Student lending

Student loan repayment and debt relief: Our guide for New Yorkers

If you took out loans to pay for your education, you are in good company: More than 40 million Americans have outstanding student loans. Many people are struggling to make payments. But student debt doesn’t have to control your life. Learn more about the many resources that can help you navigate your student loans. Find the repayment path that is right for you. 

For more information on student loan management, see these resources from other agencies and organizations:  

• U.S. Department of Education (ED): Federal Student Aid (FSA) is an office of ED that provides information and resources on student loans.
  • FSA Information Center, 1-880-4FED-AID (1-880-433-3243), TDD 1-800-730-8913
• U.S. Consumer Financial Protection Bureau : General information on student loans including loan repayment.
• New York State Higher Education Services Corporation: New York’s higher education student financial aid agency, HESC processes grant, scholarship, and loan applications, and awards financial aid packages to New Yorkers. 
• Student Loan Borrower Assistance: This resource is provided by the National Consumer Law Center.
• Education Debt Consumer Assistance Program (EDCAP): EDCAP provides free student loan information and resources for New York borrowers, including free personalized advice.

Student loan basics

It's important to understand the basics of your loans. Here is an introduction to key terminology and questions to help you navigate your student loans. 

We frequently reference the Education Debt Consumer Assistant Project (EDCAP), a nonprofit organization that provides free resources and guidance to New Yorkers with student debt. 

Key terms to know

The Consumer Financial Protection Bureau offers a list of key student loan terms.

The difference between federal loans and private loans

Most student loan debt in the United States is from federal loans. These loans are issued by the federal government and serviced by companies that contract with the government. 

Private loans are issued and serviced by entities unaffiliated with the federal government, like banks, credit unions, or state-based organizations. 

Federal and private loans have some important differences. For example:

• Federal loans are made with a fixed interest rate, whereas private loans can carry variable interest rates, which means the interest rate will change over time. 
• Certain repayment or forgiveness options are available only for federal loans. 
• Private loans generally have higher interest rates than federal loans. 
• Private loans usually require the borrower to have a co-signer. 

The National Student Loan Data System (NSLDS) lists all your federal loans; it does not list private loans. To find out whether a loan is a federal or a private loan, log on to the NSLDS website with your FSA ID. 

If your loan is not listed on NSLDS, it is most likely a private loan. There are some exceptions: Some borrowers have reported that Perkins loans – a type of federal loan serviced by the borrower’s school – are not listed on NSLDS. There is no central database like NSLDS for private student loan information.  

The information we offer here mostly addresses federal loans. For questions about private loans, including how to make repayment more affordable, read resources like EDCAP’s page on managing private student loans, or contact your loan servicer.   

Many types of federal loans

Student loans can feel complicated and confusing because there are so many different types of federal loans. Some repayment plans are available for certain types of loans but not others. In addition, different types of loans can have different payment terms. To add to the confusion, you might have different obligations and opportunities if you are a co-signer or if you have taken out loans as a parent of a student. 

It's important to know what kinds of federal loans you have so you can get complete information and make informed decisions about navigating your loans. If you do not know what kind of loans you have, contact your servicer or the FSA Information Center at 1-800-433-3243. 

Communications from your servicer

Your loan servicer will likely communicate with you mostly or entirely through the mail. Promptly open and fully read any paper communication you receive from your student loan servicer: There might be important and time-sensitive information inside. Some servicers will communicate with you by email, telephone, or text message, but they will do this only if you agree to receive paperless communications. 

If you receive any communication about your student loans from a sender you don’t recognize, read the communication very carefully – it might be a scam! Third-party debt relief scammers have taken advantage of confusion around the 2023 return to repayment. Many borrowers report receiving letters from companies that turn out to be scammers. For more information on third-party debt relief scams, please see student loan scams.

Student loan repayment

Paying back your student loans can be overwhelming, but there are many different paths through repayment. Learn which might be right for you. Here, we offer information about federal loan repayment options and resources to help you navigate the process. 

We frequently reference the Education Debt Consumer Assistant Project (EDCAP), a nonprofit organization that provides free resources and guidance to New Yorkers with student debt. 

Overview of federal loan repayment options

You can choose a repayment plan for your student loans. Plans have many different features, so think carefully about what makes the most sense for you and your finances. If your circumstances change after you enter repayment, you have the right to switch to a different payment plan (although some plans might not be available to you). 

There are two types of federal student loan repayment plans: 

• Income-driven repayment (IDR) plans, in which your income affects the calculation of your monthly payment.
• Traditional plans, in which your monthly payment is determined only by the amount of debt and the repayment term.

