The Center For Debt Management
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Student Loan Repayment Information

What You Need To Know
About Repaying Student Loans

After you graduate, drop below half-time enrollment, or leave school, you have a period of time before you have to begin to repay your student loans. This “grace period” will be

  • Six months for a Federal Stafford Loan(FFEL or Direct).

  • Nine months for Federal Perkins Loans

The repayment period for all PLUS loans begins on the date the loan is fully disbursed, and the first payment is due within 60 days of the final disbursement. However, a graduate student PLUS loan borrower (as well as a parent PLUS borrower who is also a student) can defer repayment while the borrower is enrolled at least half time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower.

Parent PLUS loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the borrower.

Exit Counseling

You'll receive information about repayment, and your loan provider will notify you of the date loan repayment begins. We can't emphasize enough the importance of making your full loan payment on time either monthly (which is usually when you'll pay) or according to your repayment schedule. If you don't, you could end up in default, which has serious consequences (scroll down to the Default discussion below). Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans. Find out about your obligations in this section so you can stay on top of your loans.

Get Your Loan Information

The U.S. Department of Education's National Student Loan Data System (NSLDS) allows you to access information on loan and/or federal grant amounts, your loan status (including outstanding balances), and disbursements made.

Paying Back Your Loan(s)

You have a choice of repayment plans. How much you pay and how long you take to repay your loans will vary depending on the repayment plan you choose. There are several repayment plans available: Standard, Extended, Graduated, Income Based Repayment (IBR), Income Contingent Repayment (ICR) (available to borrowers with Direct Loans), and Income-Sensitive Repayment (available to borrowers with FFEL Loans).

How can I calculate
the amount of interest on my own?

To determine the amount of interest you will be required to pay each month, use the following formula called the Simple Daily Interest formula:

Simple Daily Interest Formula
Number of days since last payment
x
Principal Balance Outstanding
x
Interest Rate Factor
=
Interest Amount

Practice Example: Let's say the remaining balance on your loan is $9,500.00. You sent in a payment of $160.00, 32 days after your previous month's payment. Your interest rate is 8.25% (interest rate factor is .00022587).

32 (days) x $9,500.00 (PBO) x .00022587 (interest rate factor)

You would pay $68.66 toward interest and $91.34 toward the principal balance. This would leave you with a loan balance of $9,408.66 after the $160.00 payment was applied.

Interest Rate Factor

The interest rate factor is used to calculate the amount of interest that accrues on your loan. It is determined by dividing your loan's interest rate by 365.25 (the number of days in a year). See the following table to see some examples of interest rate factors.

Interest
Rate
Converted
to Decimals
Divide
by
365.25
Interest
Rate Factor
8.99% .0899 .0899/
365.25
.00024613
8.25% .0825 .0825/
365.25
.00022587
7.59% .0759 .0759/
365.25
.00020780

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