What are the repayment options?
There are several valid options which offer temporary relief to individuals who are having trouble repaying their student loans.
Standard Repayment Schedule
With the Standard Repayment Schedule plan, your loan is repaid in equal monthly payments over a 10-year period or 120 equal payments. The minimum monthly payment is $50, but the actual monthly cost depends on your loan balance and interest rate.
Graduated Repayment Schedule
A Graduated Repayment plan is ideal if you have a limited income today but expect to have higher earnings in the future. The mnthly payments begin low and increase gradually as your income increases. The initial monthly payments must be high enough to cover each month's interest. This option may increase the total amount you will be required to repay as more interest may accrue over the life of the loan.
Income Sensitive Repayment Schedule
An Income Sensitive plan allows you to pay based on your income. You will be required to provide proof of your gross income, and your servicer will calculate the amount you should reasonably be able to pay. To stay on the Income Sensitive Repayment Schedule, you will have to provide your servicer with proof of income annually. Your repayment amount will be adjusted each year based on your gross income. This option will increase the total amount of your loan and may extend your repayment period.
Income Based Repayment
Monthly payments are capped at a percentage of the borrower’s discretionary income. The monthly payment is based on income, family size and total amount borrowed. Click here for a calculator that will assist you in estimating your monthly payment amount under the income-based repayment plan.
What are the consequences of default?
Missing payments can result in default. If the student loan defaults, borrowers may:
- experience wage garnishment, income tax offset, suspended professional licensure, and/or denied/derogatory credit being reported to national credit reporting agencies;
- become ineligible to receive other assistance from federal student programs; and/or
- be required to pay all charges and costs (including attorney fees) permitted by law for the loan collection and possible other legal action.
Your loan can default from a lack of paperwork as easily as from a lack of payment. For that reason, it's important to keep your loan holder informed of any changes in your status, as well as your current address and a daytime phone number.
What are the options to avoid default?
Options such as deferment or forbearance may be available to assist you.
A deferment allows you to postpone student loans payments for a specified amount of time. You are still responsible for the loan, and, at the end of the deferment, the loan will enter repayment. You may be responsible for payment of the accrued interest on your account while you are in a deferment status. Consult with your student loan servicer to determine if you are responsible for the interest during the deferment period. At the expiration of the deferment, you will be responsible for making payments.
Deferments you may be eligible to receive include:
- Economic hardship
- In-School enrollment
- Unemployment
- Military deployment and
- Similar situations.
Forbearance allows you to suspend payments on your student loans for a specific amount of time under certain circumstances. While in forbearance, your loan accrues interest that if not paid will be capitalized when the forbearance ends. When the forbearance ends, the loan will enter repayment and you will be responsible for making payments.
To determine eligibility for deferment or forbearance, please contact your student loan servicer. If your loan is with ESF Student Loan Servicing, click here to download the forbearance form.
If your loan is serviced by MHEAC (Mississippi Higher Education Assistance Corporation), please use the following contact information):
Phone: 800.362.1304
Fax: 601.321.5584
E-mail: msaffold@esfweb.com
Mailing Address:
Student Loans
Attn: Default Prevention
2600 Lakeland Terrace
Jackson, MS 39216
