Frequently Asked Questions

How long does it take to repay student loans?

The standard repayment schedule for federal student loans is 120 months (ten years). This is referred to as the standard repayment plan.  Some students, or former students, may be eligible for some of the many government authorized repayment plans designed specifically to help students struggling with their student loan debt.    

What is student loan deferment?

Under certain situations, you may be eligible for a deferment of your federal student loans. Some of the great benefits of your student loan deferment program is by postponing your loans, it may help you avoid default. Some of the qualification criteria includes returning to school, economic hardship, or unemployment.

What is student loan forbearance?

Under certain circumstances, you could be eligible for a forbearance on your student loan. If your loan holder approves forbearance, you can stop making payments for a specific period of time. Some of the most common reasons for forbearance include, but are not limited to, financial hardship, illness, your student loan payments exceed 20% of your gross income.

How are payment amounts for Income Based Repayment Plans and Pay As You Earn (PAYE) plans determined?

Your monthly payments will be determined by the number of dependents you have and your income. It is not based on an interest rate. Also, your payments will be capped at between 10% - 15% of your discretionary income. This varies, based on the plan.

What can happen to you if you default on your federal student loans?

The IRS has many powerful tools they can use if you default on your student loans. They include intercepting your tax refunds and garnishing your wages. This is a serious matter. The government can even keep your Social Security benefits.  

What is the Pay as You Earn (PAYE) program?

If you qualify for the PAYE program, your monthly payments will be capped at 10% of your discretionary income. If you make 240 payments, generally your unpaid student loan balance will be forgiven. To qualify, you must have taken out your federal student loan after October 1, 2007. Additionally, to qualify, you must have taken out a Federal Direct Loan or Direct Consolidation loan some time after October 1, 2011.

What is a Graduated Repayment Plan?

A graduated repayment plan begins with low monthly payments. Your payment amount will increase every two years. Generally, the maximum repayment period will be up to ten years. And, your monthly payment will never less than your monthly interest.  Your maximum payment will never exceed three times your lowest payment amount.