5 Common Student Loan Mistakes

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1) Not figuring out how much you’ll need to pay each month

As you’re trying to plan your life after graduation, it’s important that you know how much you’ll need to pay each month toward your student loans so you can budget your other expenses accordingly. To estimate what you’ll need to pay based on your income and loan debt, use the repayment estimator.

2) Choosing the wrong repayment plan

The repayment plan you choose is a major factor in determining how much your monthly student loan payment will be and how long it will take you to pay back your loans. The Department of Education offers several different repayment plans. To compare these plans based on your student loan debt and income, use the repayment estimator.

Make sure you’re enrolled in a plan that you can afford. If you’re struggling to make your monthly payment, consider switching to an income-driven repayment plan, such as our “Income-Based” or “Pay As You Earn” plans. If you have questions, need advice, or would like to switch your repayment plan, contact your loan servicer.

3) Not paying extra when you can

If you are paying interest on your federal student loan, that interest accrues each day. An easy way to save money on your student loans is to pay more than what’s required whenever you can. Here are some ideas:

  • Make interest payments while you’re still in school and/or during your grace period
  • Use your tax refund to make an additional loan payment
  • Tack a few extra dollars onto your payment each month

4) Missing payments

If you’re feeling overwhelmed or don’t think you’ll be able to afford your next student loan payment, don’t just stop paying. Instead, contact your loan servicer as soon as possible. Not making your student loan payments is a big deal. It can result in default, which negatively impacts your credit score, and may affect your ability to borrow for things like a car or a home. Your loan servicer can recommend options to reduce or postpone your payment and keep your loan in good standing.

5) Paying for student loan help

There are countless ads online from companies offering to help you manage your student loan debt…for a fee, of course. But, did you know that you can get help with your student loans for free? The U.S. Department of Education provides FREE student loan help through our servicers.

Your loan servicer is the company hired by the U.S. Department of Education to help you manage, understand, and pay back your loans. They are there to help guide you through the loan repayment process, answering any questions you have along the way.

Their services are provided free of charge, but they can only help you if they can reach you. Graduating and moving away from campus? Changing your cell phone number or e-mail address? Make sure you let your loan servicer know.

Nicole Callahan is a digital engagement strategist at the U.S. Department of Education’s office of Federal Student Aid.

4 Must-DOs Before Repaying Your Student Loans

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Congratulations, Class of 2015! Your hard work paid off. You did it! There’s a lot to think about as you begin the next chapter. Let me help you with the student loan part.

Here are four things you should do now, before you make that first student loan payment:

  1. Find out what you owe

Start by tracking down all of your student loans. Just go to StudentAid.gov/login and log in to view your federal student loan balances, interest rate, loan servicer contact information, and more.

Note: Don’t forget to check your personal records to see if you have private student loans as well.

Login

  1. Enroll in a repayment plan that you can afford

If you take no action after you graduate, leave school, or drop below half-time enrollment, you will be automatically enrolled in the 10-Year Standard Repayment Plan. Find out what your monthly payment amount is going to be if you stick with this plan. If you don’t think you can afford that amount, consider switching to an income-driven repayment plan instead.

Income-driven repayment plans are designed to make your student loan debt more manageable by reducing your monthly payment amount to an affordable amount based on your income.

The easiest way to compare the different repayment plans based on your loan amount and income is to use our repayment calculator. Once you log in, the calculator pulls in information about your federal student loans, such as your loan balance and your interest rates, and allows you to estimate what your monthly payment would be under each of our different repayment plans. It also allows you to compare the total amount you will pay for your loan over time and can tell you the amount of loan forgiveness you’re expected to qualify for if you choose one of our income-driven repayment plans:

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Estimate

Once you select a plan, contact your servicer to apply or enroll.

  1. Figure out how to pay

If you have federal student loans, you won’t pay the U.S. Department of Education directly. You will make payments to your loan servicer. Your loan servicer is a company that works on behalf of the U.S. Department of Education to process and manage student loan payments. To find out who your loan servicer is, log in to StudentAid.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

Automatic Debit: The easiest way to pay

If you want to make repaying your student loans as easy as possible, sign up for automatic debit through your loan servicer. If you choose this option, your loan payments will be automatically deducted from your bank account each month, ensuring that your payments are made on time. If that isn’t good enough, you may also qualify for a 0.25% interest rate reduction when you enroll in automatic debit. To enroll in automatic debit, go to your servicer’s website.

