Student Loan Management

Student Loan Frequently Asked Questions (FAQs)

How do I manage student loan debt?

Student loans, unlike grants and work-study, are borrowed money from the federal government that must be repaid, with interest, just like car loans and home mortgages. You cannot have these loans canceled because you did not like the education you received, didn’t get a job in your field of study or because you’re having financial difficulty. Loans are legal obligations that you have to repay.

Exit Counseling Requirement

A Direct Loan student borrower who is graduating, leaving school, or dropping below half-time enrollment is required to complete Exit Counseling.

  • Visit StudentAid.gov and log in using your FSA ID
  • Click on Complete Loan Counseling and then select Exit Counseling
  • When selecting a school to notify, you will choose Midwest Technical Institute in Springfield, IL (this is the main campus for MTI/DTC)
  • Complete the online Exit Counseling session all the way up until you see a confirmation page (please allow 20-30 minutes to complete)
  • Keep this confirmation page for your records
  • The Financial Aid office at your MTI campus will be automatically notified you have met this requirement

Student Loan Repayment Options

  • Graduated Repayment Plan: Your monthly payments will be lower when you begin repayment and will increase, usually every two years. You will repay your loan in full within 12 to 30 years, depending on the total amount of your Direct Loans. At a minimum, your payments must cover the interest that accumulates on your loan between payments.
  • Income-Based Repayment Plan (IBR): Under IBR, the required monthly payment is capped at an amount that is intended to be affordable based on your income and family size. You are eligible for IBR if the monthly repayment amount under IBR will be less than the monthly amount calculated under a 10-year standard repayment plan. If you repay under the IBR plan for 25 years and meet other requirements, you may have any remaining balance of your loan(s) cancelled. Additionally, if you work in public service and have reduced loan payments through IBR, the remaining balance after 10-years in a public service job could be cancelled. You may contact your loan holder or loan servicer, or visit StudentAid.gov for more detailed information about the Income-Based Repayment Plan.
  • Pay-As-You-Earn Repayment Plan: Your monthly payment amount will be based on your income and family size and adjusted each year based on changes to your annual income and family size. Payments are usually lower than on other repayment plans. Payments are never more than the standard 10-year repayment plan and made over a period of 20 years.

Consolidating Student Loans

If you have multiple federal student loans, you can consolidate them into a single Direct Consolidation Loan. This might simplify repayment if you are currently making separate loan payments to different loan holders or servicers, since you’ll only have one monthly payment to make. Additionally, a Direct Consolidation Loan could be eligible for more beneficial repayment plans than your current loans are eligible for.

Options to Postpone Your Payments

A student loan deferment or forbearance allows you to temporarily postpone your monthly payments under certain circumstances, such as:

  • Enrollment in school
  • Economic or temporary financial hardship
  • Unemployment
  • Military deployment
  • Natural disaster

Deferment: a postponement of payment on a loan, during which interest does not accrue if the loan is subsidized. You may qualify for a deferment while you are:

Enrolled at least half time in an eligible post secondary school or studying full time in a graduate fellowship program or an approved disability rehabilitation program.

Unemployed or meet our rules for economic hardship (limited to 3 years).You may also be eligible for a deferment based on qualifying active duty service in the U.S. Armed Forces or National Guard.

Forbearance: allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Some common reasons for getting forbearance are illness, financial hardship or serving in a medical or dental internship or residency.

Keep in mind:

  • A deferment or forbearance is only a temporary suspension of your monthly payments.
  • In most cases, the interest on your student loans continues to accrue during this time.

Need help now? DTC provides Student Loan Resources

Delta Technical College has a Loan Management Department. These staff members are Loan Default Specialists who will work with you to determine if you may be eligible for deferment or forbearance on student loans.

There is no charge to you for this service, so please contact them if you are having trouble making your payments. There are options and help is always available.

Email: LoanHelp

  • More information on federal student aid, including FAFSA, is available here.
  • More information about private student loans is available here.

 

Student Loan Repayment Plans

This plan bases your monthly payment amount on how much is owed, interest rate, and a fixed repayment time period.

When you leave school, you will be automatically enrolled in the Standard Repayment Plan unless you pick a different repayment plan. 

Standard Repayment Plan:

Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Graduated Repayment Plan:

Payments are lower at first and then increase, usually every two years. Payment amounts are designed to ensure your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Extended Repayment Plan: 

Payments can be fixed or graduated and will ensure that your loans are paid off within 25 years.

*To qualify for this plan, you must have more than $30,000 in outstanding Direct Loans (if you’re a Direct Loan borrower) or more than $30,000 in outstanding FFEL Program loans (if you’re a FFEL borrower).

Income-Driven Repayment (IDR) plans base your monthly payment amount on how much money you make and your family size.

After satisfying a certain number of months of qualifying payments on an IDR plan, you can get the remaining balance of your loan(s) forgiven. You must provide your loan servicer with updated income and family size information each year so that your servicer can recalculate your payment amount. 

SAVE Plan: Payments are 10% of discretionary income.

PAYE Plan: Payments are 10% of discretionary income, but never more than what you would pay under the 10-year Standard Repayment Plan.

*To be eligible, you must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.

IBR Plan: Payments are either 10% or 15% of your discretionary income (depending on when you received your first loans) but never more than what you would pay under the 10-year Standard Repayment Plan.

ICR Plan: Payments are the lesser of  20% of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.