Financial Aid

Postponing Loan Repayment (deferment and Forbearance)

Under certain circumstances you can receive periods of deferment or forbearance that allow you to postpone loan repayment. These periods don't count toward the length of time you have to repay your loan. Interest does not accrue on subsidized direct loans during a deferement period, but you are responsible for paying the interest that accrues during deferment on an unsubsidized loan.

Qualifications for a Deferment

Deferment of principal and interest payments may be obtained under the following circumstances:

• For any period during which you are enrolled at least half-time.
• For up to three years while you are seeking but unable to find full-time employment or are experinencing economic hardship.
• During the periods you are serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergecy. 

Cancellation or Discharge

A cancellation or discharge releases you from all obligations to repay the loan. If you think you qualify for a discharge you must apply to the holder of your loan.

Qualifications for a Cancellation (Discharge) of a Loan

Loans are only discharged under specific circumstances and as long as you're not in default on the loan.

Examples are:

• Death
• Total permanent disability
• Your loan might be discharged for working in a designated low-income school.
• Other cancellations are loan specific

Your loan cannot be cancelled because:

• You did not complete the study at your school (unless you couldn't complete the program for a valid reason - because the school closed for example.)
• You didn't like the school or program of study
• You didn't obtain employment afterwards

Consolidation

You can consolidate (combine) multiple federal student loans with various repayment schedules into one loan. 

Benefits of a Consolidation Loan

• Make one monthly payment
• Your payments can be significantly lower
• You can take longer time to repay (up to 30 years)
• You can pay a lower interest rate than on one or more of your existing loans
• You can consolidate your loan during grace periods, once you entered repayment, or during periods of deferment or forbearance.

Interest rate for a Direct and FFEL Consolidation Loan

The interest rate is a fixed rate for the life of the loan. The fixed rate is based on the weighted average of the interest rates on the loans you consolidate, rounded up to the nearest 1/8 of a percent. The interest rate cannot exceed 8.25%.

How to get a consolidation loan

• Direct Consolidation Loan - You (or your parents for a Direct PLUS Consolidation Loan) can contact the Direct Loan Origination Center's Consolidation Department at 1-800-557-7392 or you can go to www.loanconsolidation.ed.gov.