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  1. Know who to contact if you need help

If you ever have questions or need help with your student loans contact your loan servicer. Your loan servicer can help you choose a repayment plan, understand loan consolidation, apply for an income-driven repayment plan, and complete other tasks related to your federal student loan. It’s important to remember that you NEVER have to pay for help with your student loans. That’s what your loan servicer is there for. Their help is FREE.

It’s important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

Contact-Servicer

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid.

Top 5 FAFSA FAQs

Got Questions About the FAFSA

Completing the Free Application for Federal Student Aid (FAFSA®) is the first step in accessing the more than $150 billion available in federal student aid. Since the 2015-16 FAFSA launched, the Digital Engagement Team at Federal Student Aid has responded to hundreds of FAFSA questions via Federal Student Aid’s social media accounts. (Yes, believe it or not, we do actually read what you tweet at us or write on our wall and do our best to respond to as much as we can!) In doing this, we’ve found that there are a few FAFSA questions that are asked a lot. We want to help clear up any confusion, so let’s go through them:

Why do I have to pay to complete the FAFSA?

You don’t! You never have to pay to complete the FAFSA. After all, the first “F” in FAFSA stands for FREE! There are companies that will charge you a fee to file your FAFSA, but you can always complete the FAFSA for free on the official government website: fafsa.gov. (Notice the .GOV!) If you need help with the application, we have resources available for free.

How can I complete the FAFSA if my parents or I haven’t filed my 2014 taxes yet?

When filling out the 2015-16 FAFSA, you’ll want to use financial information from the 2014 tax year. At this point in the year, many people haven’t received their Form W-2, let alone completed their 2014 taxes. But that shouldn’t stop you from completing the FAFSA! If you or your parents have not completed your taxes yet, you can estimate your income and other tax return information, and then correct your application after you have filed your taxes.

If your 2014 income is similar to your 2013 income, use your 2013 tax return to provide estimates for questions about your income. If your income is not similar, use the Income Estimator for assistance estimating your adjusted gross income, and answer the remaining questions about your income to the best of your ability.

Note: Once you complete your 2014 taxes, you’ll need to update your FAFSA. When you do so, you may be eligible to use the IRS Data Retrieval Tool to access the IRS tax return information needed to complete the FAFSA, and transfer the data directly into your FAFSA from the IRS website.

When is the FAFSA deadline?

States, schools, and the federal government each have their own FAFSA filing deadlines. It is important that you research all of these deadlines and complete the FAFSA by your earliest deadline. That being said, because some types of aid are awarded on a first-come, first-served basis, it is highly recommended that you fill out the FAFSA as soon as you can to ensure that you do not miss out on available aid.

Do I have to complete the FAFSA every year?

Yes, you need to fill out the FAFSA each school year because your eligibility for financial aid can differ from year to year for various reasons, including your family’s financial situation and the number of your family members enrolled in college. If you filled out a FAFSA last year and want to renew it, go to fafsa.gov, click “Login”, and be sure to select “FAFSA Renewal” once given the option. That way, many of the (nonfinancial) questions will be pre-filled for you. Just be sure to update any information that has changed since last year.

Which FAFSA should I complete?

When you log into www.fafsa.gov, you will be given two different options: “Start a 2014-15 FAFSA” and “Start a 2015-16 FAFSA.” Which should you choose?

If you’ll be attending college between July 1, 2014 and June 30, 2015, select “Start a 2014-15 FAFSA.”

If you’ll be attending college between July 1, 2015 and June 30, 2016, select “Start a 2015-16 FAFSA.”

Remember, you must complete the FAFSA each school year, so if you’ll be attending college during both periods of time, you should fill out both applications.

TIP: If you need to fill out both applications, complete the 2014-15 FAFSA first. That way, when you complete the 2015-16 FAFSA, a lot of your info will automatically roll over.

If you are applying for a summer session, or just don’t know which application to complete, check with the college you are planning to attend.

We hope that helps answer some of your questions. If you have additional questions about the FAFSA, you can send us your questions via Facebook and Twitter. For more information about completing the FAFSA, visit StudentAid.gov/fafsa.

