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Federal Direct Consolidation Loan Application and Promissory Note

William D. Ford Federal Direct Loan Program

OMB No. 1845-0053

Form Approved

Exp. Date xx/xx/xxxx

WARNING: Any person who knowingly makes a false statement or misrepresentation on this form or any accompanying documentation is subject to penalties that 

may include fines, imprisonment, or both, under the U.S. Criminal Code and 20 U.S.C. 1097. [30-DAY CLEARANCE DRAFT 02/26/2014]

BEFORE YOU BEGIN

Read the Instructions for Completing the Federal Direct Consolidation Loan Application and Promissory Note (“Instructions”). 

NOTE: PAGES 1 THROUGH 5 MUST BE SUBMITTED FOR YOUR LOAN REQUEST TO BE PROCESSED.

BORROWER INFORMATION

1. Last Name: ______________________________________________ First Name: ___________________________________________ Middle Initial: __________

2. Former Name(s): ______________________________________________________________________________________________________________________

3. Social Security Number: ___ ___ ___ - ___ ___ - ___ ___ ___ ___ 

4. Date of Birth: ___ ___ - ___ ___ - ___ ___ ___ ___

5. Permanent Address (Street, City, State, Zip Code) (if P.O. box or general delivery, see instructions):

_______________________________________________________________________________________________________________________________________

6. Area Code/Telephone Number: ( ______ ) ______ - ________

7. E-Mail Address (Optional): __________________________________________________________________________

8. Driver’s License State and Number: ___________________________________________________________________

9. Employer’s Name and Address (Street, City, State, Zip Code): 

______________________________________________________________________________________________________________________________________

10. Work Area Code/Telephone Number: ( ______ ) ______ - ________

REFERENCE INFORMATION

List 2 persons with different U.S. addresses who do not live with you and who have known you for at least 3 years.

11. Last Name: _________________________________________________ First Name: _______________________________________ Middle Initial: _________

Permanent Address (Street, City, State, Zip Code):

______________________________________________________________________________________________________________________________________

E-Mail Address (optional): ____________________________________________________________________________

Area Code/Telephone Number: ( ______ ) ______ - ________

Relationship to You: _________________________________________________________________________________

12. Last Name: _______________________________ ___________________First Name: _______________________________________ Middle Initial: _________

Permanent Address (Street, City, State, Zip Code):

______________________________________________________________________________________________________________________________________

E-Mail Address (optional): ____________________________________________________________________________

Area Code/Telephone Number: ( ______ ) ______ - ________

Relationship to You: _________________________________________________________________________________
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Borrower’s Name: ________________________________________________________________ Social Security Number: ___ ___ ___ - ___ ___ - ___ ___ ___ ___

LOANS YOU WANT TO CONSOLIDATE

Read the Instructions before completing this section. List each federal education loan that you want to consolidate, including any Direct Loan Program loans that you 

want to include in your Direct Consolidation Loan. If you need more space to list loans, use the Additional Loan Listing Sheet included with this Note. List each loan 

separately.

We will send you a notice before we consolidate your loans. This notice will (1) provide you with information about the loans and payoff amounts that we have 

verified, and (2) tell you the deadline by which you must notify us if you want to cancel the Direct Consolidation Loan, or if you do not want to consolidate one or 

more of the loans listed in the notice. The notice will include information about loans that you listed in this section. If you have additional loans with a holder of a loan 

that you listed in this section, the notice may also include information about those additional loans. See the Instructions for more information about the notice we 

will send. 

IN THIS SECTION, LIST ONLY LOANS THAT YOU WANT TO CONSOLIDATE

13. Loan Code

(see Instructions)

14. Loan Holder/Servicer Name, Address, and 

Area Code/Telephone Number (see Instructions)

15. Loan Account 

Number

16. Estimated Payoff 

Amount

17. Grace Period End Date. If any of the loans you want to consolidate are in a grace period, you can have the processing of your Direct Consolidation Loan delayed 

until the end of your grace period by entering your expected grace period end date in the space provided. 

If you leave this item blank, we will begin processing your Direct Consolidation Loan as soon as we receive this Note and any other required documents. Any loans 

listed in the Loans You Want to Consolidate section that are in a grace period will enter repayment immediately upon consolidation. You will then lose the remaining 

portion of the grace period on those loans.

