Repaying Loans

If you are borrowing for college, think ahead to the time when you will begin repaying your loans. How much will your monthly payments be? When will they begin? How long will you be making your payments?

The information on this page can help you consider how to manage your loans after graduation. Start with this handy College Loan Organizer (PDF), a worksheet to help you track your college loans. Also see the Federal Direct Loan Limits and Repayment Calculators pageAlso, Federal Student Aid offers a simple tool that can help you select your best option for repayment in five steps or less: Visit studentloans.gov/repay.

REPAYING YOUR DIRECT LOANS

Direct Loans Payment Plans

The federal government offers several payment plans for Direct Subsidized and Unsubsidized and Direct Graduate PLUS Loan borrowers. Standard, extended, or graduated payment plans will determine the amount of your monthly payments, the number of monthly payments and the total amount that you owe with interest.

Some students may be eligible for special repayment programs based on income after graduation.  Examples of these income-drive plans are: Pay-As-You-Earn, Revised Pay-As-You-Earn, Income-Based and Income-Contingent. With these plans, payments adjust as income changes.

For more information about all federal student loan payment options, visit the U.S. Department of Education’s Direct Loan Repayment Plans page.

Estimating Your Monthly Payments

For a one-stop calculator, try the Repayment Estimator tool at StudentLoans.gov that uses real-time loan data. Sign in with your federal FSA ID to access your data and get an early look at which plans you may be eligible for and compare monthly payments. The U.S. Consumer Financial Protection Bureau also has an online interactive Repay Student Debt tool that takes you through a series of questions to help you determine your best repayment options.  Federal Student Aid's repayment tool, which can help you select a plan in five steps or less: Visit studentloans.gov/repay.

You may also visit the U.S. Department of Education StudentAid.ed.gov website for links to a variety of repayment calculators to help you decide on a plan. For these, you will need the cumulative amount of your federal loans; log into the National Student Loan Data System (NSLDS) with your federal FSA ID to retrieve this information. 

Other Calculators and Loan Repayment Tools

Required Exit Counseling

Repayment of your federal Direct Loans begins six months after you graduate, withdraw from classes or drop below half-time enrollment. Students borrowing through the Federal Loan Program are required to do online exit counseling.
 
The process is simple. Visit studentloans.gov, log in with your federal Federal Student Aid ID, Social Security number and date of birth, select the "Complete Counseling," choose "Exit Counseling" and follow the instructions. (If you do not have an FSA ID, visit https://fsaid.ed.gov and select "Create an FSA ID.")

There are options to explore during your exit counseling session. If we can assist you or answer any questions, please call 734-763-6600 or contact us

Loan Payment Help

Need help with repayment options or third-party liaison assistance with the U.S. Department of Education? The U-M Office of Financial Aid can help. Call 734-763-4119 or email ofa-GetHelp@umich.edu. Our brochure "Repayment a Problem? Help is on the way" is available for PDF viewing or download (contact our office if you would like a paper copy).

TYPICAL DIRECT LOAN REPAYMENT SCHEDULES FOR U-M GRADUATES

Specific information about average student loan debt and other data about U-M students can be found in The Michigan Almanac  from the U-M Office of Budget and Planning. To calculate your own situation, visit studentaid.ed.gov/repay-loans and select the calculator links. Using the Federal Repayment Estimator, you can plug in various scenarios relating to your expected income to see if you might qualify for income-driven repayment plans, which are based upon your income after leaving college. Some federal repayment plans may also offer loan forgiveness (see information here)

Bachelor's Degree

The average amount borrowed by a resident U-M student receiving a bachelor's degree is $23,657 and $29,097 for a non-resident student. The table below shows monthly payments and the total repaid for a sample resident undergraduate.

Standard
(120 mos. or 10 years)
$261
INITIAL MONTHLY PAYMENT
$31,282
TOTAL PAYMENTS (PRINCIPAL + INTEREST*)
Graduated**
(120 mos. or 10 years)
$146 (rises with the loan)
INITIAL MONTHLY PAYMENT
$32,762
TOTAL PAYMENTS (PRINCIPAL + INTEREST*)

*Based on a 4.29% interest rate (your individual loan rate may vary, depending upon when it was disbursed)
** Estimated monthly repayment for first two years. The payment will generally increase every two years

Graduate Degree

The average amount borrowed by a resident student receiving a graduate degree is $47,228 and $61,304 for a nonresident student. The table below shows monthly payments and the total repaid for a sample resident graduate student.

 

*Based on a 5.84% interest rate (your individual loan rate may vary, depending upon when it was disbursed)
** Estimated monthly repayment for first two years. The payment will generally increase every two years

Sources: The Michigan Almanac (a report of the U-M Office of Budget and Planning), loan calculations from the U.S. Dept. of Education (studentaid.ed.gov) and reports from the U-M Office of Financial Aid.

DIRECT LOAN FORGIVENESS AND FORBEARANCE

Students who work full-time in public service jobs may qualify for forgiveness of the balance due on their eligible federal student loans after making 120 monthly payments under certain repayment plans. For more information, see the U.S. Department of Education’s Public Service Loan Forgiveness webpage.

The Stafford Loan Forgiveness Program for Teachers is intended to encourage individuals to enter and remain in the teaching profession. Under this program, a student may receive loan forgiveness of up to $17,500 if teaching for five consecutive academic years in schools or educational service agencies that serve low-income families, and meet other requirements. See the U.S. Dept. of Education website for details.

For more about the Public Service Loan Forgiveness or Stafford Loan Forgiveness Program for Teachers, download this PDF flier about loan forgiveness.

If you are having trouble making your loan payments, you might qualify for a deferment, forbearance, or other form of payment relief. See the U.S. Department of Education’s information on Postponing Repayment.

ESTIMATING PAYMENTS FOR OTHER LOAN TYPES

Perkins, Health Professions, and Nursing Loans

You can estimate your monthly payments on your Perkins, Health Professions, or Nursing Loan using FinAid's Loan Calculator. Enter the interest rate (5%), the loan term (10 years), and the minimum payment ($40). You will also need to enter the loan balance, which is shown on the View Student Loan Summary page of Wolverine Access. (Log in to the Student Business section of Wolverine Access and select Financial Aid > Aid Year > Loans > View Student Loan Summary.)

Once you've entered the required information in the calculator fields, select "calculate."  If you select" Print Payment Schedule," you will receive detailed information about your repayment schedule.  

Private Loans

You can also use FinAid's Loan Calculator to estimate your monthly payments for a private loan. (For more about private loans, visit this page.) Your interest rate, loan term, and minimum monthly payment are all shown on the master promissory note for the loan. You will also need to enter the loan balance, which is shown on the View Student Loan Summary page of Wolverine Access. (Log in to the Student Business section of Wolverine Access and select Financial Aid > Aid Year > Loans > View Student Loan Summary.)

Once you've entered the required information in the calculator fields, select "Calculate."  If you select "Print Payment Schedule," you will receive detailed information about your repayment schedule.  

FEDERAL CONSOLIDATION LOANS

Federal loan borrowers can combine different types of federal loans with various repayment schedules into a Direct Consolidation Loan with one single monthly payment. For more information about this option, visit the Federal Loan Consolidation page.

More tips from Federal Student Aid: