Student Loan Repayment Information for Graduates
The information provided below will be useful in relieving some of the stress that comes with managing your student debt:
Student Loan Grace Periods
Federal student loans, including Federal Direct loans carry a 6-month grace period. This means that payment may not be required until 6 months after graduation. Be aware that you are only eligible for one grace period; therefore, if you took a leave of absence and used it, it may not be available. The U.S. Department of Education may grant a deferment on the Graduate Plus loan payment to align with the Direct Loan payment deadline. Contact your lender or the Direct Loan Program to inquire about this option.
Perkins loans carry a 9-month grace period and Tuition Credit loans carry a 12-month grace period. Any questions regarding these two types of loans may be addressed to the University of San Diego Loan Administration department.
Deferment & Forbearance of Payments
In addition to the grace period, borrowers of federal loans can qualify for a period of deferment and/or forbearance of all payments for up to 3 years (on 12 month increments) provided they meet criteria for “partial economic hardship.” If you are unable to find employment and you have begun your repayment period, we encourage you to contact your loan holder and request relief via a deferment or forbearance. For more information, please contact your lender, the financial aid office or visit the Direct Loan website.
Federal student loans provide a variety of repayment options to suit your needs. A list of the options is provided by the Direct Loan website. The College Cost Reduction and Access Act of 2007 (Pub.L.110-84) created a new program for student loan borrowers, the Income Based Repayment option, which becomes available starting July 1, 2009. This program allows graduates with high levels of debt and lower incomes for substantially reduced monthly payments and includes a forgiveness provision of any remaining balances in 10 years for employees in the public interest or public service arenas or after 25 years for everyone else. Be aware that it is general practice to place graduates in the 10 year standard repayment plan. You must contact your lender or the Direct Loan Servicing Center to request a different plan.
Useful Resources and Information
Direct Loan Servicing Center - The Department in charge of servicing your student loans once you begin repayment.
Income Based Repayment (IBR) Calculator – Direct Loan Program's IBR calculator helps you determine your projected payment based on your loan debt and income information.
NSLDS – The National Student Loan Data System for Students gives you access to the current status of your federal student loans. The information includes loan balances, loan holders, and payments due.
Public Service Loan Forgiveness Program - Equal Justice Works has a helpful checklist and information on the requirements of loan forgiveness based on public service work.
USD Law’s LRAP Program – Information on USD’s LRAP program including requirements, application deadlines, etc.