Expected Grace Period End Date (month/year): ___ ___ - ___ ___ ___ ___
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Borrower’s Name: ________________________________________________________________ Social Security Number: ___ ___ ___ - ___ ___ - ___ ___ ___ ___

LOANS YOU DO NOT WANT TO CONSOLIDATE

Read the Instructions before completing this section. List all education loans that you are not consolidating, but want us to consider when we calculate the maximum 

repayment period for your Direct Consolidation Loan (see Item 11 of the Borrower’s Rights and Responsibilities Statement that accompanies this Note). Remember 

to include any Direct Loan Program loans that you do not want to consolidate. If you need more space to list loans, use the Additional Loan Listing Sheet included 

with this Note. List each loan separately. 

We will send you a notice before we consolidate your loans. This notice will (1) provide you with information about the loans and payoff amounts that we have 

verified, and (2) tell you the deadline by which you must notify us if you want to cancel the Direct Consolidation Loan, or if you do not want to consolidate one or 

more of the loans listed in the notice. The notice may also include information about any loans you listed in this section, but these loans listed will not be 

consolidated. See the Instructions for more information about the notice we will send.

IN THIS SECTION, LIST ONLY LOANS THAT YOU DO NOT WANT TO CONSOLIDATE

18. Loan Code

(see Instructions)

19. Loan Holder/Servicer Name, Address, and 

Area Code/Telephone Number (see Instructions)

20. Loan Account 

Number

21. Current Balance

REPAYMENT PLAN SELECTION

To understand your repayment plan options, carefully read the repayment plan information in Item 11 of the Borrower’s Rights and Responsibilities Statement that 

accompanies this Note and in any supplemental materials you receive with this Note. Then select a repayment plan for your Direct Consolidation Loan:

 To select the Standard Repayment Plan, the Graduated Repayment Plan, or the Extended Repayment Plan, complete the Repayment Plan Selection form 

that accompanies this Note. 

 To select the Income-Based Repayment Plan (IBR Plan), the Pay As You Earn Repayment Plan (Pay As You Earn Plan), or the Income-Contingent Repayment 

Plan (ICR Plan), visit StudentLoans.gov to complete the application online or complete the IBR/Pay As You Earn/ICR Repayment Plan Request form that 

accompanies this Note. 

NOTE: You must select the IBR Plan, the Pay As You Earn Plan, or the ICR Plan for repayment of your Direct Consolidation Loan if:

1. You want to consolidate a defaulted loan and you have not made a satisfactory repayment arrangement with your current loan holder(s); or 

2. You are consolidating a delinquent Federal Consolidation Loan that the lender has submitted to the guaranty agency for default aversion, or you are 

consolidating a defaulted Federal Consolidation Loan, and you are not consolidating any additional eligible loans.

BORROWER UNDERSTANDINGS, CERTIFICATIONS, AND AUTHORIZATIONS

22. I understand that:

A. Applying for a Direct Consolidation Loan does not obligate me to agree to 

take the loan. The U.S. Department of Education (ED) will provide me with:

 The deadline by which I must notify ED if I want to cancel the Direct 

Consolidation Loan, or if I do not want to consolidate any of the loans 

that ED has verified; and 

 A notice containing information about the loans and payoff amounts 

that ED has verified with the holders of my loans or through ED’s 

National Student Loan Data System (NSLDS) before the actual payoffs 

occur. 

The notice that ED sends will include information about the loans I listed in 

the Loans You Want to Consolidate section of this Note . If I have additional 

loans that are with a holder of a loan listed in the Loans You Want to 

Consolidate section, but I did not list those loans in that section, the notice 

may also include information about those additional loans. I must inform 

ED by the deadline specified in the notice if I do not want all of the loans 

listed in the notice to be consolidated.

The notice that ED sends may also include information about loans I listed in 

the Loans You Do Not Want to Consolidate section of this Note, but these 

loans will not be consolidated.
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Borrower’s Name: ________________________________________________________________ Social Security Number: ___ ___ ___ - ___ ___ - ___ ___ ___ ___

BORROWER UNDERSTANDINGS, CERTIFICATIONS, AND AUTHORIZATIONS (CONTINUED)

B. If ED accepts this application for a Direct Consolidation Loan, I

understand that ED will send funds to the holders of the loans that I want to 

consolidate to pay off those loans. The amount of my Direct Consolidation 

Loan will be the sum of the balances of my outstanding eligible loans that I 

have chosen to consolidate. The payoff amount may be greater than or less 

than the estimated total balance I have indicated in the Loans You Want to 

Consolidate section.

