"Defaulting on student loans can present an obstacle if you want to go back to school.Student loan default, which occurs after 270 days of missed payments on federal student loans, typically makes you ineligible for federal student aid. That means borrowers in default can’t access the grants, work-study programs and student loans that help make college affordable," U.S. News & World Report writes.
..."Defaulting on private student loansfrom a bank, credit union or other lender doesn’t make you ineligible for federal financial aid. You’ll still be able to submit the FAFSA and access federal grants, work-study and student loans for college or graduate school.
However, it may not be a good idea to take on more debt when you’re already behind on your student loan payments, and private loan default is still a difficult situation.
'Defaulting on private loans should be taken seriously, as they have more grave and immediate consequences,” says Karen McCarthy, vice president of public policy and federal relations with the National Association of Student Financial Aid Administrators. “For borrowers dealing with private student loans in default, they should reach out to their private student loan servicer about repayment options.'"
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsem*nt of the material or guarantee the accuracy of information presented.
Publication Date: 9/11/2023
FAQs
Loan Simulator is the best way to compare our different repayment plans. You can use Loan Simulator to find out which plans you're eligible for and to see estimates for how much you would pay monthly and overall.
How do I see what repayment plan I have for student loans? ›
How can I check? You will know if you are enrolled in an IDR plan if you simply log into the Department of Education website at www.studentaid.gov. You will need to have or create a FSA ID to access your account.
Which repayment plan is best for student loans? ›
Best repayment option: standard repayment. On the standard student loan repayment plan, you make equal monthly payments for 10 years. If you can afford the standard plan, you'll pay less in interest and pay off your loans faster than you would on other federal repayment plans.
Which repayment plan will you be placed on? ›
FAST FACTS. If you don't pick a repayment plan, your loan servicer will place you on the Standard Plan. Payments are fixed and made for up to 10 years (between 10 and 30 years for consolidation loans).
Which repayment plan qualifies for student loan forgiveness? ›
What is a qualifying repayment plan? To maximize your PSLF benefit, repay your loans on the Income-Based Repayment (IBR) Plan, the Pay As You Earn Repayment Plan, or the Income Contingent Repayment (ICR) Plan, which are three repayment plans that qualify for PSLF.
How do I know which student loans will be forgiven? ›
If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.
Can I change my student loan repayment plan at any time? ›
If you have Direct Loans you can change your payment plan at any time. If you have FFEL loans, you are allowed to switch your payment plans at least once a year, but you may be able to switch more often if needed.
What is the most common student loan plan? ›
Older loans (from England or Wales) and loans taken out in Northern Ireland, are called plan 1 loans. Loans taken out in Scotland are called plan 4 loans. There is a newer type of student loan, called plan 5, which includes most loans taken out in England from August 2023 onwards.
What is the smartest way to repay student loans? ›
Pay More than Your Minimum Payment
Paying a little extra each month can reduce the interest you pay and reduce your total cost of your loan over time. Continue to make monthly payments even if you've satisfied future payments, and you'll pay off your loan faster.
What repayment plan are you automatically placed in? ›
Standard Repayment
You are automatically placed in this plan unless you choose another one. Payments are a fixed amount that is set to allow you to pay off loans within 10 years (but up to 30 years for Consolidation Loans).
An income-driven repayment (IDR) plan bases your monthly student loan payment amount on your income and family size. For some people, payments on an IDR plan can be as low as $0 per month.
Can I pay $50 a month for student loans? ›
Under the Standard Repayment Plan, you'll make fixed monthly payments of at least $50 for a period of up to 10 years for all loan types except Direct Consolidation Loans and FFEL Consolidation Loans. Learn about Standard Repayment Plan monthly payment amounts for consolidation loans. Was this page helpful?
Which is the best student loan repayment plan? ›
The standard repayment plan is the most common option for federal student loans (it's literally the standard). You make fixed monthly payments over a ten-year period, at which point the loan is paid in full. Pros: You'll pay off your loans in just ten years, which is a heartbeat compared to some of the other plans.
What repayment plans do not qualify for PSLF? ›
The following repayment plans do not qualify for PSLF:
- Standard Repayment Plan for Direct Consolidation Loans.
- Graduated Repayment Plan.
- Extended Repayment Plan.
To qualify for forgiveness of any remaining loan balance at the end of the 20-year repayment period, you must have made the equivalent of 20 years of qualifying monthly payments (240 qualifying monthly payments) and 20 years must have elapsed.
How do I see what repayment plan I'm on EdFinancial? ›
How to Save on Interest and Pay Off Your Loan Faster
- Loan Details: Your loan balance(s) and interest rate(s) can be found in this section. ...
- Repayment Term: You can view your current repayment plan and estimated payoff date in your online account by choosing "Loan Details" and selecting the loan you want to view.
How can I find all my loans in my name in India?
- Visit the credit bureau's website.
- Log in with your PAN card and other details.
- Enter OTP to confirm your registered mobile number.
- Download your credit report and check your active loans.
StudentAid.gov can be a valuable tool for you in keeping track of your student loan information. Checking StudentAid.gov and communicating with your loan servicer will give you the information you need to get back on track for your student loan repayment.
How do I change my student loan repayment plan? ›
You can sign up for and switch your loan repayment plan by contacting your loan servicer. If you are signing up for (or switching to) an IDR plan, you can also apply online at studentaid.gov. If you sign up for an IDR plan, you will need to provide information to your loan servicer about your income and family size.
