Repaying student loans
Support for managing your federal student loans
Earning your degree is a personally fulfilling endeavor. But after all that hard work and those long nights, followed by the jubilation of graduation, you know what’s next: It’s time to pay back your federal financial aid student loans.
Of course, making payments while you’re in school can save you money in the long run, and will help you minimize your student loan debt. You can always contact your loan servicer for more information about how to make payments before they come due. Payments can usually be made online, over the phone or by mail.
Frequently asked questions
Make sure to bookmark this page for future reference — even after you’ve completed your degree program.
Rights and responsibilities
The Borrower’s Rights and Responsibilities Statement is attached to the Master Promissory Note (MPN) you signed when you applied for your federal financial aid loan. Here’s an overview of those expectations:
You have the right to:
- Written information on your loan obligations.
- A copy of the MPN, either before or at the time the loan is disbursed.
- A grace period and an explanation of what that means.
- Notification, if in a grace period or repayment, no later than 45 days after a lender assigns, sells or transfers the loan to another lender.
- Receive a disclosure statement before repayment begins that includes information about interest rates, fees, the balance owed and a loan repayment schedule.
- Deferment or forbearance of repayment for certain defined periods, if qualified and requested.
- Prepay your loan in whole or in part anytime without an early-repayment penalty.
- Documentation that your loan is paid in full.
You are responsible for:
- Completing exit counseling before leaving school or dropping below half-time enrollment.
- Repaying your loan according to your repayment schedule — even if you’ve not completed your academic program, are dissatisfied with the education received or are unable to find employment after graduation.
- Notifying the lender or loan servicer if you:
- Move or change your address
- Change your telephone number
- Change your name
- Change your Social Security number
- Change employers, or if your employer’s address or telephone number changes
- Making monthly payments on your loan after the grace period ends, unless you received a deferment or forbearance.
- Notifying your lender or loan servicer of anything that might later change your eligibility for an existing deferment or forbearance.
When you first received federal financial aid, you were likely required to complete entrance counseling. This process explains the basics about federal student loans, the Master Promissory Note you signed, your student loan rights and responsibilities, and general information about repayment.
For a refresher of this information, please read the Entrance Counseling Guide from Federal Student Aid (dated Sept 2016).
When you are no longer in attendance at University of Phoenix, you will either complete exit counseling or be sent materials for your review. Exit counseling provides more in-depth information about how to repay your loans and what to do when you’re having difficulty making payments.
For more information, please read the Exit Counseling Guide from Federal Student Aid (dated July 2015).
About your loans
When you first enter repayment, you’ll need to contact your loan servicer for details about repayment plans..
To find out what servicer holds your federal loans, your best option is to visit nslds.ed.gov. You’ll need the FSA ID you used to electronically sign your Free Application for Federal Student Aid (FAFSA®). If you’ve forgotten your FSA ID username or password, you can retrieve it at https://fsaid.ed.gov/npas/index.htmIf you took out private, nonfederal loans, you can usually find those on your credit report.
Below are answers to other important questions you may have about your federal loans:
Set up an account with your servicer(s). From the servicer’s website, you can view your total balance, payments and due dates, as well as other options for your loans. This is the easiest way to stay on top of your loans.
A list of servicers may be found at https://studentaid.ed.gov/sa/repay-loans/understand/servicers. If you don’t know your servicer, please visit nslds.ed.gov to find out the servicer for your student loans.
Your servicer may be listed below. If you don’t know your servicer, or if it is not listed below, please visit nslds.ed.gov for more information.
| ACS | 800.835.4611 Fax: 315.738.2232 |
M-F 8 am – 11 pm ET |
| American Education Services | 800.233.0557 Fax: 717.720.3916 |
M-F 7:30 am – 9 pm ET |
| FedLoan Servicing | 800.699.2908 Fax: 717.720.1628 |
M-Th 8 am – 11 pm ET Friday 8 am – 9 pm ET |
| Great Lakes Borrower Servicing | 800.236.4300 Fax: 800.375.5288 |
M-Th 8 am – 9:45 pm CT Friday 8 am – 6:45 pm CT |
| Navient | 800.722.1300 Fax: 866.266.0178 |
M-Th 8 am – 9 pm ET Friday 8 am – 8 pm ET |
| Nelnet Borrower Servicing | 888.486.4722 Fax:866.545.9196 |
Open 24/ 7 |
Sometimes you may owe on several student loans that were borrowed at different times. If one servicer has a loan in repayment and other services do not, you may need to update your enrollment status with all of your loan servicers. Also, be sure to take advantage of any eligible deferments by notifying all servicers of your current situation and contact information.
