Repayment, Forgiveness, Delinquency, and Default


Loan Consolidation

  • If you have multiple student loans you may be able to combine them into one loan with a fixed interest rate based on the average of the interest rates on the loans being consolidated.
  • Through your completion of the free Federal Direct Consolidation Loan Application and Promissory Note, you will confirm the loans that you want to consolidate and agree to repay the new Direct Consolidation Loan.
  • Once the consolidation is complete, you will have a single monthly payment on the new Direct Consolidation Loan instead of multiple monthly payments on the loans you consolidated.

Loan Deferment

  • Student loan deferment allows you to temporarily stop making payments.
  • There are a variety of circumstances that may qualify you for a deferment. They may include the following:
    • Cancer Treatment Deferment
    • Economic Hardship Deferment
    • Graduate Fellowship Deferment
    • In-School Deferment
    • Military Service and Post-Active Duty Student Deferment
    • Parent Plus Borrower Deferment
    • Rehabilitation Training Deferment
  • Deferments are available to Direct Loan, FFEL (Federal Family Education Loan), and Perkins Loan borrowers

Grace Period

  • a time period automatically granted on a loan during which the borrower does not have to pay the issuer any monies toward the loan, and the borrower does not incur any penalties for not paying.
  • Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period.
  • Parent Plus Loans do not have a grace-period
  • Circumstances That May Affect Your Grace Period
      • Active Duty Military
      • Returning to school before the end of your loan’s grace period
      • Loan consolidation

Loan Servicer

  • A company that collects payments, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a lender. If you’re unsure of who your federal student loan servicer is, you can look it up in “My Federal Student Aid.”

Types of Plans

  • Standard Repayment Plan
  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Revised Pay as You Earn Repayment Plan
  • Pay as You Earn Repayment Plan (PAYE)
  • Income- Based Repayment Plan (IBR)
  • Income- Contingent Repayment Plan
  • Income Sensitive Repayment Plan

Go to for more information.

Understanding Loan Forgiveness

  • Forgiveness, cancellation, or discharge of your loan means that you are no longer required to repay some or all of your loan.

Differences Between Forgiveness, Cancellation, and Discharge

  • The terms forgiveness, cancellation, and discharge mean nearly the same thing, but they’re used in different ways.
    • Forgiveness or Cancellation– you’re no longer required to make payments on your loans due to your job.
    • Discharge– you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans.

Types of Forgiveness, Cancellation, and Discharge

  1. Public Service Loan Forgiveness
  2. Teacher Loan Forgiveness
  3. Closed School Discharge
  4. Perkins Loan Cancellation and Discharge
  5. Total and Permanent Disability Discharge
  6. Discharge Due to Death
  7. Discharge in Bankruptcy (in rare cases)
  8. Borrower Defense to Repayment
  9. False Certification Discharge
  10. Unpaid Refund Discharge
  11. Eligibility for Parent Borrowers

Go to for more information.

How to Apply

Contact your loan servicer if you think you qualify. If you have a Perkins Loan, you should contact the school that made the loan or the loan servicer the school has designated.

What is Loan Delinquency and Default

  • Delinquency- A loan is delinquent when loan payments are not received by the due dates. A loan remains delinquent until:
    • you make up the missed payment(s) or
    • receive a deferment or forbearance that covers the period when you were delinquent.

If you are having trouble making your monthly loan payments, you should contact your loan servicer to discuss options to keep the loan in good standing.

  • Default- Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. If you default on a federal student loan, you lose eligibility to receive federal student aid and you may experience serious legal consequences.

Go to for more information.