Many students use financial aid to help cover the expenses of going to college. It is important to know that only your student loans have to be repaid; your grants and scholarships are treated like gifts you never have to return.It is very important that students understand WHO they owe, WHAT they owe, and WHEN the payments are due. Many students often are confused about how to access all of this information. Use this page as a reference throughout your repayment!
WHO is Servicing My Loans?
The first thing you need to do is make sure you know WHO is servicing YOUR loans. You can check any of these sites to find out (Use the same login you use for the FAFSA, the FSA User ID and Password):
Studentloans.gov – View information on your loans, apply for Income-driven repayment plans, apply for loan consolidation, and check the statuses of any ongoing applications. Login with your FSA User ID and Password.
Studentaid.ed.gov – Get information on who is servicing your loans, as well as information on loan repayment, types of aid, tips on preparing for college, and an expansive glossary of key terminology. Login with your FSA User ID and Password.
NSLDS – View your federal loans, grants, and aid overpayments. Current enrollment status, exit counseling, FAQ’s, and other information is also provided. Login with your FSA User ID and Password.
WHEN Do I Need to Make Payments?
It is important to know WHEN you will be responsible for making payments on your student loan. After you drop below 6 credit hours, whether it is through graduation OR dropping classes, you will have a six month grace period where you will not be expected to make a payment. Once you have gone six consecutive months below 6 credit hours, you are in repayment! If you enroll again in six credit hours in the future, and have already used up your grace period, you will be in repayment again once you drop below half time. You will not get another grace period. Create an online account with your loan servicer so you can stay up to date with important information.
How to Make a Payment
Your loan servicer handles all the billing regarding your student loan, so your payments will be made directly to them. Refer to “Who is servicing your loans” to determine who your loan servicer is. Visit their site to make a payment. You WILL NOT make these payments to GTCC, we are here to connect you to the servicer of your loans during your repayment. Create a login for your loan servicer’s website so you can stay up to date!
Finding the Repayment Plan That is Right for You
There are several repayment plans available to student loan borrowers. If you don’t choose a plan, then you will be automatically enrolled in the standard repayment plan, which will have your loan entirely paid off in 10 years. This is the best plan for paying off your loans with the least amount of interest accrued. However many students are looking into other repayment options, such as Income-Driven repayment.
An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. There are four income-driven repayment plans:
Revised Pay As You Earn Repayment Plan (REPAYE Plan)
Pay As You Earn Repayment Plan (PAYE Plan)
Income-Based Repayment Plan (IBR Plan)
Income-Contingent Repayment Plan (ICR Plan)
If you’d like to repay your federal student loans under an income-driven plan, you need to fill out an application. Click apply now or visit studentloans.gov today!
Why not use the Repayment Estimator created by the federal government? This can help you plan for your loan payment amounts as well as help you pick the best repayment plan for you. Before you borrow more loans, you may want to see what your payments already look like
What if I Can’t Afford My Payments?
The WORST thing you can do is ignore your payments if you are having trouble. If you fail to make payments for 270 days, or 9 months, then your loans will be considered in default, and will be reported to the credit bureaus accordingly. The consequences of default are severe:
The entire unpaid balance of your loan and interest is immediately due and payable.
You can lose eligibility for Deferment, Forbearance, and Repayment Plans.
You lose eligibility for additional federal student financial aid.
Your loan account is assigned to a collection agency.
Your credit rating will be damaged, negatively affecting your ability to buy a car, house, or even get a credit card.
You employer can withhold money from your paycheck and instead use it to pay the government, in a process called wage garnishment.
Your federal and state taxes may be withheld through a tax offset to collect any of your defaulted student loan debt.
It will take years to reestablish your credit and fully recover from default. The best thing to do is avoid it altogether, and speak to your loan servicer when you are starting to fall behind!!!
Change your payment due date. Do you get paid after your monthly payment due date? If so you can contact your loan servicer and ask whether you can switch the payment due date.
Change your repayment plan. How much you ultimately pay on your student loans depends on the plan you choose and when you borrowed. To lower your payments, you may want to consider and Income Driven Repayment plan that will base your monthly payment amount on how much you make.
Consolidate your loans. If you have multiple student loans, simplify the repayment process with a Direct Consolidation Loan, which allows you to combine multiple federal student loans into one monthly payment.
Deferment or forbearance. If the above options don’t work for you, and you cannot make your payments, you could be eligible to postpone your payments through a deferment or a forbearance. Interest on the loan may or may not accrue, depending on the circumstances. Contact your loan servicer to determine if you have remaining deferment or forbearance eligibility remaining. Depending on your options, interest may or may not accrue on your deferment, and will likely accrue on your forbearance.