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What Do You Know Today? A Repayment Q&A

This learning opportunity provides information about your rights and responsibilities as a borrower, including information about various repayment plans and deferment or forbearance options that may be available to you if you are unable to make a payment. Pay attention so you are not surprised when your first loan payment is due.

Take our Q&A to find out what you may already know right now…

A grace period is:

A. The period of time after I leave school when I don't need to make loan payments
B. Any time during which I am allowed to postpone my loan payments
C. Any time during which interest does not accrue on my loan
D. Any time during which I don't need to make loan payments because I am looking for a job
E. None of the above

The correct answer is A. During a grace period, you do not need to make any loan payments. Your grace period generally begins the day after you graduate, leave school, or drop below half-time status and ends the day before your first payment is due. Not all loans have a grace period. For those that do, the grace period is usually 6 months, but it may be more or less than that depending on the type of loan.

Learn more about the grace period.

Repayment is:

A. The period during which I must pay back my student loan
B. A penalty that I will incur if I fail to pay my loan on time
C. A refund that my lender will give me after I make a certain number of payments on time
D. The transaction in which my lender gives my loan money to my school
E. None of the above

The correct answer is A. During repayment, you are responsible for paying back your student loan.

Learn more about repayment and other loan essentials.

When I pay back my loan, my monthly payments will:

A. Always be the same amount
B. Start small and increase over time
C. Vary based on my income
D. Any of the above

The correct answer is D. All student borrowers start out with a Standard Repayment plan, in which your monthly payment is always the same amount (A). A standard plan has a minimum payment of $50 per month. If you can't afford this amount, a different repayment plan such as the Graduated Repayment plan (B), Income-Based Repayment plan, Income-Contingent Repayment plan, or Income Sensitive Repayment plan (C) can help reduce your monthly payments. Be sure to choose the repayment plan that is right for you and your budget.

Learn about the various repayment plans.

I may be eligible for a discount on my loan payments if I:

A. Make payments while I'm still in school and/or during my grace period
B. Pay back my loan using an automated debit service
C. Pay more than the amount due every month
D. Notify my servicer that I don't have enough money to pay
E. All of the above

The correct answer is B. If you sign up for automated debit with your federal loan servicer, you may receive a 0.25% discount on your interest rate. You can also save money in the long run if you pay ahead of schedule or pay more than your monthly payment amount due.

If you're struggling to pay, notify your servicer. Your servicer can provide you with a number of options, but a discount is not one of them.

Important note: If you have applied for Public Service Loan Forgiveness (PSLF), contact your loan servicer ahead of time if you plan to pay more than your monthly payment amount as this may impact your eligibility for PSLF.

Learn how automated debit services work.

The advantages of a consolidation include:

A. Less interest to pay in the long run
B. A shorter repayment term
C. Additional discounts and incentives
D. The ability to make only one monthly payment to one servicer
E. All of the above

The correct answer is D. Loan consolidation allows you to combine one or more existing student loans into a single new loan; and, managing one loan with one monthly payment is more convenient than managing multiple loans.

Learn more about loan consolidation.

If I fail to make payments and default on my loan:

A. My entire loan balance (and penalties up to 25%) will become immediately due in full
B. The government may keep my income tax refund to apply toward my loan debt
C. My wages may be garnished and my employer may be legally obligated to forward up to 15% of my salary toward repayment of my loan
D. I will not be eligible to receive Federal Student Aid
E. All of the above

The correct answer is E. If you do not have a deferment or forbearance and you don't make any loan payments for 270 days on a federal loan, your lender/loan servicer will take steps to place the loan in default. Don't let this happen! Default can have devastating consequences.

Learn more about default.

I may not need to pay back my loan if:

A. I did not like the college education I received
B. I can't find a job
C. I work full-time in the public service field
D. All of the above

The correct answer is C. You MUST pay back your student loans, even if you did not like the college education you received or you can't find a job. However, there are a few circumstances in which your debt may be cancelled and you won't have to pay (a situation known as "discharge" or "forgiveness"). Working full-time in the public service field is just one circumstance that may qualify you for discharge or forgiveness.

Learn about the other circumstances that may qualify you for discharge or forgiveness.

The best way to keep track of my federal loan information is:

A. Through my school's Financial Aid Office
B. Online at StudentAid.gov
C. Through my mom or dad
D. By reading copies of my loan documents
E. All of the above

The correct answer is B. StudentAid.gov is the best source to track your federal student loans because it centralizes all of your federal student aid information in one place. This site includes information from your school, lenders, servicers, and guarantors. Sign in to view details about your federal loans, as well as your history of federal student aid.

Go to StudentAid.gov.

I need to complete exit counseling only if/when I:

A. Graduate
B. Change my attendance to less than half-time
C. Withdraw from school or stop attending
D. Transfer to another school
E. All of the above

The correct answer is E. You may also need to complete exit counseling if you take a leave of absence.

Learn more about exit counseling.