Repaying your loan
Find out about repaying your loan after your studies and what happens if you withdraw from your course.
Direct Loan Exit Counseling Completion
You must complete exit counseling through StudentAid.gov if you are graduating, submitting your thesis, dropping below half-time status or withdrawing from your programme. The counseling will provide you with important information on loan repayment and your rights and responsibilities as a borrower.
You must notify the Financial Aid Office by email (email@example.com) that you have completed the counseling. A report can then be obtained by the Financial Aid Office that shows that you have met the US Department of Education’s requirement.
Reminder: You will need your Federal Student Aid (FSA) ID (username and password) to complete the Exit Counseling. This is the same FSA ID used to complete the Free Application for Federal Student Aid (FAFSA).
Repaying your loans
There are a number of repayment options available. You should discuss them with your loan servicer to determine which will be the best for you. You can find the full details through StudentAid.gov, including what repayment plan options are available and when you must begin making payments. You can also use the Loan Simulator to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
If you do not select a repayment plan you will be placed under the Standard Repayment Plan (with fixed payments for up to 10 years). If your federal student loan payments are high compared to your income, you may want to consider repaying your loans under an income-driven repayment plan. These plans are designed to make your student loan debt more manageable by reducing your monthly payment amount.
You are responsible for staying in touch with your loan servicer and making your payments, even if you do not receive a bill.
After you graduate, submit your thesis, drop below half-time status or withdraw from your programme, you may have a six-month grace period before you must begin making payments. This grace period gives you time to get financially settled and to select your repayment plan.
- Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period before payments are due.
- PLUS loans do not have a grace period, but if you received a PLUS loan as a graduate student you’ll automatically get a six-month deferment. No payments are required during this six-month deferment period. If you’re a parent borrower who took out a PLUS loan to pay for your dependent's education, you can request a six-month deferment.
Deference and consolidation
Under certain circumstances you may qualify for a deferment or a forbearance. With either of these options, you can temporarily suspend your payments. Discuss obtaining a deferment or forbearance with your loan servicer.
You may be able to combine one or more of your federal student loans into one new Direct Consolidation Loan. Learn more about loan consolidation.
Risk of going into default
Student loans are borrowed money that must be repaid just like car loans and home mortgages. Student loans cannot be cancelled because you didn’t like the education received, didn’t get a job in your field of study or are having financial difficulty. Loans are legal obligations and are not easily written off in bankruptcy.
Do not ignore your student loan repayments or you will risk going into default. Defaulting on your loan can have serious consequences.
Withdrawing from your studies
Your Direct Loan is awarded under the assumption that you will attend University for the entire period for which the funding was granted. If you withdraw during a payment period, the amount of Title IV funding that you have earned up to that point is calculated in accordance with the US Department of Education’s regulations. If you received (or the University or your parent received on your behalf) less financial assistance than you earned, you may be able to receive the additional funds. If you received more financial assistance than you had earned, the unearned funds must be returned by the University and/or you.
As a result of unearned funds being returned you may have an outstanding balance to repay to the University as soon as possible. You can view any balance, and pay with a debit or credit card, online via your Sussex Direct account. If you need to discuss your account, or arrange payment of your balance, contact the University’s Accounts Receivable team on +44 (0)1273 678076.
Temporary withdrawal and intermission
If you take temporary withdrawal/intermission from your course you will be classed as withdrawn for funding purposes. The amount of Title IV funding that you have earned will be calculated in accordance with the US Department of Education’s regulations and any unearned funds received by you (or the University) must be returned.
Third-party debt relief companies
There are some third-party “debt relief companies” that are charging borrowers large up-front or monthly fees for federal student aid services offered by the Department of Education and its student loan servicers for free. Such services include:
- consolidating federal student loans
- changing repayment plans
- resolving defaults
- filing requests for borrower defense loan cancellation
- other benefits and services that students are entitled to receive at no charge.
These debt relief companies may utilise sophisticated strategies to target unsuspecting borrowers and inappropriately use the Department of Education’s logo or other identifying information to give the impression that they are working with or for the government. Sometimes the tactics used by these companies also state or imply that the company is working with an institution or university to provide a benefit to student loan borrowers.
The Consumer Financial Protection Bureau advises that there are four warning signs of third-party debt relief companies that student loan borrowers should avoid, including:
- pressure to pay high up-front fees;
- promises of immediate loan forgiveness or debt cancellation;
- demands that you sign a “third party authorization”; or
- request for a student’s FSA ID
Students and borrowers can file a complaint or report suspicious activity through the Federal Student Aid Feedback Center for concerns related to third party debt relief companies.
You should contact your loan servicer if you disagree with the balance or status of your loan. If your problem is not solved or if you are still not satisfied, you may consider contacting the Federal Student Aid Ombudsman Group to help you resolve your dispute. Contacting the Ombudsman Group is a last resort.
The Ombudsman Group can be contacted via:
- completion of the secure assistance request form through the Federal Student Aid (FSA) Feedback Center
- telephone: 1-877-557-2575
- fax: 606-396-4821
- Postal Mail: US Department of Education, FSA Ombudsman Group, P.O. Box 1843, Monticello, KY 42633
The Institute of Student Loan Advisors (TISLA)
The Institute of Student Loan Advisors Corporation (TISLA) was founded to ensure that all student loan borrowers have access to free, neutral and clear student loan advice and dispute resolution assistance. Find out about their support service.
The Federal Student Aid YouTube channel has lots of useful videos you can watch, including help with your Direct Loan application and information about repayments.
The Financial Aid Office are responsible for administering Federal Direct Loans at the University of Sussex. Get in touch by emailing: firstname.lastname@example.org.