Federal loan payment options
Student loan repayments begin again this year — here’s what students should do.
According to the federal student aid website, the U.S. Department of Education paused loan payments and set interest rates to zero percent for eligible student loans with the start of COVID-19 in March 2020. However, after three years, student loan interest resumed on Sept. 1, 2023, and payments will be due starting in October.
Christina Ayres is the director of federal aid in the student financial support department at USU.
“It’s crucial to be well informed and prepared about student loan repayments,” Ayres wrote in an article informing students about loan repayments.
One way Ayres said students can prepare themselves for repayments is by logging into their own portal on the federal student aid website, where they will be able to see the amount of money they owe and who their loan servicer is.
Ayres said it’s important for students to understand who their loan servicer is and how much they owe before starting repayment. After students do this, students should be aware of the types of repayment plans the Federal Student Aid offers.
Ayres said standard, graduated and extended repayment plans have set monthly payments and are more structured. However, she said the Federal Student Aid also offers income-driven repayment plans which are tailored according to the student’s income and family size.
For whichever repayment plan a student chooses, Ayres said it’s important to make the payment on time to maintain a good credit score and avoid additional interest or fees.
“For those who might find it challenging to keep up with payments, or are leaving for a few semesters, consider setting up automatic deductions or exploring deferment or forbearance options,” Ayres said.
Ayres said in certain professions or situations like school closure or disability, loans might be forgiven or discharged.
“It’s worth exploring these options to see if you qualify,” Ayres said.
Alex Pardinas, a sophomore at USU, said this year was her first year submitting a FAFSA because she needed to borrow money, but she wishes she knew more about the process before starting.
“Before applying to FAFSA I knew that there was a possibility to get grants and loans, but that was pretty much it,” Pardinas said. “I didn’t know which one accrued interest faster. I really couldn’t tell the difference between the two.”
Pardinas said she assumed she would have to call the financial aid office at the end of her college career or wait until she received a letter saying a payment was due.
“I really just signed up and just took out any money that I could get. I had no idea what kind of loan I was getting,” Pardinas said. “I don’t know when I’m going to have to pay it off, or how soon I’m going to have to start paying it off either.”
Ayres said a lot of past and present students have questions about the repayment process and the university wants to help them understand what they can do.
“Each student has their own federal aid counselor that they can set an appointment with and come in and we can explain everything about federal aid,” Ayres said.
She said even if students haven’t submitted a FAFSA yet, they can still meet with a counselor to learn more about how federal aid works.
“Utah State University is committed to helping students understand their options and providing counseling appointments for current or past students who need help with loan repayments,” Ayres said.
For more information on federal student aid, visit studentaid.gov.