Alumni-Loan Repayment Options

Federal Loan Repayment Plans

Standard Repayment

• A fixed payment that remains the same during the repayment period.
• 10-year repayment term.
• Consolidation Loans have fixed payments for up to 10 to 30 years based on total education indebtedness.

Standard Repayment is the schedule your loan servicer will select for you unless you specifically request another option. It's also the option that will allow you to pay the least amount of total interest.

Graduated Repayment

• A repayment plan that allows for smaller payments early on (usually when your income is lower), and higher payments in later years (when your income is likely to be greater).
• Non-Consolidated Loans- borrowers have smaller payments that increase every two years for up to 10 years
• Consolidated Loans- borrowers have smaller payments that increase every two years for up to 10-30 years based on total education indebtedness.

Income-Sensitive Repayment (for FFEL borrowers only)

• Monthly payment based on the percentage of gross monthly income.
• Payments are adjusted annually based on expected total gross monthly income. (The only requirement is that the amount is enough to pay at least the interest that accrues every month.)
• Maximum 10-year repayment period.

Income-Contingent Repayment (for DL borrowers only)

• Payments are adjusted annually, based on borrower's household income, family size and total loan debt.
• Not available for parent-PLUS loan borrowers.
• Maximum 25-year repayment period.
• At the end of 25 years, any remaining balance is discharged. This write-off is taxable under current law.

Extended Repayment

• New borrowers with more than $30,000 in outstanding loan debt on or after Oct. 7, 1998.
• Payments can be fixed or graduated.
• Maximum 25-year repayment period

Income-Based Repayment (IBR)

• The IBR program "caps" loan payments at 15% of your income that exceeds 150% of the federal poverty guideline for your family size.
• A borrower can choose to participate in this payment plan for up to 25 years.
• At the end of 25 years, any remaining balance is discharged. This write-off is taxable under current law.
• For more information about IBR (including an excellent set of FAQ's), please visit

Institutional Loan Repayment Options

ECSI (Educational Computer Systems, Incorporated) provides billing services for the Federal Perkins, Primary Care Loan (PCL), Chicago College of Osteopathic Medicine (CCOM) Loan, David Monash Loan, Edna Dunning Loan and Lucas Loan programs. Upon entering repayment, you will receive bills from ECSI as scheduled and should make payments directly to them. Midwestern University will receive and process changes of address and cancellation/deferment/forbearance forms. The Loan Repayment Office is in daily contact with ECSI and has online access to student loan information.

For more information, contact the MWU Loan Repayment Office at 1.866.729.2698 or visit our website.

Private Loan Repayment Options

In many cases, borrowers are not aware of the different types of repayment plans for private loans. Most lenders generally offer the same type of repayment options as federal loans. These include full loan deferment; interest only repayment or immediate interest and principle payment. Depending on the total amount borrowed, repayment terms for private student loans typically range from 10 to 25 years. For more information, please contact your lender for loan repayment options, deferment/forbearance options, etc.

Federal Direct Loan Consolidation

Borrowers can combine multiple federal student loans into a single loan. Private and institutional loans are ineligible for federal loan consolidation. Here are some pros and cons to federal loan consolidation:

• Obtain a fixed interest rate and one combined monthly payment
• Extend the time for repayment (up to 30 years)
• Reduce the monthly payment amount
• Pay in full one or more of your existing federal student loans (Note: Borrowers who consolidate lose the terms of their original federal loans such as loan cancellation provisions)
• You may pay MORE overall

For more information, contact the Federal Direct Consolidation Loans Information Center at 1.800.557.7392 or visit .

Public Service Loan Forgiveness Program

The College Cost Reduction and Access Act of 2007 established a new public service loan forgiveness program. This program provides for the forgiveness or cancellation of the remaining balance (principal and interest) due on eligible Federal Direct Loans after 10 years of full-time employment in public service. The borrower must have made 120 payments as part of the Direct Loan program in order to obtain this benefit. Only payments made on or after October 1, 2007 count toward the required 120 monthly payments. Borrowers must consolidate into Direct Lending in order to qualify for this loan forgiveness program.

For more information, visit the Public Service Forgiveness FAQ's.

Additional Loan Repayment Information

No Pre-Payment Penalty

There is no penalty for paying off your loans early. Any excess payment is applied to the interest first and then to the principal unless the borrower specifies that he or she wants to excess amount to go towards the principal. The borrower must send in a note with the payment stating to apply the excess funds to the principal. If a borrower is in the income contingent repayment plan, it is not advisable to make a prepayment due to the way the plan treats the interest.

Switching Repayment Plans

Your lender or servicer may restrict your ability to change repayment plans to once a year. We suggest that you check with your lender or servicer to determine if there are restrictions on how frequently you can change your repayment plan.

The maximum loan term for the new plan has to be longer than the amount of time your loans have already been in repayment. For example if you are in year 26 of a 30 year the extended repayment plan, you cannot switch to the income contingent plan which has a maximum 25 year repayment and have the remaining balance written off.

Consequences of Default

If a borrower fails to repay his/her student loan on a timely basis, he/she will be considered in default and may encounter the following severe consequences:

• Default reported to national credit bureaus, which may cause a negative effect on the borrower's credit rating.
• Assessment of late charges to your student loan account.
• Possible loss of deferment, forbearance and cancellation options.
• The borrower may be ineligible to receive additional federal or state federal aid.
• The entire unpaid balance of the loan, including interest, may become due immediately.
• Placement of the loan with an attorney or collection agency. Costs associated with the collection of any loan will be added to the amount owed.
• The borrower may be sued to force payment and may be liable for court and attorney fees.