How Do I Know Who Services My Student Loans?
The Department of Education provides a tool you can use to track your federal student loan debt. The National Student Loan Data System (NSLDS) tracks all of your federal student loan debt (it does not include any Alternative (Private) Loans you may have borrowed). You will need to enter your social security number, the first two letters of your last name, your date of birth, and your FSA ID to access the system. NSLDS also shows your lender and who currently services each of your federal student loans.
Repaying Your Student Loans
Once you have either graduated, withdrawn, or dropped below half-time status, your student loan will enter a new status (depending on which loan type you have borrowed):
- If you have a Federal Stafford Loan, you will have a six month grace period before the loan goes into repayment. Your first payment will be due within 60 days of the end of your grace period.
- If you have a Federal Perkins Loan, you will have a nine month grace period before the loan goes into repayment. Your first payment will be due within 60 days of the end of your grace period. Visit the Perkins Loan Office website for more information about repaying your Federal Perkins Loan.
- If you have a Grad PLUS Loan, your loan will go into repayment within 60 days of your withdrawal date (there is no automatic grace period for PLUS loans, but you may request a deferment from your lender).
- If you have an Alternative (Private) Loan, you may have a six month grace period. Note that Alternative Loan products vary in their loan terms, so this just applies to most Alternative Loans. There are a few Alternative Loans that require interest only payments while you are in-school. Some Alternative Loans have a limit on how long you can remain in an in-school status, so read your loan paperwork carefully.
I’ve entered repayment. Now what?
Once you have entered repayment, you will start to receive monthly statements (bills) from your lender or servicer. With some lenders, you can sign up to receive these statements via email. Others will send you a paper statement or a payment book. It is important to note that statements from your lender or servicer are just a courtesy. If you don’t receive one, it does not excuse you from making your payment. It’s important to keep track of your loan status so you will know when your loans are due. Your lender wants you to pay on time, but it is your responsibility to do so. Remember that a negative credit score can impact your future housing choices, job prospects, and the ability to make other purchases with credit. It is crucial that you stay on top of your payment responsibility to protect your financial future.
With Federal Student Loans (and most Alternative Loans), you have some options regarding your payment plan. Here is an overview of the repayment plans that are usually available. Keep in mind that your student loans do not have a prepayment penalty, so no matter which plan you choose, you always have the right to pay extra! More information on each of these repayment plans is available on the Department of Education’s website.
- Standard Repayment: If you don’t request a different repayment plan, you will most likely be on this plan. For Federal Student Loans, the standard repayment plan is ten years of equal payments every month (your term may be shorter than ten years, depending on the amount you owe). This plan will cost you the least in terms of overall interest paid over the life of the loan.
- Graduated Repayment: On the Graduated Repayment Plan, your payments start off relatively low, then increase every two years.
- Extended Repayment: This plan has a fixed payment amount over the life of the loan, but the total repayment term is extended from 12 to 30 years (depending on your balance). Your payments will be smaller than on a standard repayment term, but you will end up paying more interest if your loan term is extended.
- Income Sensitive Repayment: Under the Income Sensitive Plan, your payments will be a certain percentage of your gross monthly income.
- Income Contingent Repayment: This plan is only available to Direct Loan borrowers. If your federal student loans are not Direct Loans (borrowed directly from the Department of Education, not from a private lender or bank), you have the option to consolidate into the Direct Loan Program to access this repayment plan. With this plan, your monthly payments are adjusted each year to be a certain percentage of your income. At the end of 25 years, if your loan has not been paid off by making monthly payments, any remaining balance will be written off (though it is considered taxable income).
- Income Based Repayment: This plan is only available for federal student loans that were first disbursed on or after 7/1/12. It is similar to the Income Contingent Repayment Plan, but it caps your monthly payments at a lower percentage of your income.
- Interest Only Repayment: This is not a true repayment plan, but some lenders offer it as a temporary solution for borrowers who are having trouble making their monthly payments. For up to six months, you may be able to request this plan. You would make payments that cover the interest that accrues each month. It is not a long term solution, but it can help you prevent your loans from increasing during times of financial difficulty.