Parent Tips

Help Your Student Manage and Successfully Repay Their Student Loan

We know student loans are often one of the first significant financial obligations your student may have. As their federal student loan servicer, we’re here to help them along the way with any questions they have, to help them explore their benefits and repayment options, and to process payments. We understand you’re there to help them, too, so here are a few ways to help ensure your student successfully manages and repays their student loans.

While In School

To make managing their student loans easier, your student can authorize you to have access to their account information. They can download and complete the Third-Party Authorization Form after creating an account.

Once your student is no longer enrolled at least half time, their school will require them to complete student loan exit counseling, which is often completed online. Exit counseling helps students learn about their borrower rights and responsibilities, different repayment plans to fit their budget, student loan benefits and other options to assist them if they are unable to make payments. Encourage your student to pay careful attention during exit counseling so they have basic knowledge about their loans.

For your student to maintain their eligibility and the interest subsidy for Direct Subsidized Loans, they must not exceed 150% of the published length of their current program. For example, if they are in a four-year full-time program and receive Direct Subsidized Loans for six years, they would lose eligibility beginning their seventh year. Learn more.

Your student can monitor the status of all of their loans (ones serviced by MOHELA and other student loan providers) by logging into the U.S. Department of Education’s Office of Federal Student Aid.

Successful Repayment

We offer any services required to manage their loan for free. Your student should never have to pay a third party to provide student loan services. Managing student loan debt can be overwhelming, particularly for borrowers just starting out on their own and making monthly payments. Many ‘debt-relief’ companies offer help to consolidate, postpone, lower or even forgive student loan payments for a price. What they won’t tell your student is that these same services are available to them already, free of charge, directly by the U.S. Department of Education and MOHELA. Learn more.

Your student can save time and money by enrolling in monthly Auto Debit. They can enroll online to receive a 0.25% interest rate reduction when payments are electronically debited from a bank account each month. This will also help make sure they pay on-time each month so their credit isn’t impacted.

When your student enters repayment, any unpaid accrued interest will capitalize (be added to the principal balance of the loans). Capitalization increases their principal balance, so they will pay more in interest over the life of the loan. This means their monthly payment amount will be higher when they enter repayment or their repayment period will be longer and they will make more payments. Payments can be made at any time by anyone on behalf of the student.

The following example shows monthly payments and the total repayment amount when they pay the interest while in school compared to when they do not pay the interest and it is capitalized. This example uses an interest rate of 8.25%. The actual amount of interest that capitalizes depends on factors such as your student’s loan amount, interest rate and length of time while in school.


While In School Loan Amount Capitalized Interest for 12 Months Principal to Repay Monthly Payment Number of Payments Total Amount to Repay
When interest is paid $15,000 $ 0 $15,000 $184 120 $23,3151
When interest is not paid $15,000 $1,238 $16,238 $199 120 $23,900

1This includes $1,238 of interest paid while in school.

Result: If you pay the interest while in school, you will save $15 per month and $585 over the life of the loan.

Unlike many other types of loans, federal student loans come with a variety of repayment options. From repayment plans with monthly payments as low as $0 to loan forgiveness program, and many more, we can help your student with a customized solution that fits your student’s needs. All they need to do is contact us for assistance. More information is available in the Info Center.