Exit counseling

Exit counseling

Exit Counseling is required when you graduate, leave school, or drop below half-time enrollment. It provides you with important information you need to prepare to repay your federal student loan.

Repayment of your loans

Grace Period

The grace period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. The grace period gives you time to get financially settled and to select your repayment plan. Note that for most loans, interest will accumulate during your grace period.

Deferment or Forbearance

A deferment is a period during which repayment of the principal and interest of your loan is temporarily delayed.

During a deferment, you do not need to make payments. The government may also pay the interest on your Subsidized Loan but will not pay the interest on your Unsubsidized or PLUS loans. You are responsible for paying the interest that accumulates during the deferment period, but your payment is not due during that time.

If you can’t make your scheduled loan payments, but don’t qualify for a deferment, your loan servicer may be able to grant you a forbearance. You may then be able to stop making payments or reduce your monthly payment for up to 12 months but interest will continue to accumulate on your Subsidized, Unsubsidized and PLUS Loans.

Repayment Plans

You can change repayment plans at any time (for free).

Contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan. Get an early look at which plans you may be eligible for and see estimates for how much you would pay monthly and overall:

Default

To default means you failed to make your payments on your student loan as scheduled according to the terms of your Master Promissory Note (MPN), the binding legal document you signed at the time you took out your loan.

The consequences of default can be severe. For example:

  • The entire unpaid balance of your loan and any interest is immediately due and payable.
  • You lose eligibility for additional federal student aid.
  • The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.

A better option could be a Direct Consolidation Loan that allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments.