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Repayment Options

We are here to help our students and alumni with repayment choices and assistance. Before your loans enter repayment, you may want to consider different repayment options.

Standard Repayment Plan

Each monthly payment is the same amount throughout the repayment period. The repayment plan is up to 10 years and the amount may be adjusted if there are changes in the variable interest rate.

Graduated Repayment Plan

The monthly payment amount generally starts lower and increases at scheduled times throughout the repayment period. An interest only payment for the first two to four years and it usually takes up to 10 years to repay.

Income-Contingent Repayment Plan (Direct Loan only)

The monthly payment amount is adjusted annually based on your AGI, family size and the total amount of your Direct Loans; it has a 25-year repayment period.

Extended Repayment Plan

Certain borrowers with more than $30,000 in outstanding principal and interest may repay over a period not to exceed 25 years.

Income-Based Repayment Plan (IBR)

The monthly payment amount is adjusted annually based on your income, family size, and federal student loan debt. Monthly payments will be based on 15 percent of your discretionary income. Any outstanding principal and interest owed after 25 years of qualifying payment will be forgiven; however, you may have to pay income tax on any amount forgiven.

Revised Pay As You Earn Repayment Plan (REPAYE)

The monthly payment amount is adjusted annually based on your income, family size and federal student loan debt. Direct loans ONLY are applicable. Monthly payments will be based on 10 percent of your discretionary income. Any outstanding principal and interest owed after 20 or 25 years of qualifying payments will be forgiven. If married, both you and your spouse will be considered whether you file jointly or separately.

 *Please utilize the Estimated Loan Calculators to further assist you with selecting your Repayment Plan*

Understanding Deferments & Forbearances

If you have difficulty making your payments contact your lender, holder or servicer immediately to determine if you qualify for either a deferment or forbearance.

Deferment

Deferments are a period of time during which a lender temporarily postpones regular payments. Deferments are considered an entitlement, which means your lender must grant them if you qualify. It is your responsibility to request a deferment from your lender and provide the necessary documentation for eligibility. If you have been given a deferment, the federal government will pay the interest that accrues on your Subsidized Stafford Loan; however, you will be responsible to pay the interest accruing on the loan.

Forbearance

A lender temporarily reduces, extends, or postpones regular loan payments.  Forbearances are usually granted if medical or  dental interns enroll in an internship and have exhausted their deferment  eligibility if the borrower is serving in a national service position under the  National and Community Service Trust Act of 1993; and if annual debt equals or exceeds 20% of a borrower’s disposable income. The federal government does not pay the interest accrued on the Subsidized Stafford Loan. You are responsible for interest and principal amount on both the Subsidized and Unsubsidized Stafford Loans.

Delinquency Through Default

Delinquency occurs when a borrower fails to make monthly payments on time; the student is considered delinquent when missing one payment.  History of payments is reflected on a borrower’s credit report and will be reported to the National Credit Bureau. If no payments are made from Day 1 to Day 270, the lender may submit a claim to the guarantor which takes 90 days to process the claim; there are 360 days of period of default.

Consequences Of A Borrower In Default:

  • Charged up to 25% in collection fees
  • Interest rates can increase
  • Wages may be garnished
  • Borrowers’ may lose their professional license (e.g. Medical, Law)
  • Borrowers will lose their eligibility for future financial aid

Need more information?

Contact the financial aid staff at finaid@scnm.edu or call us at 480.222.9202