Frequently Asked Questions

Top Five

• I'm about to enter repayment, and I received a letter about my payment. I know I can't afford that much every month. Is there a way to lower the payments?
• I've never heard of forbearance before. Does having a forbearance affect my credit in a negative manner?
• How will I know when my first payment is due?
• My loans are in default, but I want to go back to school. What do I do?
• How can I contact you?

About Repayment

• If I consolidate my student loans and later decide to go back to school, will I be required to continue making payments?
• How can I lower my interest rate?
• What is the normal timeframe for loans to be repaid?
• Is there a way to decrease my monthly payment or anything I can use to put my repayment on hold?
• What happens if my loans are in repayment and I am deployed by the military?
• What is a grace period?
• What other ways can I make my payments?

When You're About to Graduate

• How long is the grace period after you leave college before I must start paying back my student loans?
• Do I have to pay back my loan right away?

For Parents

• What is a Parent PLUS loan?
• Will my Parent PLUS loan enter payment before my child is out of college?
• What other financial aid options exist if a Stafford Loan won't cover the full cost of my child's education?

Q: I'm about to enter repayment, and I received a letter about my payment, but I know I can't afford that much every month. Is there a way to lower the payments?
A: It may be possible to consolidate your loans to lower your monthly payments. There are also several repayment options available to help borrowers afford their monthly payments, including:

• Graduated Repayment
• Income Sensitive
• Income-based Repayment
• Level Repayment

To learn more about these repayment options, contact your lender or servicer.

Q: I've never heard of forbearance before. Does having forbearance affect my credit in a negative manner?
A: Actually, placing your account on forbearance will assist in protecting your credit by preventing your loan from being reported to the credit agencies as delinquent. Be careful not to use your forbearance needlessly though as you only are allowed so much time throughout the repayment of your loan.

Q: How will I know when my first payment is due?
A: You should receive a repayment obligation and billing statement approximately one month prior to your first payment being due.

Q: My loans are in default, but I want to go back to school. What do I do?
A: To receive additional financial aid you must first remove your loans from a defaulted status. There are several ways to accomplish this goal. The quickest way to remove your loans from a defaulted status would be to pay the loan in full. If you are unable to satisfy your debt at this time you may want to consider either consolidation or the Defaulted Loan Rehabilitation Program. The Rehabilitation Program consists of making a minimum of nine on-time payments of your billed amount during a period of ten consecutive monthly payments. You can contact a representative at 1-800-233-0751 should you have further questions.

Q: How can I contact you?

For AES-serviced loans:

For FedLoan Servicing loans:

Contact FedLoan Servicing at www.myfedloan.org/about/contact.shtml.

For loans with other servicers:

Please contact your servicer for specifics on their default prevention assistance. (The name of your loan servicer is on your bill.)

Q: If I consolidate my student loans and later decide to go back to school, will I be required to continue making payments?
A: You may defer your student loan payments at any time while you are enrolled in school, be it half-time or full-time. If you are enrolled less than half-time, your lender/servicer may have a school forbearance available to postpone repayment. However, when your account is on a forbearance, it continues to accrue interest that you are responsible to pay. Whereas when you are in deferment, the government will pay the interest on the subsidized portion of your loans.

Q: How can I lower my interest rate?
A: You can contact your lender/servicer to determine if your loans are eligible for a Reduced Interest Rate program. With these programs, your interest rate can be reduced after a set number of timely payments have been remitted. Your lender or servicer may also offer a reduction in the interest rate for participating with an electronic fund transfer service to repay your loans. You may also be able to lower your interest rate by consolidating your individual loans.

Q: What is the normal timeframe for loans to be repaid?
A: You generally have 10 years to repay your loans. The minimum monthly payment is always at least $50.00.

Q: Is there a way to decrease my monthly payment or anything I can use to put my repayment on hold?
A: Contact your lender or servicer immediately. You may be eligible for a deferment or forbearance. Also, checkout our section on "What to do if you can't pay."

Q: What happens if my loans are into repayment and I am deployed by the military?
A: You may be eligible for military deferment or military mobilization forbearance. Contact your lender or servicer for more information.

Q: What is a grace period?
A: A grace period is the initial six months after a student leaves school in which they are not yet responsible to make payments on their loan.

Q: What other ways can I make my payments?
A: You may apply to have your payments automatically deducted from your checking or savings account each month. Or you can make your monthly payments online or by telephone. Contact your servicer to see what payment methods they offer.

Q: How long is the grace period after you leave college to start paying back any student loans?
A: The grace period is six months.

Q: Do I have to pay back my loan right away?
A: Your loan will remain in deferment as long as you are enrolled at least half-time. You will begin repaying your loan six months after you graduate, withdraw, or fall below half-time enrollment.

Q: What is a Parent PLUS loan?
A: A Parent PLUS loan is a parent loan for an undergraduate dependent student. The school determines the amount you are available to receive. You start repaying the loan 60 days after the full amount of the loan is disbursed. As a Parent PLUS Borrower you may be eligible to receive a 1% interest rate reduction after 24 consecutive, on-time payments and another 1% interest rate reduction after 24 additional consecutive, on-time payments.

Q: Will my Parent PLUS loan enter repayment before my child is out of college?
A: Parent PLUS loans are disbursed each semester and repayment begins 60 days after the last disbursement. However, your payments may be eligible to be deferred while your child is enrolled on at least a half time basis.

Q: What other financial aid options exist if a Stafford Loan won't cover the full cost of my child's education?
A: Federal Pell Grants, as well as State Grants, are options and can be applied for by completing the FAFSA. You can also look into scholarships and work study programs. Alternative loans are also a resource for students to obtain additional funds needed to cover the cost of education.