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Loan Default Prevention

Financial Aid

What is default | Can student loans be "forgiven" | Unable to Make Payments | Interest Rates 

Loan Information | Loan Consolidation | Who is my Loan Servicer | How do I Complete Exit Counseling

Financial Literacy Counseling

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 borrower may be able to have all or part of a student loan(s) forgiven/discharged.


Unable to Make Payments?


A student will qualify for an “In-School Deferment” when the student is enrolled at least half-time or more.  If a borrower has a documented hardship, a student may qualify for a “Deferment”.  A “documented hardship” includes, receiving Unemployment Benefits and/or public subsidy, etc.


Any borrower, who is unable to make a student loan payment, is eligible for a forbearance. The lender allows the borrower to postpone repaying monthly payment for a certain amount of time.  The interest will accrue and capitalize on ALL loans, during a forbearance if not paid while the forbearance is in effect. Receiving a forbearance is not automatic.  The borrower has to contact the loan servicer to request a forbearance.

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, 2017 and before July 1st, 2018.

Undergraduate Students

Loan Type Interest Rate Interest Rate Cap
Subsidized Stafford Direct Loan 5.045% 8.25%
Unsubsidized Stafford Direct Loan 5.045% 8.25%
Parent PLUS Direct Loan 7.595% 10.50%

Graduate Students

Loan Type Interest Rate Interest Rate Cap
Unsubsidized Stafford Direct Loan 6.595% 9.50%
Graduate PLUS Direct Loan 7.595% 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

For more information please see online.

Who is my Loan Servicer?

For more information on Unsubsidized and Subsidized Stafford Loans please see online.

How Do I Complete Exit Counseling?

Stafford Loans

Stafford Direct Subsidized and Unsubsidized Loans:  Log in online using your FSA ID.  Click on “Complete Counseling” and then click on “Start Exit Counseling” button.

Perkins Loans

Please log in online to complete Perkins exit counseling.

TEACH Grant 

Please log in online to complete TEACH Grant exit counseling.