Graduating students, before you embark on your post-college journey, ensure you're equipped with essential financial knowledge by completing Federal Direct Loan Exit Counseling, and explore options like loan consolidation, Public Service Loan Forgiveness (PSLF), and Income-Driven Repayment (IDR) plans to navigate your student loan obligations wisely.

Students who have borrowed from the Federal Direct Loan program while attending UMB are required to complete Federal Direct Loan Exit Counseling. If you expect to graduate at the end of the spring term, it is strongly encouraged to complete this requirement no later than May 1st. Borrowers who do not complete this requirement will have a hold on mailing of their diploma until confirmation of completion from the Department of Education is received. 

Loan Consolidation | Loan Repayment Options | Public Service Loan Forgiveness 

Understanding how to manage student loan repayment, which includes options like consolidating federal loans, choosing income-driven repayment plans, and considering programs such as Public Service Loan Forgiveness, requires borrowers to learn about eligibility criteria, talk to loan servicers, and use available resources to make smart decisions about paying off their debt.

Loan Consolidation

Federal student loan consolidation simplifies repayment by combining eligible federal student loans into a single new loan, the Federal Direct Consolidation Loan. This consolidation process involves obtaining a new loan to pay off existing federal student loans, with the new loan featuring a fixed interest rate and a repayment term of up to 30 years, depending on the total debt amount.

Loans eligible for consolidation (not exhaustive):

• Federal Stafford Loans from the Federal Family Education Loan (FFEL) Program
• Federal Direct Subsidized and Unsubsidized Loans
• Federal Perkins Loans
• Federal Direct PLUS Loans
• Nursing Student Loans
• Health Professions Student Loans

**It is important to note that private or alternative loans are not eligible for consolidation.

Consolidation offers several benefits, including a fixed interest rate for the entire repayment term, streamlined repayment with one monthly bill. and potentially lower monthly payments through extended repayment terms.

However, there are considerations to keep in mind. For instance, opting for a longer repayment term may result in paying more interest over the loan's lifespan, and consolidating immediately after graduation might forfeit a portion of the grace period since repayment begins immediately after approval of the newly consolidated loan.

While in-school consolidation is no longer an option, borrowers can consolidate once they are enrolled for fewer than six credits or are no longer in school.

It's crucial for borrowers to communicate with their loan servicers for any changes in address or inquiries regarding repayment. Additionally, individuals should be aware that the decision to consolidate rests solely between them and their lender. Students can find more information about federal student loan consolidation and the process through Federal Student Aid.

Loan Repayment Options

Graduating students who have borrowed from the Federal Direct Loan program will automatically have their loans placed into a 10-year Standard Repayment Plan at the conclusion of their grace period. Students are encouraged to explore and compare repayment options using the Federal Student Aid Loan Repayment Simulator and select the one that works best for their personal financial situation. Examples of alternative repayment plans include: 

• Graduated Repayment: Payments start lower and increase every two years, with loans paid of in 10 years (10-30 years for consolidated loans). 
• Extended Repayment: Payments are fixed or increase over time to ensure that loans are paid within 25 years. Borrowers must have at least $30,000 or more in Direct Loan debt to qualify for this repayment plan. 
• Income-Driven Repayment (IDR): These plans, such as Saving on a Valuable Education (SAVE) and Pay As You Earn (PAYE), base your monthly repayment amount on how much you earn and family size. After making a certain number of months of qualifying payments on an IDR plan, borrowers can get the remaining balance of their loan(s) forgiven. Borrowers must provide updated income and family size information to their loan servicer each year. 

Borrowers who are having challenges making monthly payments may qualify for a deferment or forbearance, which is a temporary pause in repayment based on specific circumstances and set criteria. 

Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on Direct Loans after the borrower has made:

• 120 qualifying monthly payments
• under a qualifying repayment plan
• while working full-time for a qualifying employer

For detailed information and to determine your eligibility, students are encourage to utilize the PSLF Help Tool through Federal Student Aid.  

Borrowers who are employed by UMB must submit their Employer Certification Form to UMB Human Resources. More information about this process can be found through HR Service Center and Records.