IDR plans typically have lower monthly payments but take longer to pay down. Traditional plans often (but not always) feature higher monthly payments but shorter repayment terms. 

On this page, we offer information about different types of IDR plans and traditional plans. 

To get an overview of how IDR plans compare to traditional plans, consult FSA’s page on repayment plans or use the loan simulator to see what your payments might be on different plans. You can also visit EDCAP’s page on repayment plan options.

By default, loan servicers will enroll borrowers in the Standard Repayment Plan (see the Traditional repayment plans section on this page for more information).  

Income-driven repayment (IDR) plans  

An IDR plan bases the amount of your monthly student loan payment on your income and family size. Monthly payment amounts are generally a percentage of your discretionary income (the difference between your income and the poverty guideline for your situation). Each year, you must update your income and family size through a process called “recertification.” By the end of the repayment period for your IDR plan, any remaining balance that you have not paid off is forgiven. To learn more about forgiveness, please visit our section on student loan forgiveness.

IDR plans include:

• Saving on a Valuable Education (SAVE): SAVE, the newest IDR plan, gives most (but not all) borrowers the lowest possible monthly payments. This plan includes an interest benefit that prevents principal from growing. In addition, beginning in February 2024, if you are on SAVE and you originally borrowed less than $12,000, your loans might be forgiven after as little as 10 years of repayment. Visit FSA’s SAVE page for more information and to apply. 
• Pay As You Earn (PAYE): This plan is available only to a certain subset of borrowers. It will be unavailable to new participants as of July 2024.
• Income-Based Repayment (IBR): This plan features higher monthly payments than SAVE for most (but not all) borrowers. IBR includes a monthly payment cap: Borrowers on IBR will never pay more each month than they would on the Standard Repayment Plan.
• Income-Contingent Repayment (ICR): This plan does not include a monthly cap: Your monthly payment on ICR might be higher than the standard monthly repayment on a 10-year term. ICR might be attractive if you want to down your loan balance quickly.

For more detailed information on IDR: 

• Consult FSA’s income-driven repayment plans page. 
• Use EDCAP’s compare IDR plans tool to see how the IDR plans are different. 
• It’s important to use concrete numbers when trying to decide what plan is right for you: Call FSA’s Information Center (1-880-4FED-AID (433-3243), TDD 1-800-730-8913) to find out what your payment amount would be on each plan. 
• You can also schedule an appointment with EDCAP for a free counseling session to discuss your options.

Traditional repayment plans

Traditional repayment plans (also called fixed payment repayment plans) do not take your income into account. These plans base your monthly payment amount on how much you owe, your interest rate, and a fixed time period for repayment. Loan servicers manage traditional repayment plans internally. You do not have to apply for a traditional repayment plan the way you would for an IDR plan.

Traditional repayment plans include:

• Standard Repayment Plan: This plan is the most basic repayment plan for most federal loans. Repayment is calculated over a 10-year term (or a longer term, if you select this plan after consolidating loans) and fixed interest rate. For more information, visit FSA’s Standard Repayment Plan page.
• Graduated Repayment Plan: Monthly payments are initially low and then increase every two years. Early on in this plan, your payments would be lower than on the Standard Plan, but they would be higher by the end of the repayment term. This plan is most beneficial if you currently have a low income but expect your income to increase consistently over time. For more information, visit FSA’s Graduated Repayment Plan page.
• Extended Repayment Plan: This plan has a longer payment term but lower monthly payments. For more information, visit FSA’s Extended Repayment Plan page.

To compare these plans, consult FSA’s page on fixed payment repayment plans or EDCAP’s compare traditional plans tool.

Loan consolidation

Loan consolidation means taking out one new loan to pay back other pre-existing loans. After consolidating, your old loans are paid off in full and you are responsible for making payments on your new loan.

There are many benefits and drawbacks to consolidating your federal loans. Learn more at FSA’s page on consolidating student loans and EDCAP’s comprehensive consolidation guide. As you consider consolidation, we urge you to reach out to an organization like FSA or EDCAP to discuss the specifics of your loans.

It is always free to consolidate federal loans through ED. Be wary of private loan consolidation or refinancing “opportunities!” Many private companies encourage borrowers to use expensive private services, such as:

• Third-party debt relief. Some borrowers receive letters, phone calls, emails, or texts offering to provide loan consolidation through the federal government for a steep fee. These services are scams: Third-party groups unaffiliated with the federal government charge large fees to do something the government will do for free.
• Private consolidation or refinancing. Some private consolidation or refinancing programs are scams that lure borrowers in with low monthly payments, only to later raise interest rates and payments, sometimes dramatically. Other programs might provide attractive terms for certain borrowers – but if you consolidate federal loans into private loans, you could lose loan forgiveness or cancellation opportunities. If you are considering private loan consolidation or refinancing, carefully research whether you will lose certain benefits. Consider reaching out to FSA or EDCAP to discuss your situation.