Nicole Callahan is a Digital Engagement Strategist at Federal Student Aid.

7 Common FAFSA Mistakes

  1. Not Completing the FAFSA®

I hear all kinds of reasons: “The FAFSA is too hard,” “It takes to long to complete,” I never qualify anyway, so why does it matter.” It does matter. By not completing the FAFSA, you are missing out on the opportunity to qualify for what could be thousands of dollars to help you pay for college. The FAFSA takes most people 21 minutes to complete, and there is help provided throughout the application. Oh, and contrary to popular belief, there is no income cut-off when it comes to federal student aid.

  1. Not Being Prepared

The online FAFSA has gotten a lot easier over the last few years. We’ve added skip logic, so you only see questions that are applicable to you. There is also an option to import your tax information from the IRS directly into the FAFSA application. But, the key to making the FAFSA simple is being prepared. You’ll save yourself a lot of time by gathering everything you need to complete the FAFSA before you start the application.

  1. Not Reading Carefully

You’re on winter break and probably enjoying a vacation from reading for a couple weeks. I get it. But when it comes to completing the FAFSA, you want to read each question carefully. Too many students see delays in their financial aid for simple mistakes that could have been easily avoided.

Don’t rush through these questions:

  • Your Number of Family Members (Household size): The FAFSA has a specific definition of how your or your parents’ household size should be determined. Read the instructions carefully. Many students incorrectly report this number.
  • Amount of Your Income Tax: Income tax is not the same as income. It is the amount of tax that you (and if married, your spouse) paid on your income earned from work. Your income tax amount should not be the same as your adjusted gross income (AGI). Where you find the amount of your income tax depends on which IRS form you filed.

Tip: If you use the IRS Data Retrieval Tool, this number will be pulled for you, directly from your income tax return.

  • Legal Guardianship: One question on the FAFSA asks: “As determined by a court in your state of legal residence, are you or were you in legal guardianship?” Many students incorrectly answer “yes” here. For this question, the definition of legal guardianship does not include your parents, even if they were appointed by a court to be your guardian. You are also not considered a legal guardian of yourself.
  1. Inputting Incorrect Information

The FAFSA is an official government form. You must enter your information as it appears on official government documents like your birth certificate and social security card. Examples:

  • Entering the Wrong Name (Yes, I’m serious): You wouldn’t believe how many people have issues with their FAFSA because they entered an incorrect name on the application. It doesn’t matter if you’re Madonna, or Drake, or whatever Snoop Lion is calling himself these days. You must enter your full name as it appears on official government documents. No nicknames.
  • Entering the Wrong Social Security Number (SSN): When we process FAFSAs, we cross check your social security number with the Social Security Administration. To avoid delays in processing your application, triple check that you have entered the correct SSN. If you meet our basic eligibility criteria, but you or your parents don’t have a SSN, follow these instructions.
  1. Not Reporting Parent Information

Even if you fully support yourself, pay your own bills, file your own taxes, you may still be considered a dependent student for federal student aid purposes, and therefore, you’ll need to provide parent information on your FAFSA. Dependency guidelines for the FAFSA are determined by Congress and are different from those of the IRS. Find out whether or not you need to provide parent information by answering these questions.

Bonus: Who is my parent when I fill out the FAFSA?

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  1. Not Using the IRS Data Retrieval Tool

For many, the most difficult part about filling out the FAFSA is entering in the financial information. But now, thanks to a partnership with the IRS, students and parents who are eligible can automatically transfer the necessary tax info into the FAFSA using the IRS Data Retrieval Tool. This year, the tool will launch on February 1, 2015. In most cases, your information will be available from the IRS two weeks after you file. It’s also one of the best ways to prevent errors on your FAFSA and avoid any processing delays.

Tip: If you used income estimates to file your FAFSA early, you can use the IRS Data Retrieval Tool to update your FAFSA two weeks after you file your 2014 taxes.

  1. Not Signing the FAFSA

So many students answer every single question that is asked, but fail to actually sign the FAFSA with their PIN and submit it. This happens for many reasons, maybe they forgot their PIN, or their parent isn’t with them to sign with the parent PIN, so the FAFSA is left incomplete. Don’t let this happen to you. If you don’t have or don’t know your PIN, apply for one. If you would like confirmation that your FAFSA has been submitted, you can check your status immediately after you submit your FAFSA online.

Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

5 Reasons You Should Complete the Free Application for Federal Student Aid

Did you hear? The 2015-16 FAFSA became available on January 1, 2015! Fill it out: fafsa.gov

If you will be attending college between July 1, 2015 and June 30, 2016, you should complete the FAFSA. Here are some reasons why:

It’s FREE!

The FAFSA is free to complete and there is help provided throughout the application. Several websites offer help filing the FAFSA for a fee. These sites are not endorsed by the U.S. Department of Education. We urge you not to pay for assistance that you can get for free at the official government website: fafsa.gov.

It’s easier than ever.

We’ve done a lot over the past few years to simplify the FAFSA. One of the most exciting enhancements has been the launch of the IRS Data Retrieval Tool. The tool allows students and parents to access the required information from their IRS tax return to complete the FAFSA, and transfer the data directly into their FAFSA from the IRS website with just a few clicks. This year, the IRS Data Retrieval Tool will launch on February 1, so be on the lookout for that. Also, for those who have completed the FAFSA in the past, when you go to renew your FAFSA for the upcoming school year, a lot of your information will automatically roll over, saving you lots of time.

It takes less than 21 minutes to complete.

Did you know that, on average, it takes less than 21 minutes to complete the FAFSA? That’s less time than it would take you to watch your favorite TV show! And think of the benefits! Spend 21 minutes completing the application and you could qualify for thousands of dollars in financial aid. Talk about return on investment…

More people qualify than you’d think.

If you don’t fill out the FAFSA, you could be missing out on a lot of financial aid! I’ve heard a number of reasons students think they shouldn’t complete the FAFSA. Here are a few:

  • “I (or my parents) make too much money, so I won’t qualify for aid.”
  • “Only students with good grades get financial aid.”
  • “The FAFSA is too hard to fill out.”
  • “I’m too old to qualify for financial aid.”

These are all myths about financial aid. The reality is, EVERYONE should fill out the FAFSA! Don’t leave money on the table.

You may need it to apply for state and college financial aid and even private scholarships!

Completing the FAFSA is the first step toward getting financial aid for college, career school, or graduate school. The FAFSA not only gives you access to the $150 billion in grants, loans, and work-study funds that the federal government has available, but many states, schools, and private scholarships require you to submit the FAFSA before they will consider you for any financial aid they offer. That’s why it’s important that every college-bound student complete the FAFSA. You’ll never know what you get unless you apply.

For information and tips on completing the FAFSA, visit StudentAid.gov/fafsa.

Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

6 Steps to Filling Out the FAFSA

Need to fill out the FAFSA® but don’t know where to start? We’re here to help. You’ve already done the hard part and gathered all of the necessary information, so now it’s time to complete the FAFSA. Let us walk you through it step by step: 

  1. Go to fafsa.gov. One thing you don’t need in order to fill out the FAFSA? Money! Remember, the FAFSA is FREE when you use the official .gov site: fafsa.gov.
  2. Choose which FAFSA you’d like to complete. The new FAFSA that becomes available on January 1, 2015, is the 2015–16 FAFSA. You should complete the 2015-16 FAFSA if you will be attending college between July 1, 2015 and June 30, 2016. Remember, the FAFSA is not a one-time thing. You must complete your FAFSA each school year.

Note: The 2014–15 FAFSA is also available if you will be attending college between July 1, 2014 and June 30, 2015, and you haven’t applied for financial aid yet.

