Repaying U.S. Federal Loans

After you graduate, leave school, or even drop from AUC below half-time enrollment, you have a period of time before you have to begin repayment. Grace periods vary depending on loan type. You should also immediately submit an online Exit Counseling

Federal Stafford Direct Loan Borrowers - Subsidized and Unsubsidized

After you graduate, leave school, or drop below half-time enrollment you will have six (6) months before you have to begin repayment.  During that period you don't have to pay any principal. If you have an unsubsidized loan then you will be charged interest during the grace period, however, you can either pay the interest or it will be capitalized.

Direct PLUS Borrowers

The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, a graduate student PLUS Loan borrower can defer repayment while the borrower is enrolled at least half-time, and, for PLUS loans first disbursed on or after July 1, 2008, for an additional six months after the borrower is no longer enrolled at least half-time.


Managing Your Loans

Your Loan Servicer

The US Department of Education contracts with several companies to act as loans servicers. Your loan servicer will provide information about repayment and will notify you of the date the loan repayment begins. It is very important that you make your full loan payment on time either monthly (which is usually when you'll pay) or according to your repayment schedule. If you don't, you could end up in default, which has serious consequences.  Your servicer will help you make any changes to your payment plans.  It is important that you always contact your servicer if you ever have trouble keeping up with your loan payments.  You will work together to find a solution so that your loan stays in good standing, even if you need to stop making payments. 

If you can’t afford to make payments you may be eligible for:

You may always choose from different Repayment Plans that is right for you! Each plan has different monthly payment amounts, total repayment amount, and total time to repay.  You can also change from one plan to another in order to make your payments affordable.  Talk to your servicer about different repayment plans or all the options that are available to you!

The U.S. Department of Education's National Student Loan Data Systems (NSLDSSM) provides information on your federal loans including loan types, disbursed amounts, outstanding principal and interest, and the total amount of all your loans. To find contact information for the loans servicer please access NSLDS, go to

For more information and resources about Repayment of Loans please access this Guide

Exit Counseling

A student Direct Loan borrower who is graduating, leaving school or dropping below half time enrollment is required to complete exit counseling. The Direct Loan Exit Counseling provides you with information on how to manage your student loan repayment, including your rights and responsibilities as a borrower.  The counseling tool also gives you a snapshot of how much you have borrowed and an estimate of your monthly payment amount for different payment plans. 

Please complete the Exit Counseling process at using your FSA ID

Exit Counseling Guide

Frequently Asked Questions

What if I don’t pay back my loans?

  • If you stop paying your student loans your loan becomes delinquent and eventually go into default. To default means you failed to make your payments on your student loan as scheduled according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. Default occurs when you become 270 days delinquent in making a payment on your loan(s). When a loan becomes 360 days delinquent the consequences are serious (damaged credit rating, loss of eligibility for further federal student aid, withholding your wages and tax refunds, and legal actions; such as lawsuits and wage garnishment being taken against you). Read more about the consequences of default  here

I have defaulted- what should I do?

  • Contact the agency that is billing you and as them to work with you. Explain the situation fully. Ask what options are available to get out of default.  Find out what they are here.  Stay in constant touch with your lender (loan servicer) or the collection agency.

What does loan delinquency mean?

  • A delinquency period begins on the first day after you miss a payment. If the delinquency goes on for nine months your loan holder will declare you in default.  If borrower’s account have become delinquent and the borrows are unable to make payments, deferments or forbearances should be considered to avoid being in default.

What is a deferment?

  • A deferment is a period during which repayment of the principal and interest of your loan is temporarily delayed. A temporary suspension of a borrower’s monthly loan payment.  Interest doesn't accrue on subsidized federal loans during deferment period. Interest does occur on your unsubsidized loans. If you can afford it, you should consider paying the interest while you are in a deferment.

You can get the following deferments for most loans:

  • In-school deferments for at least half-time study;
  • Graduate fellowship deferments;
  • Rehabilitation training program deferment;
  • Unemployment deferment not to exceed three years;
  • Economic hardship deferment, granted one year at a time for a maximum of three years; and
  • Military deferment.

What is forbearance?

  • If you can't make your scheduled loan payments, but don't qualify for a deferment, your loan servicer may be able to grant you a forbearance. With forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans (including all PLUS loans).  

There are two types of forbearances:

  • Discretionary
  • Mandatory 

Where to send my check?

  • You can always mail your payment on your loans to the Department of Education. Make sure you include your Social Security number visible on the front of your check.

US Department of Education
Direct Loan Payment Center
P.O Box 530260
Atlanta, GA 30353-0260