Manage Your Loan Payments

Where to Go for Help

If you have questions concerning the repayment of your student loan(s) or need help managing your loan payments, contact the holder of your loan(s) or contact EAC.

We'll be happy to provide information, explain your options, or direct you to the agency that can best meet your needs.

Repayment Plan Options

Different repayment plans have been developed to make sure you can afford your student loan payment. Contact your lender to sign up for the plan that's right for you.

Standard Repayment Plan
Unless you request a different plan, you will automatically be on the Standard (or Fixed) Repayment Plan at the end of your grace period. You will pay the same amount each month for up to ten years. The amount of your payment is based on the amount you borrowed, with a $50 minimum payment.

Graduated Repayment Plan
With the Graduated Repayment Plan, your payments begin lower and rise over time. The term for this repayment plan will be ten years or less. If you choose this option, keep in mind that lower payments mean you will pay more interest over the life of the loan than if you use the Standard Repayment Plan.

Extended Repayment Plan
If you owe at least $30,000 in student loans that were disbursed after October 7, 1998, you may be eligible for Extended Repayment. This plan allows for a term of up to 25 years. This plan will require you to pay more interest over the life of your loan.

Income-Sensitive Repayment Plan
The income-sensitive repayment plan bases your monthly payments on your gross monthly income. The amount of your payment may change annually as your income changes. If the income-sensitive plan lowers your payment, you will pay more interest over the life of the loan.

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Deferment

Deferment is a period during which you can postpone payments on your student loan. The federal government will even pay the interest for you on subsidized Stafford loans during periods of deferment.

The kinds of deferments you may be eligible for depend on when your first loan was disbursed and the type of loan that you borrowed. If you are unsure, view your loans online here.

Your first loan was disbursed between 7/1/93 and 6/30/01.

Your first loan was disbursed between 7/1/87 and 6/30/93.

Your first loan was disbursed prior to 7/1/87.

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Forbearance

Forbearance is a period during which your loan holder postpones the principal payments on your loan, but the interest continues to accrue.

Qualifying for Forbearance
Forbearance is designed for borrowers with financial hardship that do not qualify for a deferment.

More Information
Contact your loan holder for more information on forbearance.

FFEL Consolidation Loan

A Federal Family Education Loan Program (FFELP) Consolidation Loan is designed to help student and parent borrowers consolidate several types of federal student loans with various repayment schedules into one loan. When eligible loans are consolidated, repayment periods may be extended and total monthly payments may be lower. However, due to the extended repayment period, the total amount that you will pay over the life of the loan is increased. With a FFELP Consolidation Loan, you'll make only one payment a month.

Consider Before Consolidating

• Interest Rate
  • The interest rate for your FFELP Consolidation Loan is the weighted average of the current interest rates of the loans that are consolidated, rounded up to the nearest 1/8 of 1%, not to exceed 8.25%. The interest rate will not be variable, but remains fixed for the life of the loan.
    • Fixed Rate Loans - If your interest rates are currently fixed, you can choose to consolidate at any time during your grace or repayment period. Keep in mind that, due to rounding up to the nearest 1/8 of 1%, your new interest rate will be higher than your current rate.
    • Variable Rate Loans - If you have variable rate loans, you may wish to wait to see if rates may lower before consolidating your loans. While there are no guarantees, interest rates are expected to drop significantly July 1, 2008.
  • The federal government will pay the interest that accrues during periods of deferment on the portion of the consolidation loan that consists of subsidized loans.
  • If any of your Stafford loans carry variable interest rates, you may wish to take advantage of the lower rates offered during grace and approved deferment periods by requesting your consolidation at that time.

• Other Options

  If you are considering consolidation as a way to lower your payment, you may wish to ask your lender about the availability of these alternate options:

  • Automatic Payments - Some lenders offer discounts if you sign up for payments automatically withdrawn from your checking or savings account.
  • Switching Repayment Plans – You may be eligible for a different repayment plan such as graduated, income-sensitive, or extended. More information on repayment plans is available here.
  If you are having trouble making your payment, ask your lender about options such as deferment and forbearance.

• Deferment, Cancellation, and Forgiveness Provisions You May Lose

Be aware that by consolidating your student loans, you may lose:

• Some of your options for deferment.
• Eligibility for certain cancellation and forgiveness programs, particularly if you choose to consolidate any Perkins loans.
• Increased interest costs

It is important to understand that any time that you extend your repayment period, whether through consolidation, choosing a different repayment plan, or by obtaining a deferment or forbearance, you will pay more in interest charges over the life of the loan.

Think about all of these issues carefully before you decide to consolidate. Your lender can help you make the decision that's right for you.

