Student Loan Information Network

In our 2010 “Blueprint for Early Education Compensation Reform,” the Bessie Tartt Wilson Initiative for Children recommended that loan forgiveness for early educators be researched and expanded in Massachusetts. During our research, it became clear that barriers to accessing existing loan forgiveness programs and understanding student loan management are extremely common. Some of the barriers, such as a lack of understanding of how loans and loan forgiveness work, can be addressed easily while others, such as loan defaults, require further assistance. To address some of these barriers, BTWIC will be sharing information with early educators throughout the state on student loans and financial aid support. We hope this information will be helpful for those looking to further their education and gain control of their student loan debt. Information has been taken from various sources including Crittenton Women’s Union and the Student Loan Borrower Assistance websites. Scroll to the bottom of the page to see links to these sites and additional resources.

This webpage is meant to provide basic information on accessing and managing student loans. Every situation is different and BTWIC urges those with additional questions to discuss their individual circumstances with a financial advisor.

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Different Types of Financial Aid:

Grants are provided based on financial need and do not need to be paid back (unless the student leaves school early).

Scholarships are typically awarded based on merit (high grades) and like grants, do not need to be paid back. Scholarships are available through the government (when a prospective student submits his or her FASFA) and are also available through private organizations, companies, and your college/university. Certain scholarships are awarded for non-academic reasons, including ethnicity and field of study. It is worth the time to apply for scholarships that you are eligible for, since you do not need to repay them.

Student Loans provide funding for school that must be repaid with interest, whether or not you successfully complete your coursework. Student loans typically come from the federal government or a private loan lender. Additional information on student loans is below.


Types of Student Loans:

Federal Student Loans

A federal student loan, also called the Direct Loan Program, allows students and/or their parents to borrow money to help pay for college through loan programs supported by the federal government. They usually have low interest rates and offer attractive repayment terms, benefits and options. Generally, repayment of a federal loan does not begin until after the student leaves school. Federal student loans can be used to pay school expenses such as tuition and fees, room and board, books, supplies and transportation.

Private Student Loans

A private student loan is a non-federal loan issued by a lender such as a bank or credit union. Private student loans often have variable interest rates, require a credit check, and do not provide the benefits of federal student loans.

If you take out a private loan, you will not be eligible for the same types of discharge, deferment and forbearance options that are available for federal loans.

Frequently Asked Questions – Applying for Student Loans

Who is eligible to take out federal student loans?

Anyone who is enrolled in a degree, certificate, or other approved program at an eligible school and is a U.S. citizen or eligible non-citizen. In addition, borrowers must have a high school diploma, pass a test approved by the Department of Education or otherwise meet “ability to benefit” criteria. There is also a rule that students convicted under federal or state laws of sale or possession of illegal drugs cannot get federal student aid in certain cases.

Do I need good credit to borrow a student loan?

Except for PLUS loans, the government will not look at your credit in deciding whether you are eligible for a loan. Private loans are a different story—the interest rate you get often depends on your credit score.

Repayment Options for Existing Student Loans

The first step is to know whether your student loans are in good standing, delinquent, or in default. If your student loan is in good standing, there are a variety of options for repayment. Contact your servicer to discuss the options available.

Note: the information below applies to federal loans only.

Standard Repayment

Unless you request a specific repayment plan, you will be assigned a standard repayment plan. You have a minimum of five years, but not more than ten years to repay with a standard plan.

Click here to use the Department of Education’s calculators to estimate repayment amounts under the different repayment plans. also has calculators to estimate repayment.

Graduated Repayment

Under a graduated repayment plan, payments start out low and increase during the course of the repayment period. The payments usually increase every two years. However, if your loan balance is high enough, you can make graduated payments as part of an extended repayment plan. Graduated plans tend to work best for borrowers who are likely to have relatively quick increases in earnings over time.

Extended Repayment

Extended repayment plans are available if you have total outstanding principal and interest exceeding $30,000. In these cases, you may repay on a fixed or graduated payment schedule for a period not to exceed 25 years.