Federal student loans have a six-month grace period. If you attended school previously and used up your six-month grace period, those loans will enter repayment. If you go back to school, your previous loans can be put into deferment status while you attend at least half-time. Contact your loan servicer to ensure an in-school deferment is posted.
If you qualify, paying for higher education may provide some tax relief. To learn more about different tax benefits, visit the Internal Revenue Service (IRS) website and use the current tax year IRS Publication 970, “Tax Benefits for Education.”
Some individuals can take advantage of a tax credit resulting in a student loan interest deduction of up to $2,500 per year. If you pay more than $600 in interest to any single loan servicer, that servicer will send you a form 1098-E indicating the total amount of interest paid. If you do not receive a 1098-E from your servicer, you can contact the servicer or use your online student loan tools to determine how much interest you paid. Publication 970 provides more information about this deduction, too.
Staying in touch
Our commitment to you doesn’t end when you’re no longer enrolled. Our Repayment Counseling Center will communicate with you through calls and email to help you prepare for repayment, keep you informed of student loan options and let you know what resources are available if you need them.
We also partner with loan repayment services that will communicate with you through mail, email or telephone to assist in the same way. Our loan servicer partners are ECMC Solutions and i3 Group.
Below are answers to several questions you may have about loan servicers and the communication process:
Even if you are in a non-delinquent status, you may be contacted by a loan servicer seeking to assist you with successful loan repayment.
If the servicer indicates you are delinquent, please understand that there can be a lag of approximately one month for status updates between all parties. If your loan holder has notified you that all loans are current, please advise the servicer, then follow up if your servicer contacts you again the following month — it is possible you have other loans with different lenders.
The Privacy Act Notice section of the Master Promissory Note authorizes the release of your information to third parties for activities required to service your loans and to facilitate timely repayment. The servicers are calling on behalf of the University to explain options that can help you with successful loan repayment.
Loan servicers must confirm your identity before disclosing any personal information. They will ask for one of the following: the last four digits of your SSN, your birth date or your home address. Doing so actually protects your personal information.
Yes, but only if a Family Educational Rights and Privacy Act (FERPA) release form is on file with University of Phoenix. The FERPA release form can be found on your student website, eCampus.
University of Phoenix is a non-term school at which progress is measured in successfully completed credit hours earned over a period of weeks of instructional time. Each federal financial aid disbursement is for a payment period that requires completion of a minimum number of credits and weeks of instruction.
If you withdraw from classes or have a break in attendance longer than 14 days, we are required by federal law to calculate the unearned portion of your federal financial aid disbursements and return those funds to the source (the loan servicer or Department of Education). The process of returning loan funds lowers the principal on your student loan because you are no longer borrowing the portion of the loan funds returned.
Federal financial aid funds earned for the payment period will remain on your account and may be used to pay for institutional charges like tuition and electronic course materials. The balance due on the loan funds you actually use is always payable to the loan servicer.
If the institutional charges for the payment period are greater than financial aid funds for that same period, there may be a remaining account balance with the University. It is the student’s responsibility to pay this balance to the University, not to the lender.
Loan forgiveness
In certain situations, you can have your federal student loan forgiven, canceled or discharged. To find out whether you qualify due to job status, disability, the closure of your school or other circumstances, please visit the forgiveness-cancellation section of the Federal Student Aid website.
The Public Service Loan Forgiveness program was established to encourage individuals to pursue full-time employment in lower-paying, vital public service jobs. The program allows eligible borrowers to cancel the remaining balance of their Direct Loans after serving full time at a qualifying public service organization for at least 10 years while making 120 qualifying on-time monthly payments after October 1, 2007.
To learn more, visit the FedLoan Servicing site.
