Repayment is the paying off the loan amount borrowed plus interest. There are various repayment options for Federal Direct Loans. Visit Federal Student Aid website http://studentaid.ed.gov/repay-loans/understand/plans for more information.
Repayment of Federal Direct Loans typically commences after a grace period. A grace period is the interval between graduation or termination of at least half-time studies (6 credits) at Union and the commencement of repayment. During this period, repayment need not be made. However, interest will accrue on certain Direct Loans. Different federal loans have different grace periods before repayment must begin. Your first payment is typically due within 60 days of the date that the loan enters repayment.
You should periodically review your repayment plans and contact your lender, loan holder, or servicer for help in determining what options may be available. Of course, you may prepay your loan with no penalty or use one of the available repayment plans.
Repayment of Institutional Loans (the Perkins and the Union Loan) is handled differently. Repayment of Perkins loans commences after a 9 month grace period following graduation or after your enrollment status drops to less than half-time (6 credits). The repayment period is 10 years. If you have a Perkins Loan, you will be required to sign a repayment schedule with the Office of Financial Aid prior to leaving the Seminary.
Union Theological Seminary is the owner of your Perkins Loan. Xerox Education Service, Inc. is the service provider. If you borrowed a Perkins Loan, you should report address and name changes to Xerox Education Service, Inc.:
Xerox Education Services, Inc.
5 Boulder Ridge.
New Gloucester, ME 04260.
Repayment of the Union Seminary Loan commences after a 3-month grace period following graduation or your withdrawal from the Seminary. During the grace period, you are not required to make payment and no interest accrues on the loan.
Union Theological Seminary is the owner of your Union Loan. Campus Partners, Inc. is the service provider. If you borrowed a Union Loan, after you leave the Seminary you should report address and name changes to Campus Partners:
P. O. Box 2902
Winston-Salem, NC 27102
Borrower Service: 800-334-8609
Another federal loan repayment option is federal loan consolidation (consolidation is not available for the Union Loan). A Federal Consolidation Loan (FCL) is a loan that you can borrow to pay off some or all of your existing eligible federal student loans, both graduate and undergraduate. The FCL has a fixed interest rate with a repayment term of up to 30 years, depending on your total student loan debt, including any private student loans you may have. There are good reasons for and against an FCL and an FCL has its own repayment terms. For more information, you should contact your lender.
If you borrowed private loans, there are a variety of repayment options available, including consolidation. Generally, the repayment period for a private loan is 20 years. For more information, you should contact your lender.
Deferment and Forbearance
If you are experiencing difficulties making your loan repayments, you should contact your lender and loan servicer right away. If you fail to make timely payments, it can negatively impact your credit rating. A negative credit history can make it difficult to purchase a home, rent an apartment, buy a car, etc. It may be possible to suspend repayment for a specified period of time. You should be proactive in contacting your lender when you face difficulties making loan repayments.
It may be possible to defer your repayment. Deferment is a period of time when you are allowed to postpone repaying the principal and/or interest on a loan. Most federal loan programs permit you to defer repaying your loans if you are enrolled in school at least half-time (6 credits). Deferments are an entitlement that your federal loan lender/holder/servicer must approve if you meet the requirements and provide necessary documentation.
Or, it may be possible to enter into a forbearance agreement with your lender/holder/loan servicer. Forbearance allows for temporary postponement of payments; extension of time for making payments; or temporary acceptance of payments that are smaller than required by the repayment schedule. Forbearances are available at the discretion of the lender for both federal and private loans.