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Office of Financial Aid and Scholarships

Division of Student Life and Enrollment

Loan repayment can be an intimidating subject for borrowers.  Whether you are considering borrowing or already in repayment, being informed can help you take control of your finances.

I'm worried about repaying loans.  What can I do?

Before you borrow any loan funds, remember to keep borrowing to a minimum.  Borrow only what you need to cover necessary expenses, not extras.  To lower your monthly payment, consider paying interest while in school or in your grace period before repayment.  Unpaid interest is added to your loan balance (capitalized) when you enter repayment. 

If you've already received a Direct Loan, take control!  Contact Direct Lending to talk about your repayment options.  Consider these payments as a part of your monthly spending plan to decide on the best option for you. 

I'm already in repayment for a loan, but I'm having trouble making payments.  What can I do?

Contact Direct Lending as soon as possible!  They can help you!  They can review your information to see if you qualify for a forbearance loan forgiveness, cancellation, or discharge , loan consolidation, or a change in your repayment option

Don't go into default by not making payments!  Not making payments can result in severe consequences like having your wages garnished, having your professional license revoked, and becoming ineligible for any federal aid in the future.  Avoid all these problems by contacting Direct Lending!

Learn more facts about default and repayment

What is loan forgiveness?  How do I know if I qualify? 

Some borrowers can have a portion of their entire loan forgiven or canceled.  You may qualify if you perform volunteer work with certain organizations, work as an educator in certain areas, or are enlisted in the Army National Guard.  Find out more about loan forgiveness .


Repayment Concepts & Tips


Now is a good time to come up with a monthly budget.   Try making a chart with your monthly payments including mortgage/rent, utilities, transportation, groceries, entertainment, non-monthly expenses (car insurance, vacation, repairs, etc.), and your estimated loan payment (based on your chosen repayment option).   Compare this to your expected monthly salary.   Changing your spending habits now is an effective way to prepare for entering loan repayment.   Make out a monthly budget and use the Direct Loan Program  Budget Calculator. 


Grace Period

In general, you must repay your loan even if you don't graduate, can't find work in your field of study, or are dissatisfied with the education program.  Keep in mind that your Federal Direct loans have a 6-month grace period after you graduate or drop below half time enrollment before your loan repayment period begins.   You can only use your grace period once!   Federal PLUS loans, however, do not offer a grace period.  

Q:  Can I start paying before my grace period ends or while I’m still in school?

A:  Payments can be made at any time to Direct Lending.   You can also make payments on the interest building on unsubsidized Direct or PLUS loans.  



There are several different repayment options offered to you.   Each of these options offers a different amount required for your monthly payment.   You may find one of these repayment options will suit your needs better than the other.   The Direct Loan Program allows you to change repayment options at any time.   Get some understanding and try the Calculators & Interest Rates .

Q:  How can I defer my loan payments?

A:   You may be able to defer your payments if you are enrolled at least half time at an eligible school, studying full time at a graduate fellowship program or an approved disability rehabilitation program, unemployed or experiencing economic hardship, serving on active duty in the military during a war/national emergency, are a member of the National Guard or other reserve component of the USA military and are called to active duty within 6 months after having been enrolled.

Q:   What if I can’t make my next loan payment and am not eligible for a deferment?

A:  Contact Direct Lending about requesting forbearance.   Forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments.    You can avoid defaulting on your loan with a little help and information on Deferment and Forbearance.  Get Help!  


Delinquency and Default

If you're having trouble making payments on your loans, contact the Direct Loan Servicing Center as soon as possible. The Direct Loan Servicing Center staff will work with you to determine the best option for you. Late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus), but this is much better than remaining delinquent on your payments and going into default.  Visit our default information page for more information about what to do and who to contact.

Q:  What is delinquency?  

A:  You are delinquent if your loan payment is not received by the due date.   Delinquency can result in late fees and can be reported to one or more of the national credit agencies, causing a negative effect on your credit score.

Q: What is default?

A:   Default occurs when you become 270 days delinquent in making payments on your loans.   Going into default will result in you losing eligibility in the future for Federal Financial Aid, having to pay collection fees and possibly court costs, and an impact on your credit report at all national credit agencies.


Loan Consolidation

Consolidating your loans into one loan can benefit you by giving you one monthly payment and extending your repayment period, resulting in lower monthly payments.   You can even combine your old Stafford loans that you had through lenders with your new existing loans through the Direct Loan Program! Got questions such as:   Should I consolidate?   How do I benefit?   Am I eligible?   Find out more about loan consolidation.



Please do not hesitate to ask questions! 

Check your loan aggregates at

You can contact the Direct Loan Servicing Center at: 1-800-557-7394  or visit their website at

Stay in touch with ETSU and the Direct Loan Servicing Center.  Let us know if you've changed your name or permanent address, and make sure that the Direct Loan Servicing Center knows when you've completed your educational program or transferred to another school. 

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