You can also download the form for Employment Certification for Public Service Loan Forgiveness.
NOTICE: We understand that some of our students have prior loans that are already in repayment, and that others may be close to entering repayment. You may have recently seen ads on Facebook or through e-mails advertising services such as consolidation, lowering monthly payments, or even forgiveness of your student loans. Many of these companies require an up-front fee or charge for their services on an ongoing basis. We want you to know that the programs these companies are advertising are all offered to Federal student loan borrowers, at no charge, from the Department of Education and through your loan servicers.
Please contact your loan servicer regarding your options as they are there to assist you with choosing the best repayment option for you. If you are unsure of how to contact your servicer, you can find all your federal loan information by logging in to www.nslds.ed.gov.
If you have loans in repayment and are interested in loan consolidation, make sure it’s the best option for you. You can learn more at the Federal Student Aid site: http://studentaid.ed.gov/repay-loans/consolidation. And, you can find a free online consolidation application at https://studentloans.gov/myDirectLoan/index.action
More help — when loan repayment becomes a challenge
If you’re having difficulty making your payments, contact your loan servicer as soon as possible. It’s important you do so before your loan(s) become delinquent — to protect your credit.
Several options are available for borrowers struggling to make payments, and your loan servicer can help you better understand how to select or change your payment plan — to reduce the monthly payment amount — or establish deferment or forbearance.
Here’s more insight:
Repayment plans
When you first enter repayment, your loan servicer will ask you to select a repayment plan. If you don’t select one, you’ll be placed on the Standard Repayment Plan. If, for any reason, you want to change your payment amount, you can do so by changing your plan. Use the loan calculators on studentloans.gov or your servicer’s website to see how your monthly payment and total cost will change on different payment plans.
Each of the available repayment plans is briefly explained here. You can also visit the Federal Student Aid site to learn more.
With the Standard Repayment Plan, you’ll pay a fixed amount each month until your loans are paid in full. Your monthly payment will be at least $50 — possibly higher, depending on the amount of the loan — and you’ll be on track to repay your loans within 10 years.
Your monthly payment on the standard plan may be higher than it would be on other plans because your payment starts higher to remain consistent throughout the term.. For that reason, with a 10-year limit on repayment, you may pay less interest with this option.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
Graduated plans can vary, but the idea is to start with a lower payment while income is lower and then increase every two years or so as income goes up.
The length of your repayment period will be up to 10 years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments. Your monthly payment will increase in time, but no single payment on this plan will be more than three times greater than the amount of your beginning payment.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
The extended repayment period can go up to 25 years, and payments are either fixed or graduated. Keep in mind: The longer you take to repay, the more you’ll repay in total.
To qualify for this plan, you must have a minimum of $30,000 in Federal Family Education Loan (FFEL) Program and/or Direct Loans. If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFELP loans. If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.
This means, for example, that if you have $35,000 in outstanding FFELP loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFELP loans but not for your Direct Loans. Your fixed monthly payment is lower than it would be on the standard plan, but you’ll ultimately pay more for your loan because of the additional interest that accumulates during the longer repayment period.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
Federal student loans offer several repayment plans based on your income and family size. If your monthly payment is high in comparison to your income, you might consider one of these plans. Read through the high-level information about these plans, and then you can learn more at the Federal Student Aid page. To help you determine your eligibility for and estimated repayment amount under any of these plans, use this Repayment Estimator.
If you are also interested in the public service loan forgiveness program, you will need to choose one of these income-driven repayment plans: Revised Pay as you Earn, Pay as you Earn, Income-based Repayment, or Income-contingent Repayment.
An income-driven plan can make your monthly payment manageable, however, if you choose to lower your payment or extend the repayment term, you will likely pay more interest over time. Federal loans can be prepaid at any time, and that means you can make a higher monthly payment to reduce total interest paid.
Income-based Repayment Plan:
You may enter the Income-Based Repayment (IBR) Plan if your federal student loan debt is high relative to your income and family size. The loan servicer will perform the calculation to determine your eligibility, but you can use the U.S. Department of Education’s Repayment Estimator to determine whether you would likely qualify for the IBR plan.