The outstanding balance on each loan to be consolidated includes unpaid 

principal, unpaid accrued interest and late charges as defined by federal 

regulations and as certified by the loan holder. Collection costs may also be 

included. For a Direct Loan Program or Federal Family Education Loan (FFEL) 

Program loan that is in default, the amount of any collection costs that may 

be included in the payoff balances of the loans is limited to a maximum of 

18.5% of the outstanding principal and interest. For any other defaulted 

federal education loans, all collection costs that are owed may be included 

in the payoff balances of the loans.

C. If the amount ED sends to my loan holders is more than the amount 

needed to pay off the balances of the selected loans, the holders will refund 

the excess amount to ED and this amount will be applied against the 

outstanding balance of my Direct Consolidation Loan. If the amount that ED 

sends to my holders is less than the amount needed to pay off the balances 

of the loans selected for consolidation, ED will include the remaining 

amount in my Direct Consolidation Loan.

D. If I am consolidating loans made under the FFEL, Direct Loan, or Federal 

Perkins Loan (Perkins Loan) programs, the outstanding balance of my Direct 

Consolidation Loan counts against the applicable aggregate loan limits for 

each type of loan. Under the Act (“the Act” is defined under “Governing 

Law” in the Note Terms and Conditions section of this Note), the 

percentage of the original amount of my Direct Consolidation Loan that is 

attributable to each loan type is counted against the loan limit for that type 

of loan.

E. I must agree to repay my Direct Consolidation Loan under the IBR Plan, 

the Pay As You Earn Plan, or the ICR Plan if:

 I am consolidating a defaulted loan and I have not made a satisfactory 

repayment arrangement with the current holder of the defaulted loan, 

or 

 I am consolidating a delinquent Federal Consolidation Loan (a 

consolidation loan made under the FFEL Program) that the lender has 

submitted to the guaranty agency for default aversion or a defaulted

Federal Consolidation loan, and I am not including another eligible 

loan in the consolidation. 

F. I may not consolidate an existing Direct Consolidation Loan unless I 

include at least one additional eligible loan in the consolidation. I may 

consolidate an existing Federal Consolidation Loan without including an 

additional eligible loan in the consolidation if I am:

 Consolidating a delinquent Federal Consolidation Loan that the lender 

has submitted to the guaranty agency for default aversion and I agree 

to repay my new Direct Consolidation Loan under the IBR Plan, the Pay 

As You Earn Plan, or the ICR Plan; 

 Consolidating a defaulted Federal Consolidation Loan and I agree to 

repay my new Direct Consolidation Loan under the IBR Plan, the Pay 

As You Earn Plan, or the ICR Plan; 

 Consolidating a Federal Consolidation Loan to use the Public Service 

Loan Forgiveness Program; or 

 Consolidating a Federal Consolidation Loan to use the no accrual of 

interest benefit for active duty service members.

G. If I consolidate my loans, I may no longer be eligible for certain 

deferments, subsidized deferment periods, certain types of loan discharges 

or loan forgiveness, reduced interest rates, or repayment incentive 

programs that were available on the loans I am consolidating.

H. If I am consolidating a Perkins Loan: 

 I will no longer be eligible for interest-free periods while I am enrolled 

in school at least half time, in the grace period on my loan, and during 

deferment periods; and 

 I will no longer be eligible for full or partial loan cancellation under the 

Perkins Loan Program based on years of service in one of the following 

occupations: teacher in a low-income elementary or secondary school; 

staff member in an eligible preschool program; special education 

teacher; member of the Armed Forces who qualifies for special pay; 

Peace Corps volunteer or volunteer under the Domestic Volunteer 

Service Act of 1973; law enforcement or corrections officer; attorney 

in an eligible defender organization; teacher of mathematics, science, 

foreign languages, bilingual education or any other high-need field; 

nurse or medical technician providing health care services; employee 

of a public or private nonprofit child or family service agency that 

services high-risk children from low-income families and their families; 

fire fighter; faculty member at a Tribal College or University; librarian; 

or speech language pathologist.

I. Any payments I made on the loans I am consolidating before the date of 

consolidation will not count toward:

 The number of years of qualifying repayment required for loan 

forgiveness under the IBR Plan, the Pay As You Earn Plan, or the ICR 

Plan (see Item 11 of the Borrower’s Rights and Responsibilities 

Statement), or 

 The 120 qualifying payments required for Public Service Loan 

Forgiveness (see Item 18 of the Borrower’s Rights and 

Responsibilities Statement).

