Repaying Your Student Loans

In order to begin repayment you first have to know what loans you have borrowed and to whom you will be making payments to.

There are four resources available to help you feel confident you are aware of and know your total student loan history:

  1. Your HLS Borrowing History Sheet (need Harvard email login). This will show you all the loans that were certified by SFS during your time at HLS
  2. StudentAid.gov (need your Federal FSA username and password) – This site will show all of your FEDERAL loans from any institution through which you borrowed federal funds (i.e. Direct Federal loans (subsidized and unsubsidized) and GradPLUS loans) .
  3. Your credit reports which can be accessed by going to www.annualcreditreport.com  All three reports can be requested once per 12 months. All student loans are report to a credit agency – not every lender uses the same agency.  Obtaining your credit reports and comparing them to your HLS borrowing summary sheet as well as the federal loan site, while not required, is a good exercise to verify that you have information on all of your loans and are not missing any lender.
  4. Your promissory notes.

Once  you have a firm grasp of your borrowing history, knowing the logistical details involved in repaying your loans, will be the key to successfully transitioning from borrowing to repayment.

In general, you will begin repayment six or nine months after you separate from the University on 5/13/2022. If you had loans prior to law school and used all of your grace period, those loans will enter repayment 30 -60 days after your separation date. Students who are unable to meet this repayment obligation, will need to contact their lender(s) directly to apply for deferment or forbearance.

Some Logistics

  • Repayment Plans

    here are numerous repayment options for your Direct Stafford and GradPLUS loans. Perkins and Harvard Law School loan have a 10 year repayment term and most private loan lenders offer one or two repayment plans.

  • Monthly Statements

    Most lenders will send you one electronic monthly billing statement for all the loans you have borrowed through them.

    Additionally, you may be able to talk to your lender, before you begin repayment, about your monthly due date. If the lender says that your loan is due on the 20th of each month and you don’t get paid until the 25th, you can call the lender and ask about changing the date. Sometimes they will make an adjustment if the request is within reason.

  • Length of Repayment

    Remember that your federal loans come with many different repayment options, all with various repayment lengths. You can choose to go in and out of these options with some limitations and it may take a month or two for the change to go into effect.

    Private loans have a specific repayment term. You may contact the lender to ask about the possibility of formally shortening the repayment term to 10 years from the 15 or 20 year terms that are typically standard if you wish. However, change in the length of repayment for a private loan is at the discretion of the lender.

    Students interested in LIPP should be aware that LIPP only provides assistance on the ACTUAL required payment and, although not required, recommends that participants place all of their loans on 10 year repayment terms if possible. Estimated payments will not be considered for LIPP purposes.

  • Electronic Debiting

    Electronic Debiting is a payment service that allows your lender or servicer to electronically deduct your monthly loan amount from your checking or savings account. Many lenders offer interest rate reduction of 0.25% to students who have their payments withdrawn electrically. This is an easy way to make on-time payments and to avoid defaulting on your loans. You’ll also save time and money! Some lenders also require you to receive electronic bills in order to receive this benefit. You’ll receive information from your lender regarding electronic debiting prior to entering repayment. If not, just look on their web site for details on how and when to sign up.

    Keep in mind that some lenders do not allow you to sign up for electronic debiting until you enter repayment. So don’t forget to make that first payment on time in order to keep all of your “on-time” benefits. Some students lose out on their repayment benefits because they miss their first payment. Don’t let that be you! Know when your first payment is due on each loan and be sure to have the payment in before or by the due date.

    It’s a good idea to create a separate checking or savings account just for the repayment of your loans. You may not want your lenders to have access to your main checking account for security reasons or simply for easy in accounting. Once you set up a separate account, calculate how much money you will need to transfer into the account each month (watch for quarterly interest rate changes with your variable rate loans). Be sure to monitor your account once a month when paying bills.

  • Prepaying your loans

    There are no prepayment penalties on any of the student loans you have borrowed while in law school. You can prepay a loan at any point in time and must repay only the principal and interest that has already accrued on the loan. It is always advantageous to make any prepayments on your highest interest-rate loan first, to the extent of fully repaying a higher interest-rate loan, before making a prepayment on any lower interest rate loan.

    If you want to make a prepayment on a loan, you should first contact your lender to get specific instructions. When you call, ask about the best way to make a prepayment, and find out the correct address or web site to which you should send the payment. Keep in mind that you first have to pay the interest that has accrued to date; any remaining amount of your payment will then be applied to your principal balance due.

    For example, if 15 days of interest has accrued on the loan for a total amount of $100, your prepayment will first go to pay off the accrued interest of $100, and the remaining amount of your prepayment will reduce your principal balance. After making a prepayment, you should always confirm that your prepayment has been applied to your account appropriately as a lump sum to reduce the outstanding interest and principal, rather than being applied to your loan account as a series of future monthly payments.

    A loan is capitalized when all interest that has accrued to date is added to the principal loan amount. Capitalization rules can vary by loan program, but generally student loan interest accrues until just before repayment begins. Before capitalization, interest accrues on the original principal loan amount. After capitalization, future interest will accrue on the new loan amount (the original principal amount plus capitalized interest). If you pay the accrued interest just before the date capitalization occurs, your principal amount will not have the accrued interest added to it, and you will avoid paying additional interest on the accrued interest.

    It is important to know that if your prepayment does not pay the loan off in full, your next regularly scheduled monthly payment will still be due. In other words, while the prepayment does not reduce your monthly payment amount, it will reduce the number of times you will be required to make that monthly payment, and thereby reduces the amount of interest you will pay over the life of the loan. Sometimes if the prepayment is large, a lender may re-amortize your loan and give you a different monthly payment amount.

  • Tips for successful repayment
    • Make sure you have all your loan records organized.
    • Know the amount of your student loan payments.
    • Include student loan payments in your budget.
    • Know when your loan payments begin.
    • Contact your loan holder immediately if you are having trouble making your monthly payments.
    • Make sure you keep your contact information updated with all of your lenders. Initially, when you attend an Exit Interview and complete the required forms, your contact information will be updated with your lenders. After this initial relay of information, any updates are your responsibility.