When taking out a financial aid loan it is important to remember that it must eventually be repaid. After graduating or dropping below half-time enrollment, repayment will usually be deferred for 6 months. There are several different types of repayment plans, and choosing the one that best fits your financial situation is important.

Standard Repayment Plan
This plan has a fixed annual repayment amount paid over fixed period of time not to exceed 10 years.

Graduated Repayment Plan
Payments on this plan start at a lower amount and increase generally every 2 years. Payments are made over a fixed period not to exceed 10 years.

Extended Repayment Plan
This plan has a fixed annual or graduated repayment amount is to be paid over a period not to exceed 25 years. Must have more than $30,000 in loan debt.

Income Based Repayment
This plan caps your required monthly payment at an amount intended to be affordable based on your income and family size. If you are eligible, the standard repayment period is 25 years. Click here to review the fact sheet about this loan.

Income Contingent Repayment (Direct Loans Only)
With this plan, your monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse’s income if you’re married), family size, and the total amount of your Direct Loan. The amount is to be paid over a period not to exceed 25 years.

Income-Sensitive Plan
The monthly payment on this plan is based on annual income with maximum repayment period of 10 years.

For more information on repayment options, click here.


Deferment is a period of time when no payments are required; however your interest will continue to accrue on unsubsidized loans.

To qualify for deferment you must be enrolled in school at least half-time, or prove an inability to find full-time employment and/or economic hardship.


Forbearance is a period of time during which payments are temporarily reduced or postponed. During forbearance interest will continue to accrue on both subsidized and unsubsidized loans.

Important: Borrowers must contact their lender to apply for deferment or forbearance.


Default is the worst-case scenario in financial aid loan repayment. Default occurs when an installment payment is missed, or if the borrower fails to comply with the terms of the promissory note.

Loans will go into default if you become 270 days delinquent (for monthly payments) or 330 days delinquent (on longer term payment plans).

If you default on your student loan, you could be subjected to a host of negative consequences (financial and otherwise). As a result, it’s best to explore all available options to avoid this outcome.

Important: If you are at risk of default contact your lender immediately to discuss your options.

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