For more information on possible scams, see student loan scams.

Postponing student loan repayment

If you are experiencing short-term financial difficulties, you might want to postpone making loan payments for a short time. You have two options: deferment and forbearance. These might be good options 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 Peace Corps, or facing a short period of unemployment, deferment could be helpful. Some, but not all, of these circumstances also might qualify for forbearance.

While deferment and forbearance are both types of pauses to your loans, they have different qualification requirements and different results based on your loans and specific circumstances. Keep in mind that interest will continue to accrue under most circumstances and for most types of loans. In addition, months spent in deferment or forbearance likely won’t count toward your IDR or PSLF payment count. Because of the complexity of the issues involved, we strongly recommend you reach out to FSA (1-880-4FED-AID (433-3243), TDD 1-800-730-8913) or EDCAP to discuss your options when considering deferment or forbearance. 

For more information on this topic, visit EDCAP’s page on postponing student loan repayment. Visit FSA’s website to learn more about the eligibility requirements for federal student loan deferment and forbearance. 

Note that deferment and forbearance options under private student loans are determined by the loan servicer, not by the federal government. If you have a private student loan and are worried about making payments, reach out to your servicer as soon as possible to discuss your options. 

Student loan forgiveness

You may be able to have your loans partially or completely forgiven through state and federal programs. 

The terms “forgiveness,” “cancellation,” and “discharge” have different meanings, but all three generally mean that the balance of your loan debt is erased after certain qualifying events. On this webpage: 

• Forgiveness refers to programs based on employment (such as Public Service Loan Forgiveness)
• Discharge refers to events beyond your control (such as your school closing). For more information on discharge, please see our student loan discharge section.

On this webpage, you can learn about income-driven repayment forgiveness, Public Service Loan Forgiveness, Teacher Loan Forgiveness, and state loan forgiveness programs.

We frequently reference EDCAP, a nonprofit organization that provides free resources and guidance to New Yorkers with student debt.

Federal government makes progress on loan forgiveness

In 2022, President Biden proposed forgiving $10,000 of student debt for each borrower ($20,000 for borrowers who received Pell grants) for all borrowers under certain income thresholds. However, the U.S. Supreme Court blocked this plan from moving forward. 

Since then, the government has found other ways to help borrowers manage their student debt. For example, in February 2024, the government discharged $1.2 billion in loans for nearly 153,000 borrowers. Each of these borrowers initially borrowed $12,000 or less, made regular payments for at least 10 years, and was enrolled in the Saving on a Valuable Education (SAVE) plan. Read more about this and previous efforts to forgive loans. 

Forgiveness through income-driven repayment

Under all income-driven repayment (IDR) plans, your remaining loan balance is forgiven if your federal student loans aren’t fully repaid at the end of the repayment period (either 20 or 25 years). You must make 20 or 25 years of regular monthly payments to qualify for forgiveness (240 or 300 qualifying payments). However, IDR forgiveness only applies to certain types of loans. 

The U.S. Department of Education (ED) is working to expand IDR forgiveness to as many borrowers as possible. For example, if you are on the SAVE plan, initially borrowed less than $12,000, and have made payments for at least 10 years, you might qualify for forgiveness right away, beginning in summer 2024.

Learn more about IDR forgiveness at the Federal Student Aid’s IDR forgiveness page or reach out to EDCAP.

In addition, payments made on loans that previously did not qualify for IDR forgiveness could be counted if borrowers take action to consolidate their loans and get on an IDR plan. Please see the section below on IDR account adjustment for more information.

IDR account adjustment

In April 2022, the government announced a program called IDR account adjustment. Under this program, ED will credit your account for any time spent in repayment, even if you were not on an IDR plan at that time. Under certain circumstances, ED will also credit your account for time spent in deferment and forbearance.

IDR account adjustment is most beneficial if you have loans on different repayment timelines (for example, undergraduate and graduate loans) or loans that previously did not qualify for forgiveness, such as Perkins, Health Education Assistance (HEAL), and Federal Family Education (FFEL) loans. These are not federal Direct Loans. In the past, payments made on these loans did not count toward IDR forgiveness or PSLF. But, if you have any of these loans and you consolidate them into one federal Direct Loan by the deadline of June 30, 2024, and apply for an IDR plan, ED will automatically apply IDR Account Adjustment to your payment count. You will then receive credit for each qualifying monthly payment made for the lifetime of the loans.