Choosing a Consolidation Lender
Contact your lender directly to:

• Learn more about the consolidation program, including availability, loan terms, and repayment incentives
• Apply for your consolidation loan

Understanding Consolidation Loan Requirements
You can consolidate any eligible loans that have entered repayment or that are in a grace period. If any loan you want to consolidate is in default, you must make satisfactory repayment arrangements on that loan before it can be included in the consolidation.

Knowing the Types of Loans That Can Be Consolidated Under a FFELP Consolidation Loan:
As the borrower, you can choose to have any of the following loan types included in a consolidation loan:

• Subsidized and Unsubsidized Federal Stafford Loans
• Federal PLUS Loans (as the borrower)
• Federal Perkins Loans
• Federal Supplemental Loans for Students (SLS)
• Health Professions Student Loans (HPSL), including Loans for Disadvantaged Students (LDS)
• Health Education Assistance Loans (HEAL)
• Nursing Student Loans (NSL)
• Federal Insured Student Loans (FISL)
• Direct Subsidized and Unsubsidized Loans
• Direct PLUS Loans
• Federal Consolidation Loans

To view your loans with EAC, log in now. To locate other student loans, visit Mapping Your Future's Loan Locator page at http://mappingyourfuture.org/paying/locatingloans.htm.

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Tips for Successful Repayment

Get in touch with your lender to:

• Get repayment information if you have not received it during your grace period.
• Check out repayment plan options. Find one that will fit your means.
• Ask about repayment incentives that could save you money.
• Sign up for automatic payments from your checking or savings account.
• Explore available options if you are not able to make a payment.
• Report changes in your mailing address or phone number.

Learn how to manage your money at http://mappingyourfuture.org/money/ .

Establish a budget and stick to it. It's much easier to make that student loan payment on time when you have a plan that puts you in control of your finances.

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Spending Plans

Setting a spending plan, or a budget, is a great way to keep track of what you've spent and make sure you'll have enough money to cover your expenses in the future. What's most important is that you're in control of your finances.

So how do you make a budget that's going to work? Here are some tips:

Keep it simple
A budget shouldn't be so complicated that you don't understand it or don't want to use it. Begin with many categories and combine them as you become more experienced. For example, you may want to begin by keeping track of groceries, snacks, and eating out as separate categories. However, you may be able to combine these into a general food category once you have a good idea of how much you'll need to spend.

Be realistic
Keep your budget realistic or you'll have a tough time sticking to it. Do your best to eliminate excessive spending, but if you realize you'll never cut a certain luxury (for example, you just can't give up Friday night movie rentals), plan on spending that amount. Instead, cut spending from another area you don't care about as much, like eating out or clothing.

Analyze your spending
Look at each expenditure and think about these questions:

• Was this a need ? If so, could it have been purchased for less? Could you plan ahead and stock up when it is on sale? Is there a generic version? Could you buy this second-hand to save money?
  
• Was this a want ? If so, why did you buy it? Beware of shopping as a form of entertainment and don't fall into the trap of trying to keep up with your friends.

Make informed spending choices
Before making a purchase, check out your budget. Can you afford it? Do you really need it? Can it wait another month? Don't buy things if you don't have the money to pay for them. Plan ahead to make sure you have the money to pay for what you need.

Evaluate your income
The purpose of budgeting is to fit your spending to your income, to live within (perhaps even below) your means. If you've adjusted your spending as much as you feel you can and it's still not working, then you have to increase your income. Think about getting a second or better-paying job to help you make ends meet.

Reward yourself
You've worked hard, pinched pennies, and made your budget work for you. Way to go! Now how to reward yourself? Instead of spending money, relax, spend time with friends, or take a walk. Think about how great it feels to be in control of your finances.

Are you ready to budget? Visit our Monthly Income and Expense Worksheet .

Consequences of Default

It is very important that you make your student loan payments on time. Missing payments can seriously damage your credit.

Default
Default can occur when you fail to make student loan payments. Don't let default happen to you! It will significantly and adversely affect your credit.

Default may result in:

• Damage to your credit rating
• Wage garnishment
• Legal action
• Court costs and other legal expenses
• Collection costs
• Loss of deferment eligibility
• Referral of your account to a collection agency
• Withholding of your income tax refund

Avoiding Default

• Make every student loan payment on time.
• Notify your loan holder of any changes to your:
  • Name
  • Address
  • Phone number
  • Social Security Number
  • Enrollment status
• Contact your loan holder as soon as possible if you're having problems making your payments. They can help you explore your options for deferment, forbearance, consolidation, or different repayment options.
  

Ombudsman

If you have a student loan dispute or a problem that you can't resolve with your school or lender, you may contact Ellen Welke, Ombudsman for Education Assistance Corporation, at 1-800-592-1802, ext. 4340. If you have a dispute or problem that you can't resolve with EAC or another guarantor, you may contact the Student Financial Aid Ombudsman's Office at 1-877-557-2575.

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