Why does the amount of interest I pay vary from month to month?
Interest accrues on a daily basis on your loans. Factors such as the number of days between your last payment, the interest rate,
and the amount of your loan balance determine the amount of interest that accrues each month.
You can calculate the monthly interest on your loan by using the Simple Daily Interest Formula.
In some cases, you might be able to reduce your interest rate if you sign up for electronic debiting. To learn more, go to the
Electronic Payment page on this website.
Trouble Making Payments
If you’re having trouble making payments on your loans, contact your loan servicer as soon as possible.
Your servicer will work with you to determine the best option for you. Options include:
- Changing repayment plans.
- Requesting a deferment—If you meet certain requirements, a deferment allows you to temporarily stop making payments on your loan.
- Requesting a forbearance—If you don’t meet the eligibility requirements for a deferment but are temporarily unable to
make your loan payments, then (in limited circumstances) a forbearance allows you to temporarily stop making payments on your loan,
temporarily make smaller payments, or extend the time for making payments.
If you stop making payments and don’t get a deferment or forbearance, your loan could go into default (see Default section below),
which has serious consequences.
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note,
the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled.
Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover
the money you owe. Here are some consequences of default:
- National credit bureaus can be notified of your default, which will harm your credit rating, making it hard to buy a car or a house.
- You will be ineligible for additional federal student aid if you decide to return to school.
- Loan payments can be deducted from your paycheck.
- State and federal income tax refunds can be withheld and applied toward the amount you owe.
- You will have to pay late fees and collection costs on top of what you already owe
- You can be sued.
For more information and to learn what actions to take if you default on your loans, see the Department of
Education’s Default Resolution Group Web site.
Loan Cancellation (Discharge)
In certain circumstances, your loan can be cancelled/discharged. Read about cancellation provisions here.
Cancellation and Deferment Options for Teachers
If you’re a teacher serving in a low-income or subject-matter shortage area, it may be possible for you to cancel or defer your student loans.
Find out whether you qualify.
Loan Forgiveness for Public Service Employees
Under the Public Service Loan Forgiveness Program, if you are employed in a public service job, you may have the balance of your loans
forgiven if you make 120 on-time monthly payments under certain repayment plans after October 1, 2007.
You must be employed full-time in a public service job during the same period in which the qualifying payments are made and at the time
that the cancellation is granted. The amount forgiven is the remaining outstanding balance of principal and accrued interest on eligible
Direct Loans that are not in default. For additional details, go to the Public Service Loan Forgiveness page on this website.
Civil Legal Assistance Attorney Student Loan Repayment Program (CLAARP)
The Civil Legal Assistance Attorney Student Loan Repayment Program was established to encourage qualified individuals to enter and continue
employment as civil legal assistance attorneys. Note — The 2010 application process closed August 16, 2010.
A Consolidation Loan allows you to combine your federal student loans into a single loan.
Visit the Loan Consolidation page to see whether consolidation is right for you.