  1. Enter your personal information.* This is information like your name, date of birth, etc. If you have completed the FAFSA in the past, a lot of your personal info will be pre-populated to save you time. Make sure you enter your personal information exactly as it appears on official government documents. (That’s right, no nicknames.)
  2. Enter your financial information.* All of it. You should use income records for the tax year prior to the academic yearfor which you are applying. For example, if you are filling out the 2015–16 FAFSA, you will need to use 2014 tax information. If you or your parent(s) haven’t filed your 2014 taxes yet, you can always estimate the amounts using your 2013 tax return; just make sure to update your FAFSA once you file your 2014 taxes. Once you file your taxes, you may be able to automatically import your tax information into the FAFSA using the IRS Data Retrieval Tool. It makes completing the FAFSA super easy!
  3. Choose up to 10 schools to which you wish to apply, and we will send the necessary information over to them so they can calculate the amount of financial aid you are eligible to receive. Make sure you include any school you plan to attend, even if you’re not sure yet. This will prevent your financial aid from being delayed. If you’re applying to more than 10 schools: http://1.usa.gov/1mHPD1F
  4. Sign the document with your PIN.* The PIN serves as your electronic signature, or e-signature. You’ll use it to electronically sign and submit your FAFSA. If you don’t have a PIN, you’ll need to get one. If you’ve completed the FAFSA in the past, you probably already have a PIN. You can use the same PIN you used in the past to renew your FAFSA each school year, so keep it in a safe place. If you have forgotten your PIN, you can retrieve it. If you’re considered a dependent student, at least one of your parents or your legal guardian will need a PIN as well. If you or one of your siblings have completed the FAFSA within the last 18 months, your parent(s) will use the same PIN they used before. If not, your parent(s) may need to apply for a new PIN.

*If you are considered a dependent student, your parent(s) will also need to do this.

I’m finished. What’s next?

That’s it. You’ve filled it out. We told you it wasn’t so bad. With the hard part over, check out this page to learn what you should do next.

Still have questions?

We’re here to help. Connect with us: StudentAid.gov/social.

Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

7 Things You Need Before You Fill Out the FAFSA®

If you need financial aid to help you pay for college, it’s important that you complete the Free Application for Federal Student Aid (FAFSA®). The good news? The FAFSA is simpler than ever! Did you know that, on average, it only takes 21minutes complete? That’s less time than it takes to watch an episode of your favorite TV program, so no excuses about not having the time. Record that TV show and watch it later.

The 2015­­–16 FAFSA becomes available on January 1, 2015, at 12 a.m. Central Time. You can fill it out for FREE on the official government site, fafsa.gov. To speed up the FAFSA process, get prepared early. Here is what you’ll need to fill out the FAFSA:

  1. Your Federal Student Aid PIN* — In order to sign your FAFSA electronically, you’ll need a Federal Student Aid PIN. You can help to prevent processing delays by getting a PIN before you begin the FAFSA. Find out how to get a PINand what to do if you forgot your PIN. It only takes a minute.
  2. Your social security number* — If you don’t know it, it can be found on your social security card. If you don’t have access to that, it may be on your birth certificate or permanent resident card. If you don’t have one of those, or don’t know where it is, ask your parent or legal guardian. If you’re a dependent student, you’ll need their help with portions of the FAFSA anyway. If you are not a U.S. citizen, but meet Federal Student Aid’s basic eligibility requirements, you’ll need your Alien Registration Number.
  3. Your driver’s license number — If you don’t have a driver’s license, then don’t worry about this step.
  4. Your tax records* — Use income records for the tax year prior to the academic yearfor which you are applying: so if you are filling out the 2015–16 FAFSA, you will need 2014 tax information. If you haven’t filed your taxes yet, you can always estimate the amounts using your 2013 tax return, just make sure to update your FAFSA once you file your 2014 taxes. Once you file your 2014 taxes, you may be able to automatically import your tax information into the FAFSA using the IRS Data Retrieval Tool.
  5. Records of your untaxed income* — This includes a whole bunch of variables that may or may not apply to you, like child support received, interest income and veterans non-education benefits. Parents can find specific details here. Students can find details here.
  6. Records of all your assets (money)* — This includes savings and checking account balances, as well as investments like stocks and bonds and real estate.
  7. List of the school(s) you are interested in attending — The schools you list on your FAFSA will automatically receive your FAFSA results electronically. They will use your FAFSA information to determine the types and amounts of financial aid you may receive. You can list up to 10 schools on your FAFSA. If you’re applying to more than 10 schools, you can add more later. Be sure to list any school you’re considering, even if you’re not sure yet.

*If you’re a dependent student, you will need this information for your parent(s) as well.

Still have questions?

We’re here to help. Connect with us: StudentAid.gov/social.

Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.

5 Ways to Pay Off Your Student Loans Faster

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The first thing people say when they find out where I work: “Can you delete my student loans for me?”

