Repayment of Federal Loans

Repayment of federal loans is a very serious obligation. There are a number of repayment options available to help borrowers to meet their obligations.

Remember, you are required to make your student loan payments even if you:

  • Do not complete your education
  • Are not employed upon completion of your studies
  • Do not find employment in your field of study
  • Feel that the education you received did not meet your expectations
  • Do not receive a bill

You must make your loan repayments on time or it may have serious consequences. It may:

  • Damage your credit rating, which could impact your ability to borrow
  • Refer your account to a collection agency
  • Incur collection costs
  • Cause garnishment of your wages
  • Cause withholding of your state or Federal treasury payments (including federal tax refunds, Social Security benefits, etc.)
  • Cause a civil lawsuit, including court costs and legal expenses
  • Cause loss of deferment and forbearance entitlements and flexible repayment options
  • Cause loss of eligibility for further financial aid
  • Suspend your professional license

Repayment options

There are a number of repayment options available. You should discuss them with your lender to determine which will be the best for you:

  • Standard Repayment
  • Graduated Repayment
  • Extended Repayment
  • Income-Based Repayment
  • Pay As You Earn Repayment (PAYE)
  • Revised Pay As You Earn Repayment (REPAYE)
  • Income-Contingent Repayment
  • Income-Sensitive Repayment

For full details see the Department of Education Repayment pages or American Student Assistance. You will always pay the least amount of interest under the Standard Repayment Plan.