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Loan Repayment

How long do I have to pay back my loans?

Stafford and PLUS Loans generally allow borrowers up to 10 years to repay the loan. Deferments and/or forbearances will not count toward the 10-year term. You may, however, extend the 10-year term if you qualify for the Extended Repayment Plan. Another way to stretch your repayment term and reduce your monthly payments is to consolidate your loans. By consolidating, you could extend repayment period up to 30 years depending on the initial balance of the loan.

How is repayment affected if I go back to school after entering repayment?

If you go back to an approved school and are enrolled half-time or more, or are enrolled in a graduate fellowship program, you can put your loans into a deferment status. There are no principal payments due while you are in deferment and the government will pay the interest on your subsidized loan during periods of deferment.

What happens if I don't pay back my loan?

If you do not repay your loan according to the terms disclosed on your promissory note, you may eventually be in default on the loan. Some consequences may include:
  • An adverse affect to your credit rating that may limit your ability to borrow for a car, home, or credit card.
  • A requirement to pay the entire amount of the loan, including interest, immediately.
  • A withholding of your wages to pay your debt after the loan is assigned by the guaranty agency or the federal Department of Education.
  • Inability to get additional federal or state financial aid, including student loans.
  • Withholding of your federal and state tax refunds.

When do I have to begin paying back my student loans?

The day you finish school, or drop below half-time status, your Stafford student loans go into a "grace period." The grace period is a six month term where you are not yet required to start making payments. Once that grace period expires, payments will begin. You only get one grace period on each loan. If you stop going to school, then start again (thus putting your loans in deferment), when you leave school again payment will begin within 60 days without a grace period. Any new loans, however, will be eligible for a grace period.

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