Paying for College
Loan Repayment and Resources
It is important to keep track of your loan amounts, who is servicing your loans, and to know your options for repaying loans.
The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS provides you access to view your federal loans, grants, and aid status.
Find the right repayment plan for you, learn how to make payments, get help if you can't afford your payments, and see what circumstances might result in a loan being forgiven, canceled, or discharged.
Understanding Common Terms
- Award Letter A letter from your college or university that details your federal, state, institutional, and private student financial aid.
- Capitalization Unpaid interest that has been added to the principal balance of a student loan. Future interest is charged on the increased principal balance and this may increase your monthly payment amount and the total amount you repay over the life of the loan.
- Consolidation The process of combining one or more loans into a single new loan.
- Cost of Attendance The total cost to attend school for the academic year, as determined by your school.
- Default Failure to repay a loan according to the terms agreed to. Your lender is required to report the default to at least one national credit bureau.
- Deferment A benefit of student loans that allows you to temporarily stop making payments. You're not generally charged interest on subsidized loans during deferment. Interest will continue to be charged on unsubsidized loans and PLUS loans.
- Disbursement A portion of a student loan that the school pays out by applying the funds to the student's school account or by paying the borrower directly. Students generally receive their student loans in more than one disbursement.
- FAFSA (Free Application for Federal Student Aid) The FAFSA® is a form that must be completed annually to help determine your eligibility for federal student aid.
- Forbearance A benefit of student loans that allows you to temporarily stop making payments or reduce your student loans' monthly payment. Interest will continue to be charged on your subsidized, unsubsidized and PLUS loans. Some forbearances are required to be granted by your loan servicer; others are offered only at the discretion of your loan servicer.
- Grace Period A period of time that generally begins on the day after a borrower graduates, leaves school, or drops below half-time enrollment and usually ends six to nine months later. A borrower is not required to make payments during the grace period.
- Interest The cost to borrow money. Interest is calculated as a percentage of the outstanding (unpaid) principal balance.
- Interest Rate The percentage charged when you borrow money.
- Lender The organization that made the loan initially; the lender could be the borrower's school; a bank, credit union, or other lending institution; or the US Department of Education.
- Master Promissory Note (MPN) A legal document in which you promise to repay your federal student loan(s) and any accrued interest and fees to your lender or loan holder. The MPN contains a Borrower's Rights and Responsibilities Statement that explains the terms and conditions of the loan(s) you receive.
- NSLDS (National Student Loan Data System) The central database for student aid. NSLDS receives data from schools, guaranty agencies, and other Department of Education databases.
- Net Price An estimate of the actual cost that a student needs to pay in a given year to cover education expenses to attend a particular school. Net price is determined by taking the school's cost of attendance and subtracting any grants and scholarships for which the student may be eligible.
- PLUS Loan Direct PLUS Loans and FFEL PLUS Loans are loans to eligible graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools.
- Subsidized Loan A federal student loan for which a borrower is not generally responsible for paying the interest while in an in-school, grace, or deferment period.
- Unsubsidized Loan A federal student loan for which the borrower is fully responsible for paying the interest regardless of the loan status.
Access information regarding your free credit reports. The Federal Trade Commission provides a broad base of consumer information to assist you with maintaining a good, clean credit report.
You can check your credit report every 12 months for free at AnnualCreditReport.com. It is the official site to help consumers obtain their free annual credit report online.