Stop My Student Loan Payments - FAQ

What is a federal student loan?

Federal loans are borrowed funds that you must repay with interest. A federal student loan allows students and their parents to borrow money to help pay for college through loan programs supported by federal goverment. They have low interest rates and set repayment terms.

What is a private student loan?

A private student loan is a nonfederal loan issued by a private lender such as a bank or credit union.

What is the difference between Direct Subsidized Loans and Direct Unsubsidized Loans?

In short, Direct Subsidized loans have slightly better terms to help out students with financial needs. Here's a quick overview of Direct Subsidized Loans:

•Direct Subsized Loans are avaliable to undergraduate students with financial needs.

•Your school determines the amount you can borrow, and the amount may not exceed your finanicial needs.

•For a subsidized loan, the U.S. Department of Education pays the interest while you're in school at least half time, for the first six months after you leave school (referred to as a grace period), and during a period of a deferrment (postponement of loan payments) after graduation or last attended class.

What is a PLUS loan?

PLUS loans are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay education expenses. The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loans Program.
Here's a quick overview of Direct Plus Loans:

•The U.S. Department of Education is the lender.

•The borrower must not have an adverse credit history.

•Loans have a fixed interest rate of 7.9%.

•The maximum loan amount is the student's cost of attendance (determined by the school) minus any other finanical aid received.

What is a Direct Loan?

A federal student loan, made through the William D. Ford Federal Direct Loan Program, for which eligible students and parents borrow directly from the U.S. Department of Education at participating colleges.

What is a Direct Consolidation Loan?

A federal loan made by the U.S. Department of Education that allows you to combine one or more federal student laons into one new loan. As a result of consolidation, you will only have to make one monthly payment.

I'm a parent that took a PLUS loan to help pay for my child's education. Can my loan ever be forgiven, canceled, or discharged?

You must repay your parent PLUS loan even if the student doesn't complete his or her education. The parent PLUS loans are eligible for the same forgiveness as a normal student loan, just based on the parents qualifications. Example: Parent is a teacher and can qualify for loan forgiveness after 120 payments, and principal reducion based on employed school status.

What is deferment?

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

What happens if i don't make my student loan payment?

If you don't make your student loan payment or make your paymet late, your loans may eventually go into default. If you default on your student loans, that status will be reported to credit bureaus, and your credit rating and future borrowing ability will be damaged. In addition, legal action can be taken to require payment through garnishment of wages and withholding of tax refunds.

When do I begin repaying my federal student loan?(None consolidated)

You don't have to begin repaying most federal loans until after you leave college or drop below-half time enrollment. However, PLUS loans enter repayment once your loan is fully disbursed (paid out). Your loan servicer or lender must provide you with a loan repayment scedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment. Keep in mind that your loan may have a grace period.0.