Options If You’re Struggling to Repay Your Direct Consolidation Loan

Calendar Icon Updated February 21, 2019
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The repayment period for a Direct Consolidation Loan begins immediately after consolidation, with the first payment being due approximately 60 days after the loan is disbursed. If you’re currently having trouble making payments (or think you’ll have trouble with upcoming payments), you can apply to get a deferment or forbearance.

Deferments

With a deferment, you get permission to temporarily stop making payments on the Direct Consolidation Loan.

The following are examples of times when you’re likely eligible for a deferment.

  • During a period of time when you’re enrolled at an eligible school for at least half time.
  • During a period of study in a graduate fellowship program.
  • During a period of time when you are in an approved full-time rehabilitation program for individuals with disabilities.
  • During a time of unemployment when you’re unable to find a full-time job.
  • During a time when you are experiencing an economic hardship (including when you’re serving as a member of the Peace Corps).
  • While you are on active duty military service during a war, other military operation, or national emergency.
  • During the 13-month time period following the end of active duty military service (or until you return to enrolled student status on at least a half-time basis, whichever is earlier) if you are a member of the National Guard or other reserve component of the U.S. Armed Forces (current or retired). (You must also have been called or ordered to active duty while you were enrolled at least half time at an eligible school or within six months of having been enrolled at least half time.)

During a deferment, the federal government will pay the interest on a Federal Perkins Loan, a Direct Subsidized Loan, and/or a Subsidized Federal Stafford Loan. You’ll be responsible for the interest on unsubsidized loans, though you don’t have to pay it during the deferment period. Instead it can be added to your principal loan balance.

Forbearance

A forbearance allows you to stop making payments for a while or to make reduced payments for a temporary period of time. Interest continues to accrue when you’re in a forbearance period.

You might get a forbearance if you are having trouble making your loan payments due to a financial hardship or illness.

You will get a forbearance if:

  • You’re serving in a medical or dental internship or residency program (and you also meet certain criteria).
  • The total amount you have to pay each month on your student loans is 20% or more of your total monthly gross income (and you meet certain conditions).
  • You are serving in a national service position and you received a national service education award under the National and Community Service Act of 1993.
  • You qualify for loan forgiveness under the Teacher Loan Forgiveness program (which is available to certain Direct Loan and FFEL program borrowers).
  • You qualify for partial repayment of your loans under a U.S. Department of Defense repayment program.
  • You have been called to active military duty, but you are not eligible for a military deferment.

To request a forbearance, contact your loan servicer.

Eligibility Team

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