Repaying Your Student Loan


Military Mobilization Guidance for TG Borrowers

Many of TG's customers are servicemen and women of the U.S. Armed Forces. If you (or your family member) are one of those customers and if, as a result of the ongoing military mobilization, you are activated or reassigned, you may have to interrupt your education, student loan repayment, or both. Should this happen, you might wonder what impact these circumstances may have on your academic progress and student loans.

If you are activated or reassigned for a period of more than 30 days, you may be eligible for some relief, either as a result of the interruption of your education or from your student loan repayment obligation. If this occurs, we encourage you to contact your loan holder, TG, or school. See the guidance below that pertains to your individual situation.

Withdrawal from school

If your circumstances cause you to withdraw from school, your school may be able to provide you with a partial or full refund of tuition, fees, or other institutional expenses. Or your school may also decide to provide you with an institutional credit if you choose to re-enroll after you have completed your military service. If you do decide to resume your education later, your school may also be able to extend flexible re-enrollment options to you. Contact your school for more information on its policies.

TG also recommends that you contact your loan holder if you have to withdraw because of the ongoing military mobilization. Your loan holder should retain your loans — while you are performing your military service — in the same status they were in before you withdrew. Call your loan holder for more information.

Grace period interruption

A student with a Stafford loan who has completed school or has dropped below half-time enrollment has a six-month grace period before he or she is required to make the first payment on his or her student loan. A student with a Perkins loan is eligible for either an initial nine-month grace period or six-month post-deferment grace period. If you are in your grace period and are called to active duty or reassigned, you are eligible for an extension of your grace period for the time you are performing your service and for a period of time necessary for you to resume your education, if you choose to do so. Contact your loan holder for details on this benefit.

Loan repayment interruption

If you are in repayment on a loan under the Federal Family Education Loan Program (FFELP), the William D. Ford Federal Direct Loan Program (FDLP), or the Federal Perkins Loan Program, you are allowed to temporarily cease making payments for up to one year while serving in active duty or reassigned due to the military mobilization. This cessation of payments is called a forbearance. Contact your loan holder for more information.

Some borrowers may qualify for a deferment. During a deferment, you are not required to make payments on your loan, and, if you have a subsidized Stafford loan or Perkins loan, the federal government pays the interest on your loan while you are in a deferment. For more information on various types of deferment and to see if you may qualify, refer to

Interest rate reduction

Under the Servicemembers' Civil Relief Act (SCRA), an eligible borrower is entitled to an interest rate reduction to 6.0% on any FFELP or FDLP loan during the borrower's period of military service. The SCRA covers all active duty service members, reservists, and members of the National Guard while on active duty service as of August 14, 2008.

In addition, an eligible borrower who has a FFELP loan(s) may obtain a Federal Direct Consolidation loan for the purpose of obtaining the no accrual of interest benefit available for active duty service members serving during a war, military operation, or national emergency. This benefit is available for Direct Loans first disbursed on or after October 1, 2008 for a period not to exceed 60 months. To learn more about this benefit and loan consolidation under the FDLP, a borrower should contact the Department of Education.

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