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Loan Default Prevention


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

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.

To discuss receiving a deferment during a life crisis, please contact your loan servicer. They will be able to assist you. If you need assistances in contacting your loan servicer, please contact the MSSU Default Prevention Counselor. This person will be able to assist you in contacting your loan servicer.


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 after July 1st, 2023 and before July 1st, 2024.

The chart below shows the loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Oct. 1, 2019.


Loan Type First Disbursement Date Loan Fee
Direct Subsidized Loans and Direct Unsubsidized Loans  On or after 10/1/20 and before 10/1/24 1.057%
On or after 10/1/19 and before 10/1/20 1.059%
Direct PLUS Loans On or after 10/1/20 and before 10/1/24 4.228%
On or after 10/1/19 and before 10/1/20 4.236%

Loans first disbursed prior to Oct. 1, 2019, have different loan fees. (source:

Loan Information

Direct Subsidized 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.

Direct Unsubsidized 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.


Loan Consolidation

For more information please see online.

Who is my Loan Servicer?

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

How Do I Complete Exit Counseling?

Exit Counseling:

Direct Loan Exit Counseling and/or TEACH Grant Exit Counseling: Go to site, login with your FSA User ID and password. Click on “Manage Loans”, then click “Complete Exit Counseling”. You will be given a choice to complete your Direct Loan Exit Counseling or your TEACH Grant Exit Counseling.


Cohort Default Rates

A cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year. Missouri Southern State University’s most recent cohort default rate (2020) is 0.0%.