The calculator takes into account income, family size and state of residence to calculate the IBR monthly payment. The payment is capped at 15 percent of annual discretionary income. If a borrower is married and files a joint federal tax return, and the spouse also has IBR-eligible loans, the spouse’s eligible loan debt is considered when determining IBR eligibility.
This program is available to FFELP and Direct Loan borrowers. Under this plan, if your monthly payment does not cover the amount of accrued interest, the government will pay the remaining interest accrued — for the first three years of repayment.
To remain in the IBR program, you must submit income documentation each year.
At the end of 25 years, any remaining balance is forgiven. For new borrowers on or after July 1, 2014, any remaining balance is forgiven after 20 years. There may be tax consequences when the debt is forgiven.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
Income-contingent Repayment Plan:
The Income-Contingent Repayment Plan is available only for Direct Loans. Each year, your monthly payment is calculated based on your adjusted gross income, family size and Direct Loan debt.
On this plan, your monthly payment is the lesser of:
- The amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income; or
- 20 percent of your monthly discretionary income
If the monthly payment does not cover all accrued interest, the unpaid interest amount is capitalized — added to the principal balance — once per year. The capitalization will not exceed 10 percent of the original amount owed when the loan entered repayment.
Repayment can extend to 25 years, after which any remaining balance is discharged. Any discharged amount may have tax implications.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
Pay As You Earn Repayment Plan (PAYE):
The Pay As You Earn repayment plan is only available for Direct Loans. However, FFELP loans are taken into consideration when determining the borrower’s eligibility for this plan.
Each year, the monthly payment is calculated based on adjusted gross income, family size and total federal student loan debt. Married borrowers who file a joint tax return will have the spouse’s income and federal loan debt taken into consideration when determining eligibility for this program. Qualifying for this plan will generally result in a lower monthly payment than other income-driven repayment plans.
On this plan, your monthly payment is the lesser of:
- What you would repay under the Standard Repayment Plan; or
- 10 percent of your discretionary income
If your monthly payment does not cover the amount of accrued interest on your subsidized loans, the government will pay the remaining interest accrued — for the first three years of repayment. To help you determine your repayment amount under this and other plans, use this Repayment Estimator.
To qualify for this plan, you must not have an outstanding balance on a Direct Loan or FFELP loan as of October 1, 2007, and must have borrowed a new Direct Loan on or after October 1, 2011. It is possible to consolidate FFELP student loans with Direct Loans to make them eligible for this plan.
Repayment can extend up to 20 years, and any remaining balance — after 20 years of on-time payments — is discharged. Any discharged amount may have tax implications.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
Revised Pay as You Earn Plan (REPAYE):
The Revised Pay as You Earn (REPAYE) repayment plan is only available for Direct Loans. However, FFELP loans can be consolidated into the Direct Loan program to make them eligible for this plan.
Each year, the monthly payment is calculated based on adjusted gross income, family size and total federal student loan debt. Unlike the PAYE and IBR plans, there is no income requirement to use this plan. And, under this plan your calculated payment can exceed the standard monthly payment amount.
Married borrowers will have the spouse’s income and federal loan debt taken into consideration when determining eligibility for this program.
On this plan, your monthly payment is generally 10% of your discretionary income. If your monthly payment does not cover the amount of accrued interest on your subsidized loans, the government will pay the remaining interest accrued — for the first three years of repayment. The government will also pay half of the difference on your subsidized loans after the three-year period, and half the difference on your unsubsidized loans during all periods.
To help you determine your repayment amount under this and other plans, use this Repayment Estimator.
Repayment can extend up to 20 or 25 years, and any remaining balance — after 20 or 25 years of on-time payments — is discharged. Any discharged amount may have tax implications.
For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.
Deferment
Deferment is a temporary suspension of student loan payments for a specific situation, such as unemployment or enrolling in school at least half time. If you have a subsidized student loan, interest will not accrue during a deferment. If you have an unsubsidized loan, interest will accrue during a deferment.
For more information on deferments, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance.
If you satisfy the requirements for deferment — unemployment, hardship or enrollment in school at least half time — you may be required to complete a deferment form and return it to your loan servicer.
