Loan Repayment

Loan Consolidation

As you make plans for repaying your student loans, you may be considering loan consolidation as an option.  Consolidation allows you to pay off some or all of your existing student loans by combining them into a single, large loan.  There are two types of consolidation programs for education loans:

• Federal Consolidation Loans

• Fixed interest rate based on a weighted average of the current rates on your existing loans
• Deferment options predetermined by federal regulations
• Cannot include non-federal (private) loan funds

• Private Consolidation Loans

• Can include both federal and non-federal student loan funds
• Usually a variable interest rate
• Forbearances available only at the lender’s discretion

Loan consolidation may lower your total monthly repayment amount.  However, any consolidation loan is also likely to significantly increase the total amount of interest that you will be required to pay.  If you are able to meet your current monthly repayment obligations, it may be best for you to avoid consolidation.

You may want to estimate the amount that you can afford to pay on a federal consolidation loan based on your monthly income, using the U.S. Department of Education’s Online Calculator.  Additional information about consolidation can be found on the Department of Education’s website for Loan Consolidation.

Information about private loan consolidation can be located at Finaid.org.

Loan Forgiveness

If you teach elementary or secondary school you may be eligible for special deferment options and, in some cases, cancellation of a portion of your student loan debt.

Direct and FFEL Subsidized/Unsubsidized Loans (Stafford Loans)

• Eligibility requirements for Teacher Loan Forgiveness are available at the Department of Education website. Go to the Teacher Loan Forgiveness form.
• If you think you’ll qualify for the Teacher Loan Forgiveness, you can apply for the Teacher Loan Forgiveness Forbearance (a temporary cessation of payments while performing your required service). Go to the Teacher Loan Forgiveness Forbearance form.
• You may also be able to obtain Teacher Loan Forgiveness forms through the servicer on your loan.

Perkins Loan

• For federal Perkins loan deferment or cancellation, contact the school where you borrowed your loan; or the school's Perkins servicing agency. If you borrowed a Perkins loan at Stanford, forms are available from University Accounting Service.
  

Defaulting on Student Loans

Student loan borrowers in default do have options to repay their loans. Information is available from the Department of Education and FinAid.org.

Resolving Loan Repayment Disputes

If you are having a dispute with your servicer or another agency regarding repayment of your federal student loan, you may consider contacting the Federal Student Aid Ombudsman for assistance. You can reach the Ombudsman's office by phone at 877-557-2575 or by mail at this address:

U.S. Department of Education
FSA Ombudsman
830 First Street, NE
Fourth Floor
Washington, DC 20202-5144