Federal Direct Student Loan Repayment
Once you graduate, drop below half-time enrollment, or leave school, your federal student loan goes into repayment. Most borrowers have a six-month grace period before you are required to start making regular payments.
- How to Prepare for Successful Student Loan Repayment
- How to Pick the Right Repayment Plan
- Tips & Tricks to Prepare for Student Loan Repayment
Whether you are returning to repayment for the first time since 2020 or making your first ever student loan payment, you can set yourself up for success by preparing early. No matter your circumstances, the steps outlined below will walk you through the process and connect you with resources for additional support.
Use your FSA ID to Log In to StudentAid.gov. You used your FSA ID to complete the FAFSA form. Once logged in, you should update your personal information and confirm your student loan servicer.
If you don’t know who your servicer is, you can find out by logging on to studentaid.gov and visiting the “My Loan Servicers” section of your dashboard. That section of the dashboard will also give you the servicer’s contact information. A full list of loan servicers for federal student loans can be found here. Since the student loan payment pause came into effect at the beginning of the COVID-19 emergency, it is possible that your servicer may have changed their name or changed completely to another entity.
Log in to your student loan servicer account and update your contact information. Once you confirm your loan servicer, you should create an account or log in to an existing one via the servicer’s website to review your personal contact information. Your information — such as your mailing address, email address, and phone number — may need to be updated. It is important to keep your contact information current on your servicer account so that they can reach you with important updates.
Reauthorize or select auto debit for monthly payments. If you were previously signed up for automatic debit before the payment pause began, you must reauthorize or select automatic debit through your loan servicer account. This will allow your loan payments to be automatically withdrawn from your bank account every month. Most borrowers will benefit using automatic debit with a 0.25% interest rate deduction.
Review payment due date and amount you will also be able to view your monthly payment amount and the date that your first payment will be due. Make note of this information to ensure you either proactively make a payment by the deadline, or are prepared for the funds to be drawn by auto debit. You should also ensure that you update any banking information.
Use tools on studentaid.gov and your servicer’s portal to ensure your repayment plan is the best fit FSA also makes available various resources that can help you choose the student loan repayment plan that is best for you and your needs
Log in to your student loan servicer account. The contact information your servicer has may be dated and need to be updated. It is important that your servicer has accurate contact information so they can reach you with pertinent updates. You should also review your outstanding balances and accrued interest.
Consider your repayment strategy and decide whether you need to change plans A significant part of navigating student loan repayment is selecting your repayment plan, a decision that will likely be informed by your repayment strategy. Each borrower must determine their repayment plan based on their priorities and overall financial situation. Some borrowers may aim to pay off their loans as quickly as possible, others may wish to have the lowest monthly payment possible, and some may wish to pay the lowest total amount possible over time. When you completed loan exit counseling with your school, you selected a plan to repay your student loans. If you didn’t select a repayment plan, you were automatically placed in the standard plan. It is possible that the plan you were in prior to the repayment pause no longer aligns with your repayment strategy. With the repayment pause ending, this is a great opportunity to consider which repayment plan will best help you achieve your goals. FSA’s Loan Simulator has tools to help you identify the student loan repayment strategy that best meets your goals and provides guidance on decisions, such as whether it would be beneficial to consolidate your student loans.
Research repayment options and confirm the best plan for you. There are several different repayment plans that borrowers may choose to enroll in. Some repayment plans are solely based on the amount you borrowed, and that amount (plus interest) is divided into equal, fixed installments to determine your monthly payment. Other plans take your income into account when calculating how much you’ll pay each month. These are called income-driven repayment (IDR) plans. In many cases, an IDR plan will provide you with a lower monthly payment than a standard, fixed repayment plan. If you don’t remember which repayment plan you’re in, you can find it by logging on to studentaid.gov or on your loan servicer’s portal. You can also find information on your outstanding balances, accrued interest, and current monthly payment. If you are considering selecting a different plan, you should research and do a thorough comparison of the various options to identify the plan that best fits your current circumstances. The FSA Loan Simulator on studentaid.gov is an easy way to compare repayment plans that you qualify for and view estimated monthly payments based on your circumstances and repayment goals. Your loan servicer may also have different repayment calculator tools to help you figure out which plan is right for you. You should call your servicer if you have questions or need additional support in selecting a plan, but should be prepared for extended wait times for your call to be answered.
Once you’ve selected the plan that’s right for you, log in to your servicer portal or studentaid.gov to select your desired plan If you decide to change your repayment plan to a non-IDR plan, log on to your loan servicer’s website to initiate the change. If you would like to apply for an IDR plan, you can do so via this page on studentaid.gov. Keep in mind that if you select an IDR plan, you may be asked for additional information to certify your income and family size. If you need additional support in selecting a plan or have questions about the process, contact your loan servicer via phone or chat.
Start Early and Be Ready
It is important for borrowers to take action as soon as possible since student loan interest resumed on September 1, 2023 and payments became due in October 2023. Ensure you are able to log in to your necessary accounts to access and update any relevant information. Don’t delay being proactive if you anticipate encountering any troubles as repayment begins, as there are consequences of not being prepared.
Review Your Personal Budget to Accommodate Student Loan Payments
Along with confirming your payment due date and amount, review your personal budget to ensure that you will be able to make your monthly payments. This tool provided by FSA can help you create, manage, and maintain your budget. FSA also outlines some general budgeting tips, as well as information on how to handle your finances and student aid while in school.
Be Patient & Remain Diligent
Given that millions of borrowers will be transitioning into repayment, it is important to be patient, as it is possible that loan servicers may be overwhelmed with a high volume of inquiries. It is possible you may not reach your servicer’s representative via phone the first time you call. If that is the case, you may need to call a few times before you are able to connect with someone. While you may reach your loan servicer via phone, there are other ways to get your questions answered, such as searching information on your loan servicer’s website, emailing, or using live chat features — especially if you are looking for information that is more readily available.
It is important that you keep good documentation of your financial aid and loan servicer records and communications, such as forms, research, who you spoke to, and detailed notes of what you discussed. Keeping good documentation can help you effectively manage your student loans and ensure you are on track to meet the requirements for certain loan forgiveness programs, and can be useful if you need to reach out to your servicer in the future.
Stay Alert to Avoid Scams
- Your student loan servicer will provide you with free assistance; you should never pay an outside entity to help with your student loans.
- If you don’t know who your servicer is, you can find out by logging on to studentaid.gov and visiting the “My Loan Servicers” section of your dashboard. A full list of loan servicers for federal student loans can be found here.
- While you may reach your loan servicer via phone, stay alert to avoid scams. Your servicer will always initiate communications with you via email, and never by phone. Unless you initiate the contact, you should never share personal information over the phone.