The document provides an overview of student loan basics, including types of federal loans with their respective interest rates and repayment plans. It details the calculation of simple daily interest, different loan repayment options, and eligibility criteria for various plans. Additionally, it emphasizes that private loans are not eligible for federal loan consolidation.

1. • Student Loan Basics
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2. 2
2
Loan Basics
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3. Student Loan Basics
Types of Loans and Loan Servicers
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4. Interest – Simple Daily Interest
• The “simple” in “simple daily interest” means that
interest does not compound unless there is a
specific reason for it to do so
• The “daily” in “simply daily interest” means that
interest accrues every day
• Let’s walk through the calculation to determine
how much interest accrues in one day on a $10,000
loan with an interest rate of 4.66%
(Interest Rate ÷ Days in Year) × Outstanding Principal Balance
(0.0466 ÷ 365) × $10,000 = $1.27

5. 5
Interest Rate for Federal Loans
Interest Rate
(First Disbursed
between July 1, 2015
and June 30, 2016) Repayment Additional Info
Federal Perkins Loan
5% Fixed
9 months after school
Federal Stafford/
Direct Loan
Undergraduate
Subsidized
4.29% Fixed
Unsubsidized
4.29%Fixed
6 months after school
Subsidized: no interest
charged while in
school Unsubsidized:
interest accrues while
in school
Federal Stafford/
Direct Loan
Graduate/Professional
Unsubsidized 5.84%
Fixed 6 months after school
Unsubsidized interest
accrues while in
school
Federal Direct PLUS
Loan (Parents,
Graduate &
Professional)
6.84% Fixed Direct
Lending Schools
May be deferred until
6 months student
drop ½ time or 60
days after loan is fully
disbursed
Interest accrues while
student is in school

6. Repayment Plans – FFEL and DL
• Traditional plans:
• 10-Year Standard
• Extended
• Graduated
• Extended Graduated
• Consolidation Standard
• Consolidation Graduated
• Income-driven plans:
• Income-Based
• Income-Contingent
• Pay As You Earn

7. Standard Repayment Plan
Under this plan, the borrower will pay a fixed amount that
ensures they pay their loan(s) in full within the repayment
period. Payments will be at least $50 per month.
For subsidized, unsubsidized, and PLUS loans, the
repayment period is 10 years. For consolidation loans, the
repayment period is 10-30 years, depending on the
borrower’s total educational indebtedness.
For borrowers who do not have consolidation loans, this
plan results in the lowest total interest paid because the
repayment period is shorter than it would be under any of
the other repayment plans.

8. Graduated Repayment Plan
Under this plan, the borrower will pay an amount that increases
every two years and ensures that they pay their loan(s) in full
within the repayment period.
For subsidized, unsubsidized, and PLUS loans, the repayment
period is 10 years. For consolidation loans, the repayment
period is 10-30 years, depending on the borrower’s total
educational indebtedness.
The minimum payment equals the amount of interest that
accrues monthly. No one payment will be more than three times
greater than any other payment.

9. Eligible Loan Type
Loan Type ICR IBR PAYE REPAYE
Loan received as student X X X X
Loan received as parent
Consolidation (no underlying
parent loans)
X X X X
Consolidation (underlying parent
loans)
X

10. • One lender and one monthly payment
• Flexible repayment options
• Reduced monthly payments
• Fixed interest rate
• Subsidized, unsubsidized, PLUS loans for graduate or
professional students, Perkins Loans, and certain health
profession loans made by the U.S. Department of Health and
Human Services are eligible for consolidation
Note: Private loans are ineligible for federal loan consolidation but
can be used to establish the repayment period on consolidation
loans.

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