Loan Repayment and Forgiveness
Repaying Your Federal Loans
Repayment on your loans will begin after you graduate, drop below half-time status, withdraw, or plan not to return to the GC next semester.
Most loans will give you a period of time — known as a grace period — after your last day of at least half-time enrollment before you have to start making payments on your loans. Interest will not accrue on subsidized loans during the grace period, but will accrue on all unsubsidized loans.
If you had previously used your grace period on a loan prior to your current degree or during a leave of absence, you may enter repayment on that loan as soon as you leave school (graduate, withdraw or drop below half-time).
The initial grace period for the Federal Direct Unsubsidized Loan begins after you are no longer enrolled in an eligible status, drop below half time enrollment (less than six credits), graduate, take a leave of absence, or withdraw from school. The grace period for Federal Direct Unsubsidized Loans is six months. Once the grace period is exhausted, you will not receive another one.
Please note: if you have previously borrowed a federal student loan and already used your six months’ grace period, your previous loans will go into repayment immediately. If that situation applies to you, we suggest contacting that loan servicer(s) immediately to discuss repayment options.
In most cases, the Direct Loan Servicer will automatically grant an in-school deferment on a Federal Direct Unsubsidized Loan based on information reported by your school to the U.S. Department of Education showing that you are enrolled at least half time.
Important Note for September Graduates: For federal aid purposes, your last day of half-time enrollment is the last day of the preceding spring term. This means that you will begin your grace period the day after the spring semester ends.
There is no grace period for Federal Direct PLUS Loans. However, in most cases, the Direct Loan Servicing Center will automatically grant an in-school deferment on your Federal Direct PLUS Loan based on information reported by your school to the U.S. Department of Education showing that you are enrolled at least half time. The Direct Loan Servicing Center will notify you of the deferment and of your option to cancel the deferment and begin making payments on your loan. The loan will remain in deferment for an additional six months after you cease to be enrolled at least half time.
Interest will accumulate during the deferment. If the interest is not paid during deferment, it may be capitalized (added to the principal balance).
Important Note for September Graduates: For federal aid purposes, your last day of half-time enrollment is the last day of the preceding spring term. This means that you will begin your deferment the day after the spring semester ends.
Federal Direct Loans and Federal Direct Grad PLUS Loans have both standard (level), graduated, or income-driven repayment options.
The Graduate Center provides resources (including presentations and individual counseling session) to prepare students for repayment. This is available to all students and alumni. Do not hesitate to make an appointment if you would like assistance.
For Federal Direct Loans, approximately one month before you are scheduled to enter repayment, your servicer will send information on the different repayment plans available and an estimate as to what each repayment plan will cost.
For information on the different repayment plans available to Direct Loan borrowers, please visit Federal Student Aid. This site also has a calculator that will allow you to estimate your payments before entering repayment.
ECSI, the University's billing servicer, will contact you regarding payments for the Perkins Loan.
A deferment is a period of time where you can suspend payments as long as you meet certain eligibility criteria.
Subsidized loans will not accrue interest during any period of deferment. Interest will accumulate on unsubsidized loans.
While you are not required to pay the interest during a deferment, any unpaid interest will be capitalized (added to the principal) once the deferment ends.
A forbearance is a temporary adjustment of payments during times of hardship. During a forbearance, interest will accumulate on all loans. If the interest is not paid during forbearance, it may be capitalized (added to the principal balance)
Deferment is not automatic. Apply for deferment by using a deferment form obtained from your servicer’s website. Supporting documentation may be required.
You must repay your loans even if you don’t complete your education, can’t find a job related to your program of study, or are unhappy with the education you paid for with your loans.
There are rare circumstances, however, when a student’s loans may be forgiven, canceled, or discharged. For more information, visit Federal Student Aid.
If your federal student loan payments are high compared to your income, you may want to repay your loans under an income-driven repayment plan.
See below the “Public Service Loan Forgiveness” section below for more information.
After 270 days of non-payment, your loan will enter default status. The consequences of default can be severe:
- The loan will be assigned to a collection agency.
- The loan will be reported as delinquent to the credit bureaus, damaging your credit. It will take years to reestablish credit after a default.
- May result in wage garnishment and/or tax offsets.
- Please see Federal Student Aid for additional details.
The initial grace period begins after you are no longer enrolled at an eligible status, meaning when you drop below half time enrollment (six credits or six equated credits), graduate, take a leave of absence, or withdraw from school. The initial grace period lasts nine months.
No interest accrues nor are payments due during a grace period. You must begin repaying the Perkins loan when the grace period ends.
Once you enter repayment, CUNY’s loan servicer, ECSI, will send you a monthly billing statement.
Deferment is not automatic. Apply for a deferment by using a deferment form obtained from the University’s billing servicer, ECSI. You will need your ESCI PIN to access the site. Supporting documentation is usually required. Once the approved deferment period ends, you are entitled to an additional six-month post deferment grace period.
Apply for a forbearance by using a forbearance form obtained from the University’s loan servicer, ECSI. You will need your ESCI PIN to access the site.
Forbearance is usually granted for six months at a time. The total period of forbearance is limited to three years.
Forbearance and extensions on forbearance are not automatic. For an additional forbearance, you must submit a new request.
As one of the benefits of the Federal Perkins Loan, you may be eligible to have up to 100 percent of your loan canceled by engaging in certain types of public service and community-based work. A Perkins loan may also be canceled in the event of total and permanent disability or death. For more information about what qualifies for loan cancellation, visit Federal Student Aid.
Cancellations are not automatic. If you are eligible for a cancellation, it is your responsibility to complete the appropriate forms and submit them to the loan servicer on a timely basis. Contact the University’s loan servicer, ECSI, or download forms from their website. Additional documentation is usually required.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is a federal program for students pursuing full time jobs in the public sector (i.e. governmental or nonprofits). After 120 payments (10 years), the full balance of the loan is forgiven, with no tax consequence for the borrower.
Yes. You can begin the 120 payments at any time as long as you are in a repayment status in which you are required to make payments.
Review the requirements on the federal government’s website, which contains comprehensive information about the program.
Students and alumni should feel free to contact our office to set up an appointment to discuss how to take advantage of the program.
No. You can move around jobs as long as they fall under the public service definition.