Loan Repayment

A. Federal Student Loans verses Private Loans – How to Tell the Difference

  • There are two categories of student loans – federal student loans and private student loans. 
  • Your rights and responsibilities are different depending on whether your loan is federal or private.  For example, income-based repayment plans are only available for federal loans. 
  • To find out if a loan is a federal or private loan, log into the National Student Loan Data System (“NSLDS”).  That system lists all of your federal loans.  If you hold a loan that is not listed on NSLDS, that loan is a private loan. 
  • You will need an FSA ID to access NSLDS.  An FSA ID is the user name and password you use on federal aid websites.  If you do not already have an FSA ID, you can create one when logging into the NSLDS system at or  You can also call the Federal Student Aid Information Center at 1-800-4-FED-AID, TDD 1-800-730-8913. 

There is no central database similar to NSLDS for private student loan information.  For questions about private loans, contact your loan servicer. 

B. Federal Loan Repayment  

  • Federal loan borrowers have new options available as a result of recent legislation passed in response to the coronavirus crisis.  
  • Federal loan borrowers have the right to choose among several different repayment plans.
  • Some repayment plans are linked to your income, and can significantly lower your monthly payments.  For example, the “Pay As You Earn” repayment plan caps monthly payments at 10% of your income, extends the term of your loan to up to 20 years, and offers loan forgiveness after 20 years.  If you are not eligible for this plan, you may be eligible for another plan that would also lower monthly payments.
  • Each repayment plan has different eligibility requirements.  For more information on plans and eligibility requirements, visit Repayment Options.
  • For a chart summarizing repayment options/eligibility requirements.
  • For personalized advice on repayment options, visit HESC’s Repayment Plan Advisor.  
  • To change your repayment plan, contact your loan servicer.  If you don’t know who your servicer is, visit My Federal Student Aid to find contact information for the servicer of your loans. 
  • You can find out what your payments would be under each repayment option using this Estimator Tool from the U.S. Department of Education.

C. Private Loan Repayment

  • Contact your loan servicer to discuss possible options to make repayment more affordable.

D. Deferment and Forbearance

In some cases, you may wish to postpone payment of your loan for a short time period.  You may be able to postpone payment by requesting deferment or forbearance.  Details on eligibility requirements for deferment and forbearance for federal loans are described below.  For information related to deferment/forbearance options for private loans, contact your loan servicer. 

Deferment or forbearance can be a good option for you if you are struggling to repay your loans due to a temporary circumstance.  For example, if you are enrolled in school, serving active duty in the military, or facing a short period of unemployment, you may want to consider deferment or forbearance.  However, if you are having problems paying your loan that due to circumstances that may continue for an extended period, a better option may be to consider changing to an income-driven repayment plan.  Income-driven repayment plans can significantly lower your monthly payments and put you on track for loan forgiveness after 20 to 25 years of payments, depending on the plan.     

  1. Deferment is a postponement of payment on a loan.
    • You may qualify for deferment for federal loans if you are:
      - enrolled in an eligible postsecondary school;
      - unemployed or facing economic hardship;
      - receiving public assistance; 
      - active in the Peace Corps; or
      - on active duty service in the U.S. Armed Forces or National Guard.
    • With deferment, interest will not accrue on subsidized loans during the period of deferment.  Interest will accrue during deferment on unsubsidized loans.
    • For more information on deferment, visit Deferment Information.
  2. Forbearance is a suspension of loan payments. 
    • For federal loans, forbearance may be granted if you do not qualify for deferment and you cannot make scheduled payments for reasons such as poor health, financial difficulty, or other circumstances. 
    • During forbearance, interest continues to accrue on your loan whether it is a subsidized or unsubsidized loan.
    • For more information, contact your loan servicer or visit Forbearance Information

E. Loan Consolidation

If you have more than one federal student loan, you can combine your loans into one new loan with one monthly payment.  This is called loan consolidation. 

There are pros and cons to consolidation:

  • One benefit is convenience – you will make one payment each month instead of several. 
  • Your monthly payments may be lower.  Savings from reduced monthly payments allow you to pay other monthly bills with higher interest rates, such as credit cards.
  • A drawback is that the repayment period will be longer, which means you will pay more interest over the life of the loan.
  • Consolidation loans have a fixed interest rate.  That can be either a benefit or a drawback.  If you consolidate variable rate loans, and interest rates drop in the future, you will have locked into a higher rate, and you will pay more interest.  However, if interest rates rise in the future, and you have locked in at a lower rate, you will pay less interest. 
  • Another drawback is that you may forfeit payment incentives/discounts that you are currently receiving.
  • For more information, see Loan Consolidation Information.   

F. Servicemembers 

Service Members can find special information about repayment options, interest rates reduction, loan forgiveness, and military deferment at Service Member Information