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:
Fixed Payment Repayment Plans
The fixed payment repayment plans include the Standard Repayment Plan, the Graduated Repayment Plan, and the Extended Repayment Plan. These plans base your monthly payment amount on how much you owe, your interest rate, and a fixed repayment time period. If you want to be placed on one of these plans, contact your loan servicer.
When you leave school, you will be automatically enrolled in the Standard Repayment Plan unless you pick a different repayment plan.
- Standard Repayment
- Graduated Repayment
- Extended Repayment
Income-Driven Repayment (IDR) Plans
IDR plans base your monthly payment amount on how much money you make and your family size. There are several IDR plans:
- Income-Based Repayment (IBR) Plan
- Income-Contingent Repayment (ICR) Plan
- Pay As You Earn (PAYE) Repayment Plan
- Saving on a Valuable Education (SAVE) Plan
After satisfying a certain number of months of qualifying payments on an IDR plan, you can get the remaining balance of your loan(s) forgiven.
Because payments are based on your income and family size, you must provide your loan servicer with updated income and family size information each year so that your servicer can recalculate your payment amount. This process is called recertification. You must recertify your plan even if there has been no change in your income or family size.
If you agree to the secure disclosure of your tax information, the US Department of Education and your loan servicer will automatically recertify your enrollment in IDR and adjust your monthly payment amount once a year. You’ll be notified when your payment is changing, and you’ll always be able to recertify your plan manually.
For full details see the Department of Education Repayment pages. You will always pay the least amount of interest under the Standard Repayment Plan.
Contact us
Student Funding Service
1st Floor, Student Centre
272 High Holborn
London WC1V 7EY
United Kingdom
funding@arts.ac.uk
+44 (0)20 7514 8080