See information below on the different types of federal loan repayment options in addition to consolidation, deferment, forbearance, forgiveness programs, exit counseling, grace period, delinquency, and default definitions.

Contact ECMC for support at https://www.ecmc.org/borrowers/index.html and 1-844-782-2333

Use the federal loan repayment estimator for assistance.

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1.  Standard Repayment (non- income driven)

•  For direct and FFELP (Federal Family Education Loan Program) borrowers
• Equal monthly payments of at least $50 for up to 10 years
• Borrowers will automatically be enrolled in the standard repayment plan
• Option for those who want to repay loans in the shortest time with the lowest amount of interest accrued

2. Graduated Repayment (non- income driven)

•  For direct and FFELP (Federal Family Education Loan Program) borrowers
• Monthly payments start lower and gradually increase over time for up to 10 years
• Monthly payment will never be less than the amount of interest that accrues between payments
• Option for those with less cash flow early on, but expect that their income will increase steadily over time

3. Extended Repayment (non- income driven)

• For direct and FFELP (Federal Family Education Loan Program) borrowers
• Payments that are fixed of gradually increase over 25 years for loan debts exceeding $30,000 in direct or FFELP loans
• More interest is paid over the life of the loan
• Option for those with larger loan debt and need a lower monthly payment

4. Revised Pay As You Earn Repayment (Income driven)

• For direct loan borrowers
• Monthly payments will be 10% of discretionary income
• Payments recalculated annually based on income and family size
• If married, then borrower and spousal income or loan debt are considered 
• Any outstanding balance will be forgiven after 20 or 25 years

5. Income-based Repayment (Income driven)

• For direct and FFELP (Federal Family Education Loan Program) borrowers
• Designed to help borrowers with unmanageable payments relative to income
• Available for borrowers on or after July 1, 2009
• Option for someone who is looking for the lowest possible monthly payment based on their income
• Borrowers must reapply each year
• At the end of 25 years of repayment any remaining balance may be forgiven
• Any loan amount forgiven is taxable income
• Payments count towards Public Loan Forgiveness

6. Pay As You Earn (Income driven)

• For direct loan borrowers
• Designed to help borrowers with unmanageable payments relative to income
• Available for borrowers as of December 21, 2012
• Option for someone who is looking for the lowest possible monthly payment based on their income
• Borrowers must reapply each year
• At the end of 20 years of repayment any remaining balance may be forgiven
• Any loan amount forgiven is taxable income
• Payments count towards Public Loan Forgiveness

7. Income-Contingent Repayment (Income driven)

• For direct loan borrowers
• Payments are based on income and family size
• Option for someone needing a reduced payment but are not eligible for Income-based repayment or Pay As You Earn repayment
• Borrowers must reapply each year
• At the end of 25 years of repayment any remaining balance may be forgiven
• Any loan amount forgiven is taxable income
• Payments count towards Public Loan Forgiveness

8. Income-Sensitive Repayment (Income driven)

• For FFELP loan borrowers
• Monthly payments are based on income and total loan amount
• Repayment term is 10 years
• Option for someone needing a monthly payment to fluctuate with their income
• Borrowers can change their plan annually

Refinancing Student Loans Resource & Credible

Use the refinancing calculator.

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Direct Consolidation Loans (Guide)

• Have a fixed interest rate based on the average interest of your federal loans rounded up to the nearest one-eighth of 1 percent
• May give borrowers a lower monthly payment
• Option for those with multiple servicers and wish to make one payment each month
• New interest rate, repayment schedule and terms of loan
• Borrowers may choose their own servicer 
• Loan applications available at student loans.gov
• Borrower must be in grace period of repayment to consolidate
• Repayment begins approximately 60 days after consolidation process is completed
• Borrowers have 180 days to add to a direct consolidation loan once it’s been made

Deferment

• Postponement of loan payments based on borrower eligibility which depends on specific criteria, the loan type, and the date of the borrowers first loan
• In most cases, borrowers must request a deferment and provide documentation necessary to support eligibility 
• In school deferment is automatic
• Most deferments are borrower –specific
• The federal government pays the accruing interest on subsidized loans
o Types and length of deferment
 In-school, graduate fellowship, military, and rehabilitation training program have no time limit
 Unemployment and economic hardship are up to 36 months

Forbearance

• Temporary postponement, reduction, or repayment extension of loan payments
• Interest accrues on all loans
• Offered at lender discretion, except mandatory forbearance
• Typically granted for up to 12-month intervals, but the loan servicer sets the maximum time allowed
• Borrower’s first payment is due no later than 60 days after the date the forbearance expires
o Types include administrative, discretionary, mandatory and mandatory administrative

Loan Forgiveness: 

• Public Service Loan Forgiveness

o Borrowers who hold a full-time public service position for 10 years may be eligible to have the remaining Direct loans balance cancelled after making 120 qualifying monthly payments after October 1, 2007.  

• NASFAA Issue Brief October 2017

• Teacher Loan Forgiveness

o The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Under this program, if you teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans. If you have PLUS loans only, you are not eligible for this type of forgiveness.

Student loan forgiveness guide

• Enacted in Connecticut’s 2014 legislative session, S.B. 18 allows for up to $25,000 in student loan reimbursement over five years for English language learner educators serving in public schools within the state. Recipients also must have completed their teacher preparation program in a state institution.

Exit Loan Counseling

• Required for Direct federal student loan borrowers
• May be conducted in person, by audiovisual presentation or by interactive electronic means

Grace Period

• Students should sign up for online account access with their loan servicer

• Create a budget to determine affordability
• Review all repayment plans
• Use calculators to help find the affordable plan to meet their goals

During the grace period:

 The lender must offer the borrower a choice of repayment schedules no more than 6 months before the first payment is due
 The borrower must select a repayment schedule within 45 days of lender’s notification
 If the borrower does not select and plan, the lender will establish the standard repayment schedule

Delinquency

• A loan is considered delinquent when one payment is missed

• Delinquent loans are reported on a borrower’s and co-signer’s credit report
Technical Default occurs when a borrower does not make payments for 270 days on subsidized, unsubsidized, PLUS or consolidation loans

Default

• For direct loans – the Department of Education defines default as a loan that is more than 270 days delinquent and the loan is referred to the Debt Management Collection System (DCMS) and considered in default once the borrower is 360 days delinquent
• For FFELP loans – the lender files the claim up to 60 days after technical default; the loan is not considered in default until the claim is paid (up to 60 days later)

• Ways to avoid default
• Read more about default from CNBC
• Rehabilitation
• Consequences of default

 Damaged credit rating for at least 7 years
 Federal tax refund revoked
 Collection fees assessed on defaulted loans
 Wages garnished
 Inability to receive additional financial aid
 Schools receive privileges and sanctions based on the percentage of defaults
• Three year cohort default rate = percentage of borrowers who enter repayment in one federal fiscal year and default by the end of the next two federal fiscal years