If only I had that power. Just like many of you, I am a student loan borrower. Each month, my federal student loan servicer, withdraws my $381.35 student loan payment from my bank account and I still cringe every time. (Do you know how many trips I could take with that money?) Point is, I understand what you’re going through.

That said, there are manageable ways to pay off your student loans faster than you had planned and save yourself money by doing so!

Here are some ideas:

1) Pay Right Away Even though you’re usually not required to, consider making student loan payments during your grace period or while you’re still in school. If you’re short on cash, consider at least paying enough each month to cover the amount of interest you’re accruing. That way your interest doesn’t capitalize and get added to your principal balance. Not doing this was one of the biggest mistakes I made with my student loans.

2) Sign up for Automatic Debit If you sign up for automatic debit, your student loan servicer will automatically deduct your student loan payment from your bank account each month. Not only does this help ensure that you make payments on time, but you may also be able to get an interest rate deduction for enrolling. Contact your loan servicer to see if your loan is eligible for this benefit.

3) Pay More than Your Minimum Payment Even if it’s $5 a month!  Paying a little extraeach month can reduce the interest you pay and reduce your total cost of your loan over time. (Pay attention! This next part is important!) If you want to ensure that your loan is paid off faster, make sure you tell your loan servicer that the extra amount you’re paying is not intended to be put toward future payments. If given the option, ask your servicer if the additional payment amount can be allocated to your higher interest loans first.

4) Use Your Tax Refund One easy way to pay off your loan faster is to dedicate your tax refund to paying off some of your student loan debt. Part of the reason you may have gotten a refund in the first place is because you get a tax deduction for paying student loan interest. Might as well be smart about the way you spend it.

5) Seek Out Forgiveness and Repayment Options There are a number of situations under which you can have your federal student loan balance forgiven. There are forgiveness and repayment programs for teachers, public servants, members of the United States Armed Forces, and more. Most of these programs have very specific eligibility requirements, but if you think you might qualify, you should definitely do some research. Also, research whether your employer offers repayment assistance for employees with student loans. There are many who do!

Nicole Callahan is a Digital Engagement Strategist at The U.S. Department of Education’s office of Federal Student Aid. She is scheduled to finish repaying her student loans in 2021, but is hoping that by taking her own advice, she will finish much faster.

How to Decide Which Income-Driven Repayment Plan to Choose

If your student loan payments are high compared to your income, you may be eligible to switch your repayment plan to one that calculates your monthly payment based on your income and family size.

TIP: If you are seeking Public Service Loan Forgiveness, you should repay your federal student loans under an income-driven repayment plan.

If you need to make lower monthly payments, one of the three following income-driven plans may be right for you:

  • Income-Based Repayment Plan (IBR)
  • Pay As You Earn Repayment Plan (PAYE)
  • Income-Contingent Repayment Plan (ICR)

What’s the difference between the three plans?

While there are other minor differences between these three repayment plans, these are four significant ways they differ:

You can compare the high-level differences below:

IDR-Chart-Final

It’s also important to note that your loan types must also be eligible to be repaid under an income-driven plan.

How do I decide which income-driven repayment plan to choose?

1) See which plans you qualify for. Not everyone qualifies for an income-driven repayment plan. You can use our Repayment Estimator to estimate your payment amount for all repayment plans, including income-driven plans.

    • Check and see whether the types of federal student loans you have are eligible. In some cases, you may need to consolidate your student loans in order to be able to repay the loan(s) under an income-driven plan or the income-driven repayment plan that offers the lowest monthly payment.
    • If you’re considering our IBR or PAYE, you’ll need to make sure you meet the debt-to-income ratio requirement. To qualify, the payment that you would be required to make under the IBR or PAYE (based on your income and family size) must be less than what you would pay under the Standard Repayment Plan with a 10-year repayment period. Generally, you will meet this requirement if your federal student loan debt is higher than your annual discretionary income or represents a significant portion of your annual income.

2) Compare Plans Based on YOUR Circumstances. Using our repayment estimator, you can estimate your monthly payment amount, repayment period, projected loan forgiveness, and the total interest you’ll pay over the life of your loan. Just log in using your Federal Student Aid PIN, enter basic information about your income, family size, tax filing status, and state of residence and out pops a comparison based on your individual circumstances. You can also view the comparison in graph format!

