting here.

Difficulty Repaying

If you don't repay your student loans on time or according to the terms of your promissory note, you might go into default, which will affect your credit rating. There is assistance for borrowers having difficulty repaying their education loans, including deferment and forbearance.

Loan Discharge (Cancellation)

In certain circumstances, your loan can be discharged/canceled. Read about cancellation provisions here.

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. Let us help you find out if you qualify.

Loan Forgiveness for Public Service Employees

There is a new loan forgiveness program for public service employees. Under this program, the amount forgiven is the remaining outstanding balance of principal and accrued interest on an eligible Direct Loan for a borrower who is not in default and who makes 120 monthly payments on the loan after October 1, 2007. The borrower 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.

Loan Consolidation

A Consolidation Loan allows you to combine all the federal student loans you received to finance your college education into a single loan. Read this section to help you decide whether consolidation is right for you.


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 would be ineligible for additional federal student aid if you decided 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.

Last updated/reviewed March 11, 2009

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