US Federal Direct Loans: Repayment

Preparing for Repayment

You must complete exit counseling when you are leaving school, graduating or dropping below half-time enrollment.

The purpose of exit counseling is to ensure you understand your student loan obligations and are prepared for repayment. Exit counseling will inform you about what your federal student loan payments will look like after school. It will recommend a repayment strategy that best suits your future plans and goals.

Federal Student Aid Interest Rates

The interest rate on Federal Student Aid varies depending on the loan type and the first disbursement date of the loan. The interest rate for US Loans is determined annually for new loans that are made between July 1 of one year and June 30 of the following year. Each loan will have a fixed interest rate for the life of the loan. View current interest rate information through US Department of Education. Your servicer will notify you of the interest rate for each loan you receive.

When Do You Start Repayment

Once you leave school, graduate, or drop below half-time enrollment, your federal student loan goes into repayment. However, if you have a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, you have a six-month grace period before you are required to start making regular payments. You will have a nine-month grace period if you have a previously deferred Perkins Loan.

For PLUS loans, you will go into repayment as soon as the loan is fully disbursed (i.e. completely paid out). However, if you are a graduate and professional student PLUS borrower, you will be placed on an automatic deferment while in school and for six months after graduating, leaving school, or dropping below half-time enrollment.

For Parent PLUS loans, the borrower (i.e. the parent) can request a six-month deferment after your child graduates, leaves school, or drops below half-time enrollment.

Contact your loan servicer for more information.

Grace Periods

For most federal student loan types, after you, leave school, graduate, or drop below half-time enrollment, you have a six-month grace period before you must begin making payments. This grace period gives you time to get financially settled and to select your repayment plan. Not all federal student loans have a grace period. Note that for most loans, interest accrues during your grace period. You can choose to pay the interest that accrues during your grace period. This prevents that interest from being added to the principal balance (also known as interest capitalization).

Repayment Options

When it comes time to repay your loans, you have the option to choose a repayment plan. Spend time reviewing your options and select the repayment plan that is right for you.

If you don’t choose a different repayment plan, your loan servicer will place you on the Standard Repayment Plan. Under the Standard Repayment plan, payments are a fixed amount that ensures your loans are paid off within 10 years and all Direct Subsidized, Unsubsidized Loans and all PLUS Loans can be included in this plan.

If your federal student loan payments are high compared to your income once you enter repayment, you may want to repay your loans under and income-drive repayment place. Income-based repayment plans are set to your monthly payment at an amount that is intended to be affordable based on your income and family size. Under income-based repayment plans, your monthly payment amount is recalculated annually based on your income.

You can request a different repayment plan at any time.

Student Loan Forgiveness

In certain situations, you can have your federal student loans forgiven, canceled, or discharged. Forgiveness, cancellation, or discharge of your loan means that you are no longer required to repay some or all of your loan.

There are several types of forgiveness, cancellation and discharge available for the different types of deferral student loans. Learn more about the types and whether you qualify due to your job or other circumstances here.

Difficulty Making Your Loan Payment

If you are having or anticipating difficulty making your loan payments, reach out to your loan servicer as soon as possible. You may be able to change your repayment plan to one that lowers your monthly payment and, in some cases, may be based on your income.

You can also ask your loan servicer about your options for a deferment or forbearance or loan consolidation.

A deferment allows you to temporarily stop making payments on your federal student loans. If you have Direct Subsidized loans, you are not charged interest on those loans during deferments. Interest will continue to be charged during deferment on your Direct or FFEL Unsubsidized and PLUS loans. If you do not pay this interest during the deferment, it will be capitalized at the end of the deferment.

You can also look in to forbearance or a loan consolidation as other options to provide temporary relief.

You Don’t Have to Pay for Help With Your Federal Student Loans

Many student loan debt relief companies charge a fee to provide services that you can take care of yourself for free by contacting your loan servicer. At no cost, the U.S. Department of Education and our federal loan servicers can help you.

Contact your loan servicer for FREE assistance, if you have questions or need help with your student loans.

Important Resources for Federal Student Aid and Repayment Options

  • Log in to My Federal Student Aid frequently to review your borrowing history.
  • Review your aggregate (total) loan history through the NSLDS website for students.
  • Use the Loan Simulator to help you make decisions about your student loans
  • Consider your income and expenses and use this information to create a budget you can live with.
  • Review and complete Exit Counselling once you have completed or left your program of study at SFU.
  • Learn about and select a Repayment Plan to meet your needs
  • Make your student loan payments on time and be a responsible borrower
  • Stay informed and keep yourself out of default
  • Check out your eligibility for loan forgiveness
  • When you are able to, consider making payments while you are in school, during your grace period, or during periods of deferment or forbearance. Making payments when you are not requied to can substantially reduce the cost of your loan over time.
  • Remember that you can repay your loan at any time, without penalty.
  • Stay in contact with your servicer to provide up to date enrollment information if you change enrollment status or need help with repayment.

What is a loan servicer?

The US Department of Education uses a loan servicer to assist with managing the repayment of the loans that Federal Student Aid borrowers hold. A loan servicer collects loan payments, responds to borrowers’ questions about their loan account, and performs other administrative tasks associated with maintaining a federal student loan. Your servicer will provide you information about repayment, including regular updates on the status of your Direct Loan and any additional Direct Loans that you may receive throughout your education.

You can view your individual Servicer on the US Department of Education website.

What happens if I go back to school after dropping below half-time?

If you drop below half-time enrollment and then resume enrollment on at least a half-time basis before the end of the six-month grace period, your Direct Loan can return to “in-school” status and you will regain a full six-month grace period when you leave school or drop below half-time enrollment again.

When you resume study at SFU, or are a new student to SFU that was previously in repayment, you must contact us by email at as soon as possible so that we can update your enrollment information accordingly.

What is a third-party debt relief company?

Some third-party "debt relief" companies are using the Department of Education's Official Seal without authorization. Some of these companies are charging large up-front or monthly fees for federal student aid services offered by the US Department of Education and its student loan servicers for free. Please see the Consumer Financial Protection Bureau consumer advisory regarding third-party debt relief companies

It is always free to apply for FAFSA, lower or cap your monthly loan payment, consolidate your loans, or see if you qualify for loan forgiveness. Do not pay a company money to help you.

Please see a Video message on YouTube from former Secretary of Education, Arne Duncan.