J. If I am consolidating a Direct PLUS Loan or a Federal PLUS Loan that I 

obtained to help pay for my child’s undergraduate education, I will not be 

eligible to repay my Direct Consolidation Loan under the IBR Plan or the Pay 

As You Earn Plan. However, I may repay my Direct Consolidation Loan under 

the ICR Plan.

K. If I am consolidating a Direct Loan Program loan first disbursed before 

July 1, 2012 on which I received an up-front interest rebate, and I have not 

yet made the first 12 required on-time payments on that loan at the time 

the loan is consolidated, I will lose the rebate. This means that the rebate 

amount will be added back to the principal balance of the loan before it is

consolidated.

L. ED will give me the opportunity to pay the interest that accrues on the 

unsubsidized portion of my Direct Consolidation Loan during deferment 

periods (including in-school deferment periods) and on the entire portion of 

my Direct Consolidation Loan during forbearance periods. If I do not pay the 

interest that accrues during these periods, ED may add the unpaid interest 

that accrues to the principal balance of my loan (this is called 

“capitalization”) at the end of the deferment or forbearance period. 

Capitalization will increase the principal balance on my loan and the total

amount of interest I must pay.
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Borrower’s Name: ________________________________________________________________ Social Security Number: ___ ___ ___ - ___ ___ - ___ ___ ___ ___

BORROWER UNDERSTANDINGS, CERTIFICATIONS, AND AUTHORIZATIONS 

(CONTINUED)

M. ED has the authority to verify information reported on this Note with 

other federal agencies. 

23. Under penalty of perjury, I certify that:

A. The information that I have provided on this Note is true, complete, and 

correct to the best of my knowledge and belief and is made in good faith.

B. All of the loans I have selected for consolidation have been used to 

finance my education or the education of one or more of my children.

C. All of the loans I have selected for consolidation are in a grace period or 

in repayment (“in repayment” includes loans in deferment or forbearance).

D. If I owe an overpayment on a Federal Perkins Loan, Federal Pell Grant, 

Federal Supplemental Educational Opportunity Grant, Academic 

Competitiveness Grant (ACG), National Science and Mathematics Access to 

Retain Talent (SMART) Grant, or Leveraging Educational Assistance 

Partnership Grant, I have made satisfactory arrangements to repay the 

amount owed.

E. If I am in default on any loan I am consolidating, I have either made a 

satisfactory repayment arrangement with the holder of that defaulted loan, 

or I will repay my Direct Consolidation Loan under the IBR Plan, the Pay As 

You Earn Plan, or the ICR Plan, except that I must repay my Direct 

Consolidation Loan under the IBR Plan, the Pay As You Earn Plan, or the ICR 

Plan under the conditions described above in Item 22.E.

F. If I have been convicted of, or if I have pled nolo contendere (no contest) 

or guilty to, a crime involving fraud in obtaining funds under Title IV of the 

Higher Education Act of 1965, as amended (HEA), I have fully repaid the 

funds to ED or to the loan holder in the case of a Title IV federal student 

loan.

24. I make the following authorizations:

A. I authorize ED to contact the holders of the loans I have selected for 

consolidation to determine the eligibility for consolidation and the payoff 

amounts of:

 The loans listed in the Loans You Want to Consolidate section of this 

Note, and 

 Any of my other federal education loans that are held by a holder of a 

loan listed in the Loans You Want to Consolidate section. 

I further authorize the release of any information required to consolidate

my education loans, in accordance with the Act, to ED or its agents and 

contractors.

B. I authorize ED to issue the proceeds of my Direct Consolidation Loan to 

the holders of the selected loans to pay off those loans.

C. I authorize ED to investigate my credit record and report information 

about my loan status to persons and organizations permitted by law to 

receive that information.

D. I authorize my schools, ED, and their agents and contractors to release 

information about my Direct Consolidation Loan to the references on the 

loan and to my immediate family members, unless I submit written 

directions otherwise.

E. I authorize my schools, ED, and their agents and contractors to share 

information about my loan with each other.

F. I authorize my schools, ED, and their agents and contractors to contact 

me regarding my loan request or my loan, including repayment of my loan, 

at the number that I provide on this Note or any future number that I 

provide for my cellular telephone or other wireless device using automated 

dialing equipment or artificial or prerecorded