Subsidized, unsubsidized, institutional, private... What does it all mean? How do I begin repaying my loans after graduation? What is compound interest and how does it work?
Student loans are a major part of financing a college education for some students. These loans are also often a student's first experience with borrowing money and debt. The most important consideration to keep in mind when borrowing money (not just for student loans) is to only borrow what you truly need, even if you are offered more. Keeping the amount borrowed to a minimum will reduce your amount of debt and the amount of interest paid over time.
To access information about your student loans, visit the National Students Loan Data System (NSLDS). From this website, students can:
- Estimate your repayment
- Learn who your loan servicer is
- See accrued interest on subsidized loans
- Learn about repayment plans, loan forgiveness plans, consolidation, and refinancing available to borrowers
Before entering repayment after graduation, you must first complete Exit Counseling for your federal student loans. Depending on the type of loans you have, you will complete this task at different places.
- For Direct Loans (Subsidized, Unsubsidized, Graduate PLUS), go to StudentAid.gov and log in with your FSA ID and password.
- For Institutional, Perkins, or Nursing Loans, go to Heartland ECSI.
Don't be intimidated by this task! Exit Counseling only takes 15-20 minutes to complete. Follow this link for a helpful checklist of important items to take care of as you prepare to repay your student loans. In addition, we recommend reviewing the presentation at this link for a Top Ten List of Things to Do Before Graduating from UVA.
You've finally graduated and gotten your first "real" job. Congratulations! But now it's time to begin making payments on your student loan debt. Are you ready? Your first step should be to visit Federal Student Aid's Repayment Estimator or Student Loan Hero to explore different repayment options that may be available to you, and estimate your payments over time.
- Example: If a student has $18,000 in loans with a standard 10-year repayment and 6% interest, how much will that student's payments be each month?
- In this scenario, the student would be making monthly payments of $200 to pay off their loans in time. $5,980 in compound interest will incur during the 10 year period, making the ultimate total paid $23,980.
Are you confused about the differences between forbearance and deferment, delinquency and default?
|Deferment||Allows a student to temporarily stop making payments on federal student loans or to temporarily reduce the amount of student loan payments they are making. Students are generally NOT responsible for paying interest that accrues during deferment.|
|Forbearance||Allows a student to temporarily stop making payments on federal student loans or to temporarily reduce the amount of student loan payments they are making. Students generally ARE responsible for paying interest that accrues during forbearance.|
Occurs when you are at least one day late on a loan payment. As soon as you make a payment, you are back in good standing.
Occurs when you are more than 270 days past due on a loan. Students can rehabilitate their loans, but it takes time.
See the chart below for brief descriptions of the most common types of student loans for 2022-2023.
|Direct Subsidized||4.99% Fixed||Need-based||
|Direct Unsubsidized||4.99% Fixed||Non-need based||
|Parent PLUS||7.54% Fixed||Non-need based||
These tips can help you reduce your overall debt amount while you are in school:
- Borrow only what you know you will need
- Borrow subsidized loans first
- Graduate early
- Create and adhere to a budget
- Pay your interest down while in school if you can
- Take on a part-time job, if your studies will allow it
General Loan Information:
- National Student Loan Data System for Students (NSLDS)
- Annual Borrowing Limits
- Repaying Your Federal Loans
- UVA Exit Counseling Handout