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3) Weigh the Pros and Cons. Income-driven repayment plans may lower your federal student loan payments. However, whenever you make lower payments or extend your repayment period, you will likely pay more in interest over time—sometimes significantly more. In addition, under current Internal Revenue Service (IRS) rules, you may be required to pay income tax on any amount that is forgiven if you still have a remaining balance at the end of your repayment period.

Before you apply for an income-driven repayment plan, contact your loan servicer with any questions. Your loan servicer will help you decide whether one of these plans is right for you.

I’ve decided which income-driven plan is right for me. How do I apply?

If you decide that an income-driven repayment plan is right for you, there are a few steps you need to take. To apply, you must submit an application called the Income-Driven Repayment Plan Request. You can submit the application online at StudentLoans.gov or on a paper form, which you can obtain from your loan servicer. Along with the application, you’ll need to provide income information. Find out more information about the documentation you must provide.

FACT: The application allows you to select an income-driven repayment plan by name, or request that your loan servicer determine what income-driven plan or plans you qualify for, and to place you on the income-driven plan with the lowest monthly payment amount.

Is there anything else I should know about choosing an income-driven repayment plan?

      • You must provide updated documentation each year You must provide your loan servicer with updated income documentation and certify your family size on the Income-Driven Repayment Plan Request each year, generally around the same time of the year that you first began repayment under the income-driven plan that you selected. It’s important for you to provide the required information by the annual deadline specified by your loan servicer. If you miss the deadline, you’ll remain on the same income-driven repayment plan, but your monthly payment will no longer based on your income (this means your payment will increase).
      • Your payment amount can change from year to year. Your required monthly payment amount may increase or decrease if your income or family size changes from year to year.

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid.

Avoid These 4 Mistakes I Made With My Student Loans

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It’s been tough for me to come to terms with, but, unfortunately for me, I am not in college anymore. In fact, this spring marked three years since I graduated from college and went into repayment on my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known when I was graduating and getting ready to start repaying my student loans:

1. I should have kept track of what I was borrowing

Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that the money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my loan balance, I was pretty shocked.

You can avoid this problem. Had I known there was a super easy way to keep track of how much I’d borrowed in federal student loans, I would have been much better off. You can view all your federal student loans in one place by going to StudentAid.gov/login.

2. I should have made interest payments while I was still in school

If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans was not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.

3. I should have kept my loan servicer in the loop

If you’re getting ready to graduate or have graduated recently and haven’t heard from your loan servicer, make sure you check that your loan servicer has up-to-date contact info for you. When I graduated and moved into my first big-girl apartment, I forgot to change my address with my loan servicer. I found out that all of my student loan correspondence was going to my mom’s address. I hadn’t even thought to update my loan servicer with my new contact information. Don’t make the same mistake I did. Keep your servicer informed of address, email, and phone changes.

4. I should have figured out what my monthly loan payments were going to be BEFORE I went into repayment

By the time my grace period was over, I had a decent idea of how much I had borrowed in total, but I had no idea what my monthly payments would be. I thought I was fine. I had started my new job and been paying rent and other bills for about six months. Then my grace period ended, and I got my first bill from my loan servicer. It was definitely an expense I hadn’t fully taken into account.

Don’t make the same mistake. Federal Student Aid has an awesome repayment estimator that allows you to pull in your federal student loan information and compare what your monthly payments would be under the different repayment plans that are offered. That way, you can choose the right repayment plan, know how much you can expect to pay monthly, and budget accordingly … unlike me.

I’ll be the first to admit that this whole process can be a little overwhelming, especially when you’re new at it. But just remember, your loan servicer is there to help you. If you need advice or have questions about your student loans, don’t hesitate to contact your loan servicer. Their assistance is FREE!

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid.

6 Things You MUST Know About Repaying Your Student Loans

When it comes to repaying your federal student loans, there’s a lot to consider. By taking the time to understand the details of repayment, you can save yourself time and money.

REMEMBER: You never have to pay for help with your federal student loans. If you have any questions at all, contact your servicer. They provide FREE help.

This should help you get started.

When do I begin repaying my federal student loans?

