Direct Loan Repayment

Direct Loans

Direct Loans are loans borrowed directly from the Department of Education. They offer a variety of repayment plans and options.

Grace Periods & Servicers

A grace period is the 180 day period after you graduate or drop below half-time in which you are not required to make a payment on your Direct Loans. Interest still accrues on your Unsubsidized Loans during the Grace Period. Each loan has its own grace period so, if you have taken multiple breaks from school, it is important to keep track of when you enter repayment on each loan.

A servicer is the agency who collects the loan payments on your behalf. You can identify who your servicer is by logging on to If you have questions about, please email

Standard & Income Driven Repayment Plans

The Standard Repayment plan is the repayment plan you are automatically entered into when you begin repayment. Your payments are divided into 120 payments over a 10 year period.

If you cannot afford payments under the Standard Repayment plan, it is best to contact your servicer about an Income Driven Repayment Plan (IDR). To determine if you’re eligible and which plan might work best for you, see the Loan Repayment Estimator.

Notes on Public Service Loan Forgiveness

If you are employed at a public institution or agency, certain 501(c)(3) non-profits, or qualifying for-profit employers and meet a set of other criteria you might be eligible for Public Service Loan Forgiveness.

For further information and FAQs, please see

Deferment, Forbearance, & Consolidation

Deferment is a “postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue on Direct Subsidized Loans...”

If you are interested in pursuing deferment, be sure to speak with your servicer. If you are pursuing “in-school deferment” and have transferred or will transfer to/from another college, be sure to speak with Enrollment Services.

Forbearance is “a period during which your monthly loan payments are temporarily suspended or reduced.” The interest accrues on both your Subsidized and Unsubsidized Loans so, while it is preferable to being late on your payments, it is often best to avoid forbearance if you can.

Deferment is preferable to Forbearance. The interest does not accrue on your Subsidized Loans while you’re in deferment, so your amounts don’t add up as quickly.

Consolidation is when you combine multiple Direct Loans into a new consolidated loan. Consolidation might not be the best option for everyone, so it is important to speak with your servicer before making the decision to consolidate.

Delinquency & Default

Your student loans are delinquent if you miss a required payment. Delinquency hurts your credit rating.

If you are delinquent for 270 or more days, you enter default. Defaulting is very serious and can lead to:

  • Losing your financial aid eligibility
  • Damage to your credit history
  • Garnishment of wages and/or seizure of benefits or tax refunds
  • Loss of eligibility for certain types of employment
  • Other repercussions

To resolve a defaulted status on a Direct Loan, you will need to contact Default Management & Collection Services at 1-800-621-3115. In general, have three (3) options:

  • Pay the amount in full or make a negotiated payment
  • Consolidate the defaulted loan into a new loan
  • Rehabilitate the loan

Of the three (3) options, rehabilitation is preferable because it clears the default from your credit history. If you have questions about this process, please contact the Default Management Specialist.

Private Loans and Repayment

Private loans have different interest rates and requirements than Direct Loans. When borrowing private loans, it is essential that you read the terms and conditions.

If you need assistance with interpreting the terms and conditions for private loans, it is best to contact Clark’s Financial Literacy Coach at 360-992-2019.

Sample Repayment Amounts

The chart below assumes the current 4.45% interest rate and a Standard Repayment Plan. When you enter repayment, the Department of Education uses the average interest rates on your loans.

If these amounts appear too high to afford, please contact your servicer about establishing an Income Driven Repayment Plan.

Total Borrowed

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Avoiding Loan Scams

There are also agencies and organizations which may attempt to take advantage of students. For more information, please see’s  Avoiding Loan Scams Page or the Federal Trade Commission’s Consumer Information page.


Helpful Links


Contact Information

U.S. Department of Education
FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633
Phone: 1-877-557-2575
Fax: 1-606-396-4821