Commonly Asked Questions
Loan Repayment

In an effort to assist you, we have provided below the most frequently asked questions about student loans.

Q: How do I apply for a student loan?
A: Contact your college’s financial aid administrator to start the loan application process. More information can be found by clicking here

Q. I don't know where my student loan is or who my lender or servicer is. Where can I get this information?
A. It is now possible to track your student loans using the National Student Loan Data System (NSLDS). This is the U.S. Department of Education's central database for student aid records. For each loan, the NSLDS website provides the following information:

• The date you took out the loan


• How much you borrowed originally


• The interest rate


• How much you owe now


• How much interest has accumulated


• The status of each loan (such as whether the loan is in repayment, paid in full, or in default)

Q.  I understand that I am responsible for the interest while I am in school and during periods of deferment. What if I cannot make the interest payments? Can I have the interest added to the principal balance of my loan? Will it cost significantly more to have the interest capitalized or should I try to pay the interest each month?
A. Adding interest accruals to the principal balance of a loan is called capitalization and always results in higher interest costs! You will be in a better financial situation when you graduate or leave school if you can manage to pay the interest accruals on your unsubsidized loan while you are in school.

Q. Do I have to make payments on my student loans while I'm in school?
A. Federal Stafford loans do not enter repayment until six months after you withdraw, drop below half-time enrollment status or graduate.

Q. When will my first payment on my student loan be due?
A. Federal Stafford student loans have a six-month grace period, and Federal Perkins loans have a nine-month grace period. Your grace period begins the day after you graduate, withdraw, or drop below half-time enrollment status. Your first monthly payment should be due approximately 30 days after your grace period expires.

Q. Will I use my grace period if I am out of school for two summer terms?
A. The purpose behind the grace period is to give you time, once you complete your education, to find a job and get settled before you begin repaying your student loan. To use your grace period you must be out of school six consecutive months. In other words, not being enrolled for two summer terms would not constitute the use of your grace period but a summer term followed by the fall term would. Once your grace period is used, you will not be eligible for an additional grace period on your loan.

Q. What if I go back to school?
A. If you enroll at least half time before your grace period expires you are considered not to have used the grace period and your loan status returns to its former in-school status. If you are out of school six consecutive months or more and your loan has entered repayment, going back to school will not reverse your repayment status. However, you may qualify for an in-school deferment.

Q. What will my payment be on my student loan?
A. Your Federal Stafford Loan must be repaid within ten years, and the minimum monthly payment required on your Federal Stafford Loan is $50.00. Your actual payment amount will be based on the total amount you borrowed, your interest rate and the repayment term, and will also be affected by the type of repayment plan you choose.

Q. How will I know when to start repaying my student loan?
A. You are responsible for beginning repayment on time. If you don't hear from your lender, you should contact them. It is possible that your lender may not have a correct or current address for you. Your Federal Stafford student loan will enter repayment six months after you graduate, withdraw or drop below half-time enrollment status. Your lender should send you a disclosure statement listing your:

• Monthly Payment Amount


• Payment Due Dates


• Length of Repayment Term


• Current Interest Rate

Q. What happens if I have difficulty making a scheduled payment?
A. Contact your lender immediately. It is easier to keep a loan in good standing if you contact your lender before a payment is due. The worst thing you can do is ignore calls or correspondence from your lender. If you have difficulty making a scheduled payment, your lender will be able to assist you with options that can keep your student loan in good standing and prevent a bad credit report.

Q. Can I pay off my loan early?
A. You can prepay all or part of your loan at any time, without penalty. The advantage for you is that any extra payment to principal will reduce the interest costs and pay off your loan quicker.

Q. Can my student loan be canceled?
A. Federal Stafford Student Loans are insured against death, permanent disability, closed school, false certification and unauthorized payment. These are circumstances under which a Federal Stafford Loan may be canceled. Contact your lender for more information on loan cancellation.

Q. If I fail to pay my student loan on time will my credit be affected?
A. Failure to make your monthly payments on time may result in negative credit history being sent to the Nationwide National Consumer Reporting Agencies. Negative reporting to these agencies may affect your overall credit score, and your ability to obtain consumer loans in the future for purchases such as a car or home. You can order your free annual credit report online at www.annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. When you order, you need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.

Q. Who do I contact if I have any more questions?
A. New Mexico Student Loans will continue to service the loans in our portfolio. You can reach us by e-mail, or phone at 345-3371 Ext.1472 in Albuquerque or 1-800-279-5063 outside the Albuquerque area.