Student Loan Repayment

The U.S. Department of Education pays the interest on a direct subsidized loan:

• While you’re in school at least half time
• For the first 6 months after you leave school (during your grace period)
• During a period of deferment (a postponement of loan payments)

Interest accrues on unsubsidized loans from the time it is disbursed. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow interest to accrue and be capitalized. If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay.

The parent borrower will repay the servicer listed on the disclosure statement that was provided when they received the loan. The loan servicer also will be listed in the parent's account on studentaid.gov. The Direct PLUS Loan Program for parents offers multiple repayment plans – standard, extended and graduated. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan. 

• A PLUS loan made to the parent cannot be transferred to the student.
• The parent borrower is responsible for repaying the PLUS Loan.

Repayment options vary based on your loan terms. Check with your lender to see what your repayment options are. Private loans cannot be included with federal loans if pursuing federal loan consolidation. SFA encourages all students to pursue federal student loan options before borrowing private loans.

A period in which payments of the principal balance are temporarily postponed if you meet certain requirements

• Government pays interest on subsidized loans in deferment.
• Unsubsidized loans accrue interest that can be paid or capitalized.

Types of Deferment

• Enrolled at least half time at eligible school
• Study in approved graduate fellowship or in a rehabilitation program for the disabled
• Unable to find full-time employment (up to 3 years)
• Economic hardship (includes Peace Corps Service) (for up to 3 years)
• Some Armed Services situations (see exit counseling guide for criteria)

If you do not qualify for a deferment. Forbearance allows you to postpone or reduce your monthly payment amount for a limited and specific period. You are responsible for all interest that accrues and any unpaid interest is capitalized at the end of the forbearance.