For example:

• Betty Borrower took out a FFEL loan in 1998 and made regular monthly payments on that loan and her other federal loans for the next 24 years.
• In January 2024, Betty learned about IDR Account Adjustment. Betty applied for and received a loan consolidation. Instead of a FFEL loan and other federal loans, Betty now has one consolidated Direct Loan.
• Betty considers her IDR options and selects the SAVE plan.
• When IDR Account Adjustment is applied to Betty’s account later in 2024, it will show that she has already made at least 20 years of qualifying payments. That means Betty’s remaining loan balance will be automatically forgiven!

IDR Account Adjustment applies to IDR plans that require 240 or 300 qualifying payments, as well as to PSLF, which only requires 120 qualifying payments.

For some borrowers, IDR Account Adjustment will bring them years closer to loan forgiveness or result in the immediate forgiveness of their loans. But, to get this benefit, borrowers with loans that otherwise don’t qualify must apply for loan consolidation by June 30, 2024.

For more information on IDR account adjustment, visit FSA’s IDR account adjustment page or EDCAP’s loan consolidation guide. 

Public service loan forgiveness

Public Service Loan Forgiveness (PSLF) provides loan forgiveness if you have made 120 qualifying payments on your federal loans while working in public service. Qualifying positions include federal, state, and local government positions, as well as jobs at not-for-profit organizations based in the U.S. 

PSLF is available only if you are on an IDR plan or the 10-year Standard Repayment Plan, and it is only available for certain types of loans. Also, from time to time you must certify that your employment qualifies.

For more detailed information on PSLF, consult FSA’s PSLF page or EDCAP’s resources on getting Public Service Loan Forgiveness.

In 2024, the government is providing a brief window during which you can receive credit toward PSLF forgiveness from payments you made that otherwise might not qualify. See the following section on IDR account adjustment for more information.

For more detailed information on specific plans, visit the resources on this page. To compare these plans, consult FSA’s page on fixed payment repayment plans or EDCAP’s compare traditional plans tool.

Teacher loan forgiveness

Under the Teacher Loan Forgiveness (TLF) program, if you teach full time for five complete and consecutive academic years in a low-income school or educational service agency, and meet certain other qualifications, you might be eligible for up to $17,500 of loan forgiveness. For more information on TLF, please consult FSA’s Teacher Loan Forgiveness page. 

Perkins loan forgiveness

A Perkins loan is issued by the federal government but serviced by your educational institution. There is a specific type of loan forgiveness available if you have a Perkins loan and work in certain industries or have certain characteristics. Consult FSA’s federal Perkins loan cancellation and discharge page for more information. 

Note that, if you consolidate a Perkins loan into other federal loans, you will no longer be eligible for forgiveness specific to Perkins loans. However, the consolidated loan might qualify for other types of forgiveness such as IDR forgiveness or PSLF.

New York state loan forgiveness programs

New York state offers certain loan forgiveness programs that provide awards if you are in certain types of qualifying employment. These include social workers, farmers, teachers, and lawyers in certain public service positions. 

Note that, while these programs are described as “loan forgiveness,” they are actually awards you receive to allow you to pay down your own loan balances. Please consult the NYS Higher Education Services Corporation’s New York state loan forgiveness page for more information. 

Student loan discharge

Several federal programs offer paths to loan discharge. The terms “forgiveness,” “cancellation,” and “discharge” have some differences, but all three generally mean that the balance of your loan debt is erased after certain qualifying events: 

• Forgiveness usually refers to programs based on employment (such as Public Service Loan Forgiveness).
• Discharge refers to events beyond your control (such as your school closing). 

For more information on forgiveness, see our student loan forgiveness section.

For a comprehensive list of federal loan discharge and cancellation programs, please visit FSA’s student loan forgiveness page.

Our page offers information about some of the bases for federal student loan discharge. 

To learn about discharging private student loans, contact your loan servicer.

On our website, we frequently reference the Education Debt Consumer Assistant Project (EDCAP), a non-profit organization that provides free resources and guidance to New Yorkers with student debt.

Total and permanent disability discharge

If you become totally and permanently disabled, you may qualify for federal student loan discharge. Total and permanent disability discharge requires documentation from the U.S. Department of Veterans Affairs, the Social Security Administration, or an authorized medical professional. For more information, visit FSA’s total and permanent disability discharge page or EDCAP’s disability discharge eligibility page.

