Loan Repayment Information
FAME is here to help you throughout the loan repayment process and provides repayment counseling and debt management solutions to borrowers throughout Maine. In the event you are temporarily unable to make your student loan payment(s), FAME can help you identify a solution to prevent delinquency, including alternative repayment options or possibly payment postponement. It is important that you understand all of your rights and responsibilities. Successful loan repayment is a key element in ensuring a strong financial future!
As a borrower of a federal student loan, you have certain rights and responsitilities:
You have a right to:
- Be informed by your lender, servicer or school of:
- The contact information of the lender or servicer that holds your loan.
- The amount of your total loan debt including principal, interest and any other fees or charges.
- A grace period and an explanation of what this means.
- A maximum of ten years to repay your student loan (unless you are approved for a deferment, forbearance, or make other payment arrangements).
- Prepay your loan in whole or in part at any time without an early repayment penalty.
- Request a deferment or forbearance for a certain defined period, if you make the request and qualify.
You are responsible for:
- Repaying your entire student loan according to the terms of your promissory note even if you do not complete your academic program, are dissatisfied with the education you received or are unable to find employment after you graduate.
- Making your monthly loan payments even if you do not receive a billing statement from the servicer of your loan.
- Completing and submitting all requested forms and documents to your school, lender or servicer.
- Maintaining copies of all your loan documents for your records.
- Notifying your school, lender or servicer of changes to your:
- Name
- Address
- Telephone number
- Enrollment status
FFELP Loans
There are four basic repayment plans available for your FFELP Stafford loans:
Standard Repayment Plan: With the Standard Repayment Plan, you will pay equal monthly payments of a minimum of $50 per month. Your monthly payment may be higher, depending upon the amount of the loan. The maximum repayment period is 10 years.
Graduated Repayment Plan: Under the Graduated Repayment Plan, your payments will be lower at first and then increase over time. Each payment must be at least enough to cover the interest that accrues. Generally you will repay the loan within 10 years.
Income Sensitive Repayment Plan: The Income Sensitive Repayment Plan bases your monthly payment on your annual income and your loan amount. As your income increases, so will your monthly payments. Each payment must be at least enough to cover the interest that accrues.
Extended Repayment Plan: The Extended Repayment Plan is available to borrowers who borrowed their first loan on or after October 7, 1998 and who owe more than $30,000. Under this plan, your payments can either be fixed or graduated, and the maximum repayment period is twenty-five years.
Income-Based Repayment (IBR): Under this plan, your required monthly payment amount will be based on your income during any period when you have a partial financial hardship. Your monthly payment amount may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you repay under this plan and meet certain other requirements over a specified period of time, you may qualify for cancellation of any outstanding balance on your loans. Contact your loan servicer for more information.
Sample Monthly Payment Chart - Federal stafford & Grad PLUS Loans:
| Loan Amount |
Interest Rate |
| |
5% |
6% |
7% |
8.5% |
| $5,000 |
$53.03 |
$55.51 |
$58.05 |
$61.99 |
| $6,000 |
$63.64 |
$66.61 |
$69.67 |
$74.39 |
| $7,000 |
$74.25 |
$77.71 |
$81.28 |
$86.78 |
| $9,000 |
$95.46 |
$99.92 |
$104.50 |
$111.58 |
| $10,000 |
$106.07 |
$111.02 |
$116.11 |
$123.98 |
| $15,000 |
$159.10 |
$166.53 |
$174.16 |
$185.97 |
| $20,000 |
$212.13 |
$222.04 |
$232.22 |
$247.97 |
| $25,000 |
$265.16 |
$277.55 |
$290.27 |
$309.96 |
*Please note: The amounts listed are estimates using an interest rate of 8.25%. You will receive exact payment amounts before you begin repayment.
Direct Loans
There are also five basic repayment options available for Direct Stafford Loan borrowers:
- Standard Repayment Plan
- Extended Repayment Plan
- Graduated Repayment Plan
- Income Contingent Repayment Plan
- Income-Based Repayment (IBR)
Perkins Loans
In the Federal Perkins Loan program, your payment depends upon the amount of the loan. Generally, your minimum monthly payment will be $40. However, your payment may be higher depending on your loan balance.
Sample Perkins Loan Repayment Chart
| Total Borrowed |
Number of Payments |
Monthly Payment |
Total Interest Charges |
Total Repaid |
| $10,000 |
120 |
$123 |
$4,718 |
$14,718 |
| $15,000 |
120 |
$184 |
$7,077 |
$22,077 |
| $20,000 |
120 |
$245 |
$9,437 |
$29,437 |
*Please note: The amounts listed are estimates using an interest rate of 5%. You will receive exact payment amounts before you begin repayment.
In some situations, your loan may be discharged (canceled). Go to the U.S. Department of Education Website for more information on:
Summary of Cancellation/Discharge Provisions:
Federal Stafford Loans
- Borrower's Total and Permanent Disability
- Full-time teacher for five consecutive years in a designated elementary or secondary school serving students from low-income families, if the Stafford loan was disbursed after October 1, 1998
- Closure of the school (before student could complete program of study) or false loan certification
- School does not make required return of loan funds to the lender.
Federal Perkins Loans
- Full-time teacher in a designated elementary or secondary school serving students from low-income families.
- Full-time special education teacher (includes teaching children with disabilities in a public or other nonprofit elementary or secondary school).
- Full-time qualified professional provider of early intervention services for the disabled.
- Full-time teacher of math, science, foreign languages, bilingual education or other fields designated as teacher shortage areas.
- Full-time employee of a public or nonprofit child or family-services agency providing services to high-risk children and their families from low-income communities.
- Full-time nurse or medical technician.
- Full-time law enforcement or corrections officer.
- Full-time staff member in the education component of a Head Start Program.
- Vista or Peace Corps volunteer.
- Service is the U. S. Armed Forces.
If you default on your federal student loan, it means that you did not make your monthly payments. Your Stafford loan is considered to be in default if you are 270 days delinquent. Your Perkins loan may be considered to be in default if you fail to make your payment on the date due.
Consequences of Default
If you default on your federal student loan(s), one or more of the following may occur:
- Damage to your credit rating, which could impact your ability to borrow in the future.
- Referral of your account to a collection agency.
- Collection charges may be added to your loan.
- Garnishment of your wages.
- Withholding of your state or federal tax refunds.
- Civil lawsuit, including court costs and legal expenses.
- Loss of deferment and forbearance options.
- Loss of eligibility for further financial aid.