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Debt management goes a long way when repaying student loans

When you graduate or stop attending Columbia College, it is time to start repaying student loans. But don't worry, it doesn't have to be scary. With a little planning and good debt management, repayment should not be a problem.

Repaying your loan

If you have graduated or stopped attending Columbia College, it is time to start repaying student loans. We’ve provided information and links to resources that will help. If you have additional questions, contact the Columbia College Financial Aid Office.

You are required to start repaying your Federal Stafford Loan six months after you graduate, leave school or drop below half-time attendance. Your parents are required to begin repaying PLUS loans 60 days after the loans are fully disbursed, however they may request a deferment.

Information about your federal education loans is available through the National Student Loan Data System. Federal loans, including FFEL and Stafford Loans, PLUS loans and Perkins Loans, will be available through this system, but please note that any private loan will not appear in this database.

If you find yourself unable to manage student loans, contact your lenders to let them know your circumstances. In most cases, mutually beneficial arrangements can be made. Do not simply stop making payments.

Payment relief

In special circumstances, you can postpone paying back your loans through deferment. During deferment periods, interest does not accrue. If you are enrolled at least half-time in a postsecondary school, graduate fellowship or rehabilitation program if you have disabilities, you may qualify for deferment. If you are unemployed, you may be able to get determent up to three years.

If you don’t qualify for a government-approved deferment, you may request forbearance from your lender, which can delay or reduce your monthly payments. However, you must still pay the interest on your loan during the deferment period.

You may get additional information from the U.S. Department of Education.

Loan forgiveness

If you teach elementary or secondary school, you may be eligible for special deferment options and, in some cases, cancellation of a portion of your student loan debt. The U.S. Department of Education has more information.

Individuals who enter and work full-time in public sector jobs may apply for Public Service Loan Forgiveness.

To discuss deferring or canceling federal Stafford loans, contact your loan servicer for application forms. Contact information is available through NSLDS.

To discuss deferring or canceling a Perkins loan you borrowed at Columbia College, forms are available from University Accounting Service. If you borrowed Perkins loans at another school, contact that school.

It’s possible to have your student loan debt canceled or reduced under certain specific circumstances.

Loan consolidation

Consolidating all of your education loans lets you have one monthly payment and generally allows you to extend the repayment period beyond 10 years.

Federal consolidation loans:

  • Fixed interest rate based on a weighted average of the current rates on your existing loans
  • Deferment options are predetermined by federal regulations
  • Cannot include private loan funds

Private consolidation loans

  • Can include both federal and private loan funds, however this is not recommended because federal consolidation loans offer lower interest rates and better benefits
  • Usually a variable interest rate based on your credit score
  • Forbearances are available only at the lender’s discretion

Please note that any consolidation loan is likely going to significantly increase the total amount of interest that you will be required to pay. If you are meeting your currently monthly repayment obligations, it may be best to avoid consolidation.

You can estimate the amount you can afford to pay, based on your monthly income, using the FinAid Calculator.

Repayment plans

Standard — Payments are fixed and made for up to 10 years

Extended — Lower payments are made for up to 25 years

Graduated — Lower payments gradually increase every two years up to 10 years

Income based — Payments are based on income and family size

Income contingent — Payments are 20 percent of discretionary income or a fixed payment over 12 years adjusted according to income

Income sensitive — (FFEL Loans only) Payments increase or decrease based on annual income

Pay as you earn — Payments are 10 percent of discretionary income but never more than the 10-year Standard Repayment Plan amount

Examples of monthly and total payments on original loans using different repayment plans
Repayment plan $5,000 loan ($) $20,000 loan ($) $50,000 loan ($)
Standard 58 230 575
Graduated 33-100 133-398 332-996
Income-based contingent 35-50 140-202 225-572
Standard total 6,905 27,619 69,048
Graduated total 7,430 29,720 74,300
Income-based contingent total 8,834 35,338 114,483

Standard plan payments on original loans example
Repayment amount $5,000 loan ($) $20,000 loan ($) $50,000 loan ($)
Monthly payment 58 230 575
Total 6,905 27,619 69,048
Graduated plan payments on original loans example
Repayment amount $5,000 loan ($) $20,000 loan ($) $50,000 loan ($)
Monthly payment 33-100 133-398 332-996
Total 7,430 29,720 74, 300
Income-based contingent plan payments on original loans example
Repayment amount $5,000 loan ($) $20,000 loan ($) $50,000 loan ($)
Monthly payment 35-50 140-202 225-572
Total 8,834 35,338 114,483

Note: Payments are calculated using the interest rate of 6.8 percent for student borrowers with an estimated Adjusted Gross Income of $25,000 and a family size of 1.

Defaulting on student loans

If you fail to repay your loan, you will be in default and your credit rating will be damaged. This may impact your ability to borrow money for a home, vehicle or additional education. Your wages may be garnished, and your federal and state income taxes may be withheld. Your loan could be sent to a collection agency, and you would be liable for collection fees.

Student loan borrowers in default do have options to repay their loans. Learn more from the U.S. Department of Education.

If you are having a dispute with your servicer or an agency regarding repayment of federal student loans, you may contact the Federal Student Aid Ombudsman for assistance.

U.S. Department of Education
FSA Ombudsman
830 First Street, NE
Fourth Floor
Washington, DC 20202-5144
(877) 557-2575

Debt management resources

Columbia College has partnered with Inceptia, a student loan counseling and default prevention agency, to provide students with resources about repayment options. While they are not a collection agency, students may receive calls, letters or emails from Inceptia to discuss student loan repayment and possible options, which may include alternative repayment plans, deferment, consolidation, discharge, forgiveness or forbearance. 

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