Extended plan monthly payments will be less than under the standard repayment plan. However, you will also pay more interest over the life of the loan because the repayment period is longer.

Income Based Repayment (IBR) Program

Department of Education’s IBR Calculator

If your loan payments are high relative to your income and taking into account the size of your family, IBR may reduce your monthly payments and forgive any remaining balance after 25 years of payments. Under IBR, if you earn less than 150% of the poverty level for your family size, you will pay nothing. If you earn more than 150% of the poverty level, you will pay 15% of the amount you earn above 150% of the poverty level.

After the initial calculation, your payment may be adjusted each year based on changes in income and family size. Your payment will never be more than the standard 10 year payment amount unless you choose to leave the IBR program. Under IBR, you have to report your income every year even if it does not change.

Frequently Asked Questions – Student Loan Repayment

How can I switch my repayment plan?

You can change plans to suit your financial circumstances by contacting your servicer. For Federal Direct Loans, call 1-800-848-0979 to discuss your specific loan(s).

Note: the information below applies to federal loans only.

How can I reduce the interest I pay on my loan?

If you would like to prepay some of the principal on your loan, you must request in writing that the extra amount you send be applied to principal. Send the payment and request together, via certified mail, get a receipt, and keep copies for yourself.

What are deferment and forbearance and can I use them to avoid paying my loans?

Deferment and forbearance are postponement methods for student loans. They are temporary and while in forbearance, interest accrues on the total amount of your student loan. Deferment is only available for loans in good standing, while loans that are in default may still be eligible for forbearance. Private loan holders may offer forbearance , although some may charge for the service. If the loan is federal, you should find out if you are eligible for Income Based Repayment (IBR) first. Additional information can be found on your loan provider’s website or by calling them.

My loans are in default. How can I get out of default?

Two ways to get back to loan repayment when your loans have defaulted are rehabilitation and loan consolidation.

Rehabilitation and Consolidation

Note: the information below applies to federal loans only.

Rehabilitation is a program you can request to bring your student loan back to “good standing” when you have defaulted on it. By contacting your loan holder, requesting a rehabilitation program (with an agreed-upon monthly payment amount) and paying on-time for nine consecutive months, your loan can be “rehabilitated.”

Consolidation occurs when multiple student loans are combined into one new loan, often with a lower interest rate. After consolidation, you are eligible for new loans, grants, and deferments. Furthermore, your credit report will no longer show your loan as in default.

WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan. This is because you will lose your rights under the federal loan programs once you choose to consolidate with a private lender. These include deferment, forbearance, cancellation, and affordable repayment rights. Also, federal consolidation loans generally have lower interest rates.

– Taken from


Frequently Asked Questions – Rehabilitation and Consolidation

What is a better option for me, rehabilitation or consolidation?

Unfortunately, there is no “one size fits all” answer for this. Your best option is to speak with a student loan professional to explain your situation and get the best advice to managing your issue.


Additional Resources for Financing Your Education and Student Loan Assistance

Advice for Early Education Providers Seeking Higher Education






Education Opportunity Center for Massachusetts (EOC) provides education access services primarily to low-income adults interested in returning to school.

Massachusetts Education Financing Authority (MEFA) provides answers to college planning, saving, and financing questions at no charge. MEFA contains online applications for federal and private loan programs.

FinAid provides free financial aid information, advice, and tools.

Massachusetts Office of Student Financial Assistance provides information on MA state financial aid programs.

Student Loan Borrower Assistance provides extensive information about handling both federal and private student loan debt.

Federal Student Aid Ombudsman provides instructions to resolve federal loan debt yourself and assists borrowers unable to reach a resolution on their own.

Federal Student Aid provides information on the repayment collection of federal loans and addressing defaulted student loans.

Your Federal Student Loans is a guide by Federal Student Aid that provides basic information about federal student loans, the repayment process, and managing your debt.

American Student Assistance provides general information about student loans and debt management.

FastWeb is a free scholarship matching service.

The Scholarship Page is a search engine for scholarships and allows you to browse a scholarship database according to major, heritage, and state.