You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. Many federal student loans will even have a grace period. The grace period gives you time to get financially settled and to select your repayment plan. Note that for most loans, interest will accrue during your grace period.

Your loan servicer or lender will provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.

Whom do I pay?

You will make your federal student loan payments to your loan servicer*, not the U.S. Department of Education (ED) directly. ED uses several loan servicers to handle the billing and other services on federal student loans. Your loan servicer can work with you to choose a repayment plan and can answer any questions you have about your federal student loans. It’s important to maintain contact with your loan servicer and keep your servicer informed of any changes to your mailing address, e-mail, or phone number so they know where to send correspondence and how to contact you. How much do I need to pay?

Your bill will tell you how much to pay. Your payment (usually made monthly) depends on

  • the type of loan you received,
  • how much money you borrowed,
  • the interest rate on your loan, and
  • the repayment plan you choose.

You can use our repayment estimator to estimate your monthly payments under different repayment plans to determine which option is right for you. Just remember, if you would like to switch repayment plans, you must contact your loan servicer.

How do I make my student loan payments?

There are several ways you can submit payments to your loan servicer, including options to submit your payment online through your loan servicer’s website.

TIP: Your servicer may offer the option to have your payments automatically withdrawn from your bank account each month. You may want to consider this option so you don’t forget to make your payments.

What should I do if I’m having trouble making my student loan payments?

Contact your loan servicer as soon as possible. You may be able to change your repayment plan to one that will allow you to have a longer repayment period or to one that is based on your income. If switching repayment plans isn’t a good option for you, ask your loan servicer about your options for loan consolidation or a deferment or forbearance.

Note: Several third-party companies offer student loan assistance for a fee. Most of these services can be obtained for free from your loan servicer.

What happens if I don’t make my payments?

Not making your student loan payments can result in default, which negatively impacts your credit score. This may affect your ability to borrow for things like buying a car or purchasing a home. Your tax refunds may also be withheld and applied to your outstanding student loan debt. There is never a reason to default. The Department of Education offers several options to ensure that you can successfully manage your student loans. If you’re feeling overwhelmed or having difficulty making payments, contact your loan servicer for help.

*If you are repaying federal student loans made by a private lender (before July 1, 2010), you may be required to make payments directly to that lender.

Nicole Callahan is a digital engagement analyst at the Department of Education’s office of Federal Student Aid.

4 Things You Should Do Before Repaying Your Student Loans

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One perk of having a federal student loan instead of a private student loan is that you are not required to start making payments right away. In fact, many federal student loans have a grace period*, or a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repaying your student loans. For most student loans, the grace period is 6 months but in some instances, the grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.

For those of you who graduated in the spring, you’re probably nearing the end of your grace period. Your loan servicer, a company that works on behalf of the U.S. Department of Education to process and manage student loan payments, has probably contacted you letting you know how the repayment process will work and when your first payment is due.

Here are four things you should do now, before you make that first student loan payment:

  1. Get Organized

Start by tracking down all of your student loans. Did you know that you can view all your federal student loans in one place?

Just log into StudentAid.gov/login using your Federal Student Aid PIN to view your loan balances, interest rate, loan servicer contact information, and more.

Note: Don’t forget to check your personal records to see if you have private student loans.

  1. Contact Your Loan Servicer

Your loan servicer is the company that will be collecting payments on your federal student loan on behalf of the U.S. Department of Education. They are also there to provide support. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it’s important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

To find out who your loan servicer is, log in to StudentAid.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

  1. Estimate Your Monthly Payments Under Different Repayment Plans

Federal Student Aid has a great repayment calculator that allows you to compare our different repayment plan options side by side. Once you log in, the calculator pulls in information about your federal student loans, such as your loan balance and your interest rates, and allows you to estimate what your monthly payment would be under each of our different repayment plans. It also allows you to compare the total amount you will pay for your loan over time and can tell you the amount of loan forgiveness you’re expected to qualify for if you choose one of our income-driven repayment plans. Try it!

  1. Select the Repayment Plan That Works for You

One of the greatest benefits of federal student loans is the flexible repayment options. Take advantage of them! Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially change your repayment plan.

* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.

Nicole Callahan is a digital engagement analyst at the Department of Education’s office of Federal Student Aid.