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Loan Default Prevention

Financial Aid

What is Defaulting and how can I avoid it?

What is default | Can student loans be "forgiven" | Student loan cancellation, forgiveness, and discharge

Interest Rates |   Loan Information | Loan Consolidation | Why Consolidate My Loans | Who is my Loan Servicer

What is default?

Failure to make required loan payments according to the terms agreed upon. The consequences of default are severe.


Can student loans be "forgiven?"

Under certain circumstances, a person may be able to have all or part of a student loan(s) forgiven.
If you have any questions regarding your student loans, check with the financial aid office or your loan provider.


Student loan cancellation, forgiveness, and discharge

Student must be in "good standing" to be eligible . This benefit does not happen automatically. You must apply and be approved to receive the benefit.

A deferment is when a borrower is allowed to postpone repaying a loan for a certain amount of time. Deferments are available while a person is at school at least half time, during periods of unemployment, military service, or any economic hardship. Other deferments may be available depending on what you have borrowed. A forbearance is when the lender allows the borrower to postpone repaying your monthly loan for a certain amount of time. The interest still will continue to accrue, even on subsidized loans. This interest must be paid. If you do not pay the interest, your loan holder will add it to your existing balance when your forbearance ends.

*A person must REQUEST deferments or forbearances for each loan.


Interest Rates

The interest rates for Direct Subsidized, Direct Unsubsidized, and Direct PLUS loans will be established each year.  Once a loan is established, it will apply for the life of the loan- that is, the loan will be a fixed-rate loan.  As a result, it is likely that many borrowers will have a set of fixed-rate loans, each with a different interest rate, including the 3.86% Direct Subsidized and Direct Unsubsidized loans made prior to July 1st, 2014.

*Please note that the current loan interest rates apply to those loans first disbursed on or or after July 1st, 2014 and before July 1st, 2015.

Undergraduate Students

Loan Type Interest Rate Interest Rate Cap
Subsidized Stafford Direct Loan 4.66% 8.25%
Unsubsidized Stafford Direct Loan 4.66% 8.25%
Parent PLUS Direct Loan 7.21% 10.50%

Graduate Students

Loan Type Interest Rate Interest Rate Cap
Unsubsidized Stafford Direct Loan 6.21% 9.50%
Graduate PLUS Direct Loan 7.21% 10.50%


Loan Information

Subsidized Stafford Loans: Subsidized means the government is "subsidizing" the interest on your loans while you are in school or while your loan is in deferment or a grace period. Interest will not begin to accrue until you enter repayment. You must meet certain requirements to qualify for subsidized loans.

Unsubsidized Stafford Loans: Interest begins to accrue on this type of loan from the time you receive your disbursement and continues through the life of the loan. You have the option of paying your interest quarterly while you are in school. If you do not, the interest that has accrued on your unsubsidized loans will be "compounded" at the time you enter repayment.

Perkins Loans: Generally, have the same characteristics as a Subsidized loan. No interest accrues on a Perkins Loan while you are in school or while your loan is in a grace period or a deferred status.


Loan Consolidation

Loan Consolidation is when a loan program allows a borrower to combine various loans into one new loan.


Why Consolidate My Loans?

If you know your interest rate will increase over many years, a loan consolidation can be helpful because it allows you to lock in a lower interest rate for the life of your loan. Consolidating your student loans can helps ease your finances and make repayment easier in the end. Consolidating your student loans can reduce your monthly payment by 10% and up to 60%

Make sure you think hard about consolidating a loan because there are many "ifs and buts". If you have any questions, please call to make an appointment with a financial aid officer to help you.

*If you would like to consolidate your student loans, go to


Who is my Loan Servicer?

You can go to the Direct Loan website which allows you to find phone numbers and websites of your loan servicer.


Contact Information:

Sharon Fraser, Default Prevention Counselor


Phone: 417.625.9867

General Information:

Missouri Southern State University, Financial Aid Office


Phone: 417.625.9325