Student Loan Repayment

• Visit StudentAid.gov and login using your FSA ID (the username and password you used to file the FAFSA). There you can explore repayment options, locate your servicer, and reauthorize or set up auto-pay.
• Create or update your online account with your servicer and provide your current contact information. Be sure to respond to any emails or letters from your loan servicer.
• Review your loan amount, payment due date, monthly payment amount, and current repayment plan, and determine which repayment plan is best for you.
• To locate your private loans, you can request a copy of your free credit report.

Pro Tip: Sign up to receive federal student loan repayment updates at  StudentAid.gov. Through your account settings, click on “Communication Preferences” and opt in to receive informational emails and/or texts.

• Numerous repayment options exist that may help reduce your monthly payment. Use the Federal Student Aid Loan Simulator to estimate your monthly payment and choose a repayment option that best meets your needs and goals.
• If you have a private loan, refinancing may help you reduce your monthly payment. Learn more at FAMEMaine.com/Refi.
• Federal Loan Consolidation allows you to consolidate (combine) one or more federal education loans into a new Federal Direct Consolidation Loan for the purpose of lowering monthly payments or gaining access to federal forgiveness programs.
• Struggling to make your monthly payment? Contact your servicer immediately as they can help you avoid delinquency and default. If you have already defaulted, your servicer can help get your loans back into good standing. Learn how to avoid delinquency and default.

Pro Tip: Need help with your finances, or a budgeting tool to help you plan for student loan repayment? Check out FAME’s free online financial wellness tool at FAME.Enrich.org.

• Public Service Loan Forgiveness (PSLF) is available to individuals who are employed by a government or a not-for-profit organization. Learn more about PSLF and other forgiveness programs.
• FAME administers several student loan repayment programs intended to assist people who live and work in Maine in certain occupations at Maine-based employers.
• Some employers offer student loan repayment as an employee benefit. Check with your Human Resources office.

Pro Tip: Watch out for student loan scams – you shouldn’t pay anyone for loan counseling or forgiveness. Be sure to keep all documentation and remain diligent. Find more information at StudentAid.gov.

• The Student Loan Repayment Tax Credit (often referred to as Opportunity Maine) provides a credit of up to $2500 per year through the Maine state tax return.
• The federal student loan interest deduction lets you deduct up to $2,500 per year in student loan interest paid from your taxable income. Learn more in publication 970 at IRS.gov.

Pro Tip: Even if you normally wouldn’t file a tax return because of your income level, be sure to and don’t miss out on tax credits that might put money in your pocket.

• Delinquency and default are avoidable. If you find yourself unable to afford your monthly student loan payment, it is important that you contact your student loan servicer immediately, as they can help you find a solution.
• Student loan delinquency occurs on the first day you miss a student loan payment; default occurs for most federal student loans when you are 270 days delinquent. Past due student loans are reported to all national credit bureaus and your servicer will initiate collection actions. Defaulting on your student loan may also result in:
  • Long-term damage to your credit rating, impacting your ability to qualify for other types of loans
  • Collection costs
  • Garnishment of wages (money deducted from your paycheck) and/or withholding of state or federal tax refunds
  • A civil lawsuit, which may result in court costs and legal expenses
  • Loss of deferment and forbearance options and eligibility for other financial aid
• Learn how to successfully manage disputes with your student loan servicer.

Pro tip: Be sure to notify your servicer of changes to your name, mailing address, or telephone number, and pay close attention to any correspondence from your servicer.

Completing this brief course is the first step toward successful private student loan repayment.