Loan Repayment
Federal Direct Loans
After the student graduates, leaves school, or drops below half-time enrollment, there is a six-month grace period before repayment begins. The borrower selects the option that is right for his/her financial circumstances. They may select from 4 repayment plans:
- Standard - fixed monthly payment (at least $50) for up to 10 years.
- Extended - fixed monthly payment (at least $50) for 12-30 years.
- Graduated - allows payments to increase every 2 years, for 12-30 years.
- Income Contingent - monthly payments based on yearly income, family size and loan amount.
Direct Parent Plus Loan
Direct Parent Plus Loan borrowers must begin repaying their loans shortly after the loan has been fully disbursed. The Parent Plus Loan borrowers may choose only the Standard, Extended, or Graduated Repayment Plan.
Consequences of Default
- Damage to credit rating
- Loss of deferment/forbearance options
- Federal government may take legal action
- Federal Government can withhold federal tax refunds
- Garnishment of wages
- Unpaid balance and accrued interest could be due in full immediately
- Account may be placed with a collection agency, increasing the total debt by late fees, additional interest, court costs, collection fees, attorneys’ fees and other costs
PLEASE do not let this happen. Borrowers who have trouble making payments should call the Direct Loan Servicing Center at 1-800-848-0979. The Direct Loan Servicing Center will look at all options to keep the account out of default.
Perkins, Nursing, and Health Professions Loans
Once the grace period ends (nine months for Perkins and Nursing, twelve months for Health Professions), borrowers will start receiving bills for repayment of student loans. The bills will come from the University’s billing service, Campus Partners. Depending on the amount borrowed, minimum monthly payments will be calculated to ensure the loan is repaid within a ten-year maximum repayment period. There is not a penalty when paying the loan off early. Please remember that the University of Kentucky is the lender of the loan and will remain so for the entire repayment period. If assistance is ever needed, please call the Student Loan Office at (859) 257-3406 ext 258 or Campus Partners at 1-800-334-8609.
Consequences of Default
It is very important that borrowers remain current and in good standing on their Perkins, Health Profession, and Nursing Loans. Failure to do so will result in a stop on official transcripts and future registration at the University of Kentucky. Late fees will also be assessed any time the account becomes as little as 30 days past due. Failure to keep the account current will result in negative credit reporting which is sent to all 3 national credit bureaus. Once negative credit reporting has been sent, it remains part of the borrower’s record for 7 years and cannot be removed. Accounts that become 240 days past due are subject to acceleration of the balance and placement with outside collection agencies, which will add considerable collection fees to what is already owed. When outside collection agencies are unsuccessful, the accounts are turned over to the Federal Government for collection. Even bankruptcy cannot prevent borrowers from being held liable for repayment of this loan.
To remain in good standing, KEEP ADDRESSES UP TO DATE. Borrowers will be assured of always receiving bills on time. If a bill is received that cannot be paid, please contact the Student Loan Office for help (859) 257-3406 ext 258.
Institutional Loans
Once the grace period ends, bills will be sent for repayment of the Institutional Loan. These bills are generated by Campus Partners, the University’s billing service. Please remember that the University of Kentucky is the holder of the loan and will remain the holder for the entire repayment period. If assistance is ever needed with the account, please call the Student Loan Office (859) 257-3406 ext 258 or Campus Partners 1-800-334-8609.