Deferment forms can be downloaded from the loan servicer’s website. Complete and return your deferment forms to each of your loan servicers. Here are links to the most common deferment forms:
In some cases, your loans will automatically go into deferment if you return to school at least half time.
Speak with your loan servicer about this option, keeping in mind that you’ll be responsible to pay any interest that accrues during a deferment. You may pay those interest charges before the loan is capitalized (added to the principal balance).
Learn more about deferment options by visiting the Federal Student Aid site.
Forbearance
Forbearance is a temporary postponement of payments or a reduction in the payment amount for a period of time when the borrower is experiencing financial difficulty. Forbearance is not subsidized by the government, which means you’re responsible for the payment of any interest that accrues. This status is generally for individuals who have exhausted other options for resolving a delinquent loan.
For more information on forbearance, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance.
In many cases, forbearance can be established immediately over the phone with your loan servicer. Just make sure you understand the possible financial ramifications of entering forbearance (explained in the next FAQ).
Forbearance might be a desirable, short-term option, but be sure you understand the potential costs beforehand.
Anytime you stop making scheduled payments, you increase the overall cost of loan repayment due to accrual of additional interest. You are responsible for repaying any interest that accrues during forbearance. Any unpaid interest is added to the principal balance — called capitalization — which will increase the loan principal and could result in an increase in future interest charges. This could lead to a higher loan balance for the remaining life of the loan.
To avoid capitalization of the accrued interest during forbearance, consider paying any interest that accrues before it capitalizes.
If you default
A borrower should never have to default on a federal student loan. Remember to contact your loan servicer as soon as possible to discuss your options.
A loan is in default when you fail to pay several regular installments on time or otherwise fail to meet the terms and conditions of the loan repayment agreement. Your federal student loan is considered in default when it reaches 270 days of delinquency.
Defaulting on a federal student loan has serious consequences:
- Collection costs of up to 25 percent can be added to the balance.
- The holder of the loan can take legal action to recover the money.
- Your wages can be garnished administratively without a court order.
- Income tax refunds can be seized.
- Default is reported to the national credit reporting agencies.
- Loss of eligibility for future federal financial aid, unless a satisfactory repayment schedule is arranged.
- Loss of eligibility for some federal and/or state jobs in certain fields (ex., criminal justice).
- Generally, your student loan is not dischargeable in bankruptcy.
One consequence of default is losing eligibility for federal financial aid. To regain eligibility, contact your loan servicer or guarantor to do one of the following:
- Pay the loan in full.
- Make six consecutive, on-time monthly payments.
- You must continue monthly payments to retain eligibility.
- Make three consecutive, on-time monthly payments and then pay the default in full through consolidation.
- Make nine consecutive, on-time monthly payments and qualify to rehabilitate the loan.
- Rehabilitation is a good option because the loan is no longer in default and is reported as such to the national credit reporting agencies.
FAFSA is a registered trademark of the U.S. Department of Education, Federal Student Aid.
FICO is a registered trademark of Fair Isaac Corp.
Resources
Repayment Counseling Center
If you have questions regarding your student loans or need assistance contacting your loan servicer, contact the University’s Repayment Counseling Center.
Our mission is to facilitate long-term solutions by providing student-focused, individualized counseling that results in successful student loan repayment. As student advocates, we strive to provide unparalleled customer service by offering accurate and positive information to ensure your overall financial success.
Repayment@phoenix.edu
800.452.4380
602.713.1010
Our repayment partners
We’ve teamed up with ECMC Solutions to answer all of your student loan repayment questions. Solutions is a service of the non-profit organization ECMC and is dedicated to helping students manage educational loans. Their resources are available to you free of charge. To contact a Solutions Student Loan Repayment Advisor, email or web chat, or call them at 1-877-331-3262.
Options to postpone repayment
If you’re struggling to make payments, call your loan servicer today and ask for help. You may qualify for deferment or forbearance.
Connect with us
Stay knowledgeable — and keep your finances in good standing — with help from Financial Services Community manager Chris Conway. Current students and graduates can get up-to-date support and information about repaying student loans on PhoenixConnect®. (You must be logged into eCampus for access.)