Loans

Student loans are ways of financing your graduate and professional education and often have the option to defer payment until after you have completed your program. Federal Direct Loans are the primary source of financing for graduate students seeking a degree.

Federal loans are awarded based on the information provided on the Free Application for Federal Student Aid (FAFSA). Students who choose to participate in federal loan programs are required to have their loan records submitted to the National Student Loan Data System (NSLDS), and those records will be accessible by guarantee agencies, lenders and colleges determined to be authorized users of that data system.

Federal Loan Repayment Options

There are a variety of repayment plan options to help you manage your federal student loan debt, including options that base monthly payment on your income or those that give you a fixed monthly payment over a set repayment period.

Federal Loan Simulator

Use the Student Aid Loan Simulator to estimate different repayment plans and monthly payment amounts. Login using your FSA ID to use your specific federal student loan data, or proceed without logging in to estimate/project future loan debt.

Visit studentaid.gov to find your total outstanding federal student loan balance.

Loan Forgiveness Programs

There are various student loan forgiveness programs available for individuals who work in public service, education and health care.

Important Terminology

  • Deferment
  • Forbearance
  • Default
  • Loan Deferment

    Deferment is a right under your promissory note and it permits you to postpone payments for certain defined periods. For example, if you return to school on an at least half-time basis, you qualify for a deferment for most Federal Education Loans. The most common deferment options (for new borrowers after 7/1/1993) include:

    Unlimited Deferment

    • Full-time enrollment
    • At least half time enrollment
    • Graduate fellowship
    • Rehabilitation training

    Three Years of Total Deferment

    • Military deferment
    • Unemployed but actively seeking work
    • Economic hardship greater than or equal to 20% of monthly income)

    If you qualify for a deferment, the Federal Government will pay the accruing interest on the subsidized portion of any Federal Direct Loan you have borrowed. Interest on any unsubsidized portion of the Federal Direct Loan will accrue at a lower interest rate.

    Loan Forbearance

    If you don't meet the conditions for a deferment, but are having a difficult time making your payments due to temporary hardship, you may request a period of forbearance.

    A forbearance is an agreement between you and your loan provider that your next scheduled due date for the loan will be some time in the future, say three or six months or may include an agreed upon lower monthly payment amount. Your loan stays in good standing during a period of forbearance. Interest continues to accrue on loans in forbearance at the applicable repayment period rate.

    Loan Default

    If you default it means you failed to make payments on your loans according to the terms of your promissory note, the legal document you signed with your lender. Here are some consequences of default:

    • National credit bureaus will be notified of your default, which will harm your credit rating
    • You would be ineligible for additional federal student aid
    • Your wages can be garnished
    • State and Federal income tax refunds will be withheld and applied to your defaulted loans
    • You will have to pay late fees and collection costs on top of what you already owe

    The most recent official cohort rates are:

    • National: 2.3%
    • Minnesota: 5.6%
    • University of St. Thomas: 0.1%

    Questions about the St. Thomas default rate can be directed to Mary Sokol, Assistant Director of Student Loans, mary.sokol@stthomas.edu, (651) 962-6556.

    Deferment

    Loan Deferment

    Deferment is a right under your promissory note and it permits you to postpone payments for certain defined periods. For example, if you return to school on an at least half-time basis, you qualify for a deferment for most Federal Education Loans. The most common deferment options (for new borrowers after 7/1/1993) include:

    Unlimited Deferment

    • Full-time enrollment
    • At least half time enrollment
    • Graduate fellowship
    • Rehabilitation training

    Three Years of Total Deferment

    • Military deferment
    • Unemployed but actively seeking work
    • Economic hardship greater than or equal to 20% of monthly income)

    If you qualify for a deferment, the Federal Government will pay the accruing interest on the subsidized portion of any Federal Direct Loan you have borrowed. Interest on any unsubsidized portion of the Federal Direct Loan will accrue at a lower interest rate.

    Forbearance

    Loan Forbearance

    If you don't meet the conditions for a deferment, but are having a difficult time making your payments due to temporary hardship, you may request a period of forbearance.

    A forbearance is an agreement between you and your loan provider that your next scheduled due date for the loan will be some time in the future, say three or six months or may include an agreed upon lower monthly payment amount. Your loan stays in good standing during a period of forbearance. Interest continues to accrue on loans in forbearance at the applicable repayment period rate.

    Default

    Loan Default

    If you default it means you failed to make payments on your loans according to the terms of your promissory note, the legal document you signed with your lender. Here are some consequences of default:

    • National credit bureaus will be notified of your default, which will harm your credit rating
    • You would be ineligible for additional federal student aid
    • Your wages can be garnished
    • State and Federal income tax refunds will be withheld and applied to your defaulted loans
    • You will have to pay late fees and collection costs on top of what you already owe

    The most recent official cohort rates are:

    • National: 2.3%
    • Minnesota: 5.6%
    • University of St. Thomas: 0.1%

    Questions about the St. Thomas default rate can be directed to Mary Sokol, Assistant Director of Student Loans, mary.sokol@stthomas.edu, (651) 962-6556.