Print Friendly Version

Managing Federal Student Loans

Please review the following guidelines to help you manage your Federal Student Loans.

Having trouble:  If you're having trouble with loan payments, don't wait—contact your loan servicer immediately! If you don't know which organization(s) are servicing your loan(s), you can research your account information at www.nslds.ed.gov.

If you have already contacted your loan servicer(s) and you still are unable to resolve an issue, you might wish to contact the FSA Office of the Ombudsman, which could help you and the loan servicer communicate better. The FSA Ombudsman can be reached online at www.ombudsman.ed.gov or by phone at 1-877-557-2575. Note that the Ombudsman's office will not relieve you of your responsibility to repay your student loan.  Note and safeguard the name and contact information for your Lender.

Know Your Rights as a Borrower:  Review the Rights and Responsibilities for Borrowers section of your online Student Handbook under Tuition Assistance and Financial Aid in the section called Federal Student Aid. 

Repay Your Loan:  There are four repayment plans available under the Federal Family Education Loan Program.   You can learn more about managing your loans and the various repayment plans at the web sites at the bottom of this page.

Do not Default on Your Loan.   Once you accept Federal Student Aid, you are responsible for repaying your loan just as if it were a loan for a home or a car.  If you do not pay on your loan, it will go into default which could have financial consequences.  If your financial circumstances become difficult, you must research your options to determine the best way to continue taking responsibility for the money you have borrowed to fund your education. It is very difficult to have federal student loans discharged in bankruptcy and you cannot cancel your student loans if you did not get the education you expected, the job you expected, or did not complete your education, unless you leave school for a reason that qualifies you for a discharge of your loan.

Understand Your Repayment Options.  Along with your contact name and information for your loans, you should also note your repayment requirements.  If you have problems repaying your loans, you have 3 options – deferment, forbearance and consolidation. 

Deferment:  A deferment is a postponement of your loan payments.  For most Federal Student Aid (FSA) loans, it is a period of time during which no payments are required and interest does not accrue (accumulate).  Students receiving unsubsidized Stafford Loans must make interest payments or may allow the interest to be added to the principal.  This means that students may have to pay more on their loan over time.

One of the ways to get a deferment is through an In-School Deferment. In-school deferment occurs when you are approved to postpone loan payments while you are attending classes. 

In order to receive an in-school deferment:

• You must complete a Federal Student Aid Intent Form and register for courses as a FSA student regardless of whether you intend to pay for your courses using FSA.
• You will need to be enrolled in our semester format for a minimum of six (6) credits each semester as an undergraduate student or at least three (3) credits as a graduate student. 
• You must submit either a lender specific deferment form from your prior lender, or complete a Direct Loan In-School Deferment form (go to www.dl.ed.gov and click on the ‘Forms’ menu).  If you are not sure who your lender is, you can go to the National Student Loan Data System for Students at www.nslds.ed.gov and by using your PIN number you can access information about your loans and your lender.
• You must submit your deferment forms to our Registrar's Office at registrar@apus.edu.

You can access an online Direct Loan Deferment form by clicking here.  (You will need Adobe Acrobat Reader 5.0 or higher.  There is an option for a free download.) If you borrowed from a FFEL (Federal Family Education Loan) Program lender, you must contact your lender to request a deferment form. 

Additional deferments

The College Cost Reduction and Access Act (CCRAA), enacted on September 27, 2007, modified the Military Service Deferment, created the Active Duty Student Deferment and changed the poverty line standard for the Economic Hardship Deferment for borrowers in the Federal Family Education Loan, Direct Loan and Federal Perkins Loan programs (if you borrowed a Perkins Loan at a previous institution.)  For information on these specific deferments you can access the Student Aid on the Web page here. 

For a complete listing of deferments, you can access the Loan Deferment Summary Chart through the Student Aid on the Web pages. 

If you wish to ask about forbearance, you should contact your lender if you borrowed previously from another lender.  If you need forbearance for a Direct Loan, you can contact the Direct Loan Servicing Center at 800-848-0979, or click here for online information.

Consolidation.   Loan consolidation is another way to decrease the amount you are paying on your FSA loans.  If you consolidate, you combine one or more eligible loans into one loan with one repayment schedule.  The following can be the benefits of loan consolidation:

• Your monthly payment might be lower
• You can take a longer time to repay (up to 30 years)
• You will receive a fixed interest rate on your Direct or FFEL Consolidation Loan

With FSA loans, you can consolidate via a Federal Family Education Loan (FFEL) Consolidation or a Direct Consolidation Loan resulting in one monthly payment.  To apply for a Direct Consolidation Loan, contact the Loan Origination Center’s Consolidation Department at 1-800-557-7392. Or, you can click here for online information.  To apply for a FFEL program loan consolidation, you can contact the consolidation department of a participating lender for an application. If the same FFEL loan holder holds all the loans you (or your parents) want to consolidate, usually you must obtain your consolidation loan from that holder.

Do Not Default on your FSA Loan.  Default occurs if you fail to make a payment for 270 days (if you repay monthly) or 330 days (if your payments are due less frequently).  Defaulting on your loan has severe consequences. Your lender or agency that holds your loan, the state, and the federal government may all take action to recover the money.  They all may notify national credit bureaus of your default which will negatively affect your credit rating for a long time.  The Internal Revenue Service can withhold your U.S. individual income tax refund and apply it to the amount you owe on your FSA loans.  The agency holding your loan may ask your employer to deduct payments from your paycheck.  If you default on your FSA loan, you are liable for loan collection expenses.  Students who default on FSA loans are not entitled to receive additional federal student aid if they return to school. Legal action may also be taken against you for defaulting on a Federal Student Aid loan.

Need more help:  For more details on your options, go to the Repaying Your Student Loan section of Funding Education Beyond High School: The Guide to Federal Student Aid. 

In addition, you can learn more about managing your student loans by clicking on the Learn How to Manage your Finances link on any of the FACT pages.