Closed school discharge

You may qualify for a closed-school discharge if your school closed while you were enrolled. You could also qualify under other specific circumstances, such as if it closed during your approved leave of absence, or if you withdrew from school and the school closed within 180 days of your withdrawal. If you meet the eligibility requirements, your servicer should automatically send you an application for a closed school discharge.

For more information, visit FSA’s closed school discharge page.

Discharge after being misled by school

You might qualify to have all or some of your loans discharged if your school engaged in certain types of misconduct related to the making of the loan, certified a loan that you were not eligible to receive, or failed to return unpaid funds to the federal government. 

Forgery discharge

If a loan was fraudulently made in your name because your signature was forged or your personal information was used without your permission, you might be eligible for a federal loan discharge. See FSA’s forgery discharge page for more information.  

Discharge in bankruptcy

To learn more about seeking federal student loan discharge in bankruptcy, visit FSA’s discharge in bankruptcy page.  

Student loan scams

Many student loan borrowers receive letters, phone calls, emails, or texts offering to provide debt relief, loan consolidation, or other student-loan-related services – for a price. Remember that a student-loan debt-relief company cannot do anything that you can’t do for yourself – for free. Some companies may make legitimate offers, but many that promise relief are scammers looking to steal your hard-earned money. 

We frequently reference EDCAP, a nonprofit organization that provides free resources and guidance to New Yorkers with student debt. 

Third-party debt relief scams

This is an increasingly common scam. Scammers, often calling themselves “document processing” or “debt relief” companies, contact you and offer loan consolidation for an upfront fee (often $799 or $999) and a recurring monthly payment. Document processing companies often pass themselves off as representatives of the Department of Education (ED), but in reality they are charging huge fees for a process that you could do online for free. The company takes an outrageous up-front fee as well as regular monthly payments while your student loans go unpaid. 

Private refinancing

If you receive offers for private refinancing that sound too good to be true, they probably are! Some borrowers receive offers advertising low monthly payments and low interest rates. But many private refinancing companies raise interest rates and payments over time, sometimes dramatically. Once your federal loans have been consolidated into private loans, it is very difficult or impossible to get the many protections and benefits available for student borrowers through ED. If you receive offers for private refinancing, read the terms and conditions very carefully, and even do outside research on the company making the offer. If you need assistance, you can reach out to ED or  EDCAP to discuss your situation. 

Signs of a scam

Watch out for the following red flags that might indicate a student loan scam:

• You receive a letter, phone call, email, or text message with an offer that you did not ask for.
• The offer promises immediate loan forgiveness or debt cancellation.
• The offer promises very low interest rates.
• You have to pay a fee up front before the company does anything to help you.
• The company charges recurring monthly fees for its services.
• The person contacting you creates a sense of urgency or makes it sound like you have to act right away to get a good deal.
• The person asks for highly sensitive personal information, like your Social Security number or your FSA ID number or password.
• The person claims that they can negotiate a special rate for you on your federal student loans.
• The person pressures you to sign a “third-party authorization” or “power of attorney.”
• The company uses a name or logo that makes it seem as though they are a federal agency or associated with the federal government, but it doesn’t sound like they work for the government.

If you encounter any of these signs of a scam, file a complaint with the Office of the New York State Attorney General.

Quick tips

Here are some tips to help you protect yourself from scams:

• Never give away personal information, like your Social Security number, FSA ID number or password, or any other sensitive information, unless you initiated the phone call and you are completely confident you called the right phone number.
• Many scammers will pretend to be affiliated with ED: 
  • Some scammers use images of the ED seal on written or emailed materials. 
  • Scam callers may claim to work for or be affiliated with ED.
  • If you have any doubts about the authenticity of a letter, email, or phone call claiming to be from ED, call FSA’s Information Center (1-880-4FED-AID (1-890-433-3243), TDD 1-800-730-8913) to speak with someone about your concerns.
• Some borrowers report that scammers already know sensitive information about them. It’s possible that scammers got this information through data breaches at banks, credit reporting agencies, and other institutions. Remember that just because a caller knows some of your information does not mean the caller works for ED! If you have any doubts, hang up and call ED directly. 
• If you receive an offer from a document processing company, search for the company online – you can include key words like “scam” or “complaint.” Often, these searches will yield alerts from law enforcement or complaints from other borrowers who have been the victims of scams. 

If you think you’ve been scammed

You can do any of the following:

• Reach out to the Office of the New York State Attorney General:
  • File a complaint online. 
  • Call us at 1-800-771-7755. 
• Make a fraud report to the U.S. Federal Trade Commission.