Loan repayment

Before your loan goes into repayment you’ll need to select a repayment plan that best fits your financial situation. If you need assistance or further information, be sure to contact your loan servicer and use the online calculator to help you determine your payment amount. You will be allowed to choose from these plans:

Use the Loan Simulator to explore repayment options.

Standard repayment

Under the standard repayment plan, you will pay a fixed amount of at least $50 each month for up to 10 years. For most borrowers, this plan results in the lowest total interest paid because the repayment period is shorter than it would be under any of the other repayment plans.

Graduated repayment

The graduated repayment plan may be beneficial if your income is low when you leave school but is likely to steadily increase. Payments start out low and then increase every two years. The minimum payment equals the amount of interest that accrues monthly for up to the maximum repayment period – 10 years for Subsidized and Unsubsidized Stafford and PLUS Loans, and 10-30 years for Consolidation Loans (depending on the total loan indebtedness).

Extended repayment

You may choose the extended plan if you did not have an outstanding balance on a FFEL or Direct Program loan as of October 7, 1998 or on the date you obtained a student loan after that date and have more than $30,000 in outstanding Direct Loan Program loans (Note: FFEL and Direct Loans cannot be combined to meet this minimum). Under this plan:

• you may choose to make either fixed or graduated monthly payments
• the minimum payment for a fixed extended payment plan is $50 per month
• the maximum repayment period is 25 years

Income-driven repayment

Available for Direct Loans only, the income-driven plans base the monthly payment on your yearly income, family size and loan amount. As your income rises or falls, so do your payments. There are three income-driven repayment plans available:

• Income Based Repayment (IBR)
• Pay as You Earn
• Income Contingent Repayment (ICR)

You must repay your loan even if you don’t complete your degree or can’t find a job related to your program of study, or are unhappy with the education you paid for with your loan.

However, sometimes you can get your loan discharged (forgiven so you don’t have to repay it), but only under very limited circumstances, such as becoming totally and permanently disabled or if you die.

There are also some provisions for Public Service Loan Forgiveness through the Direct Loan Program. If you work for a qualifying public service organization, you may be eligible for loan forgiveness if you meet all of the required qualifications. Check the Public Service Loan Forgiveness Program Q&As and Fact Sheet to see if you can take advantage of this benefit.

If you have a Perkins Loan and teach in a designated low-income school, you may qualify for loan forgiveness as well. Always check your promissory note for terms and conditions of possible loan forgiveness for any of your government loans.

There are also other conditions under which your loan may be partially or fully cancelled. Always check your promissory note for terms and conditions of possible loan forgiveness for any of your government loans. In addition, contact your loan servicer if you need more information about your eligibility or how to apply for benefits.

You are entitled to a one-time 6-month grace period for your Subsidized and Unsubsidized Stafford loans and a 9-month grace period for your Perkins loans before monthly payments will be required. If you’re having difficulty making your payments once billing has begun, you may be able to postpone them under certain circumstances.

The government has a variety of ways to help you if you can’t make your monthly loan payment. Although the details for each loan program vary, under some conditions you may receive a deferment or forbearance that allows you to temporarily stop making payments. For example, you may qualify for a deferment if you return to school at least half-time, are unemployed, are called to active duty military during a war, or are experiencing an economic hardship as defined in federal regulations.

You can check with your loan servicer for a list of deferment options for federal loans. If you have Perkins, Health Profession, Primary Care, or Nursing Loans, you should check with the UW Servicer for deferments that apply to those loan programs.

Check your servicer’s website for loan deferment forms that you can download or request from them. Once you have the form, it should be submitted to the UW Registrar’s Office for completion.

If you don’t qualify for a deferment but are temporarily unable to make loan payments for reasons such as illness or financial hardship, you may be granted a forbearance and will not have to make loan payments for a set period of time. For all Direct Loans and Perkins Loans, interest that accrues during forbearance is the responsibility of the borrower. For information regarding a forbearance due to the coronavirus, please click here.

Contact your billing servicer for assistance as soon as possible if you’re unable to meet your payment by the scheduled due date. If you are unsure who services your loan, check at studentaid.gov for information and links to your Direct Loan Servicer.

Loan consolidation is a method of refinancing federal educational loans. In a loan consolidation, the loans included in consolidation are repaid in full with a new loan that has a fixed interest rate. The new consolidated loan is then payable according to the terms of the new loan, sometimes with the option of a longer repayment period.

Interest rates

The interest rate for both Direct and FFEL Consolidation loans is a fixed rate for the life of the loan. the fixed rate is based on the weighted average of the interest rates on all of the loans you consolidate, rounded up to the nearest one-eighth of 1 percent. However, the interest rate will never exceed 8.25%.

Loans that can be included

Loans eligible for consolidation include Stafford/GSL and FISL Loans, HEAL Loan, Perkins/NDSL Loan, Nursing Loans, SLS and ALAS Loans, HPSL Loans, LDS Loans, PLUS Loans (students and parents consolidate separately), GPLUS Loans and Consolidation Loans.

Things to consider

Loan consolidation can offer you benefits to help manage your education debt.

• Make lower monthly payments by increasing the repayment period
• Make one single loan payment a month
• Have only one lender for all your educational loan debt
• Lock in a lower, fixed interest rate

There are times when consolidation may not be right for you.

• Certain benefits, such as cancellation benefits, and interest subsidies, may no longer be available
• For some loans, you may lose your grace period and some deferment and cancellation provisions
• If you are close to repaying off your loans, it might not make sense to extend your repayment period as it may add additional interest costs

To apply

You can apply on the Student Loans website or if you have direct loans only you can call 1-800-557-7392 to apply. You can also complete a paper application by calling the number above to request the application. If you wish to keep prior consolidation loans separate you should apply on-line or with a paper application. Once your consolidation has been processed, the Direct Loan Servicer will send you a list of the loans that are included in the consolidation. Please review this list carefully to make sure only the loans you asked to be consolidated are being added to the new consolidation loan.

If you fail to make a payment on time, you are considered delinquent on your loans. If you do not make payments after a period of time (270 days for Direct Loans) you are considered to be in default.

Very few of our students default on their loans and we’d like to help you avoid this situation as well. If you’re having trouble repaying your loans, you can contact a financial aid counselor in our office for help. We can help you understand your options and direct you to the Direct Loan Servicer or the UW’s Servicer with the right questions to ask.

There are some things you should consider to help prevent going into default on your loans:

• Borrow as little as possible
• Understand your options and responsibilities with regard to your loans
• Keep a list of all your loans, including the lender, type of loan, amount of loan, and the interest rate
• Notify your lender promptly if you change your name, address, or return to school
• Contact your loan servicer if you are unable to make your loan payments; you cannot receive a loan deferment or forbearance once your loan is in default
• Consider a consolidation loan to combine all your educational loans into one loan. This might allow you to extend the term of the loan to reduce your monthly payment

Being in default on your federal student loans has severe and long-lasting consequences, including the following:

• The Department of Education can immediately demand repayment of the total amount due on the loan
• The Department of Education or the UW will attempt to collect the debt and may charge you for the costs of collecting
• The default will be reported to national credit bureaus. Your credit rating will be damaged, which will make it more difficult for you to make purchases such as a car or house
• You are ineligible for further Title IV student aid
• You are ineligible for deferments
• The Internal Revenue Service can withhold your federal income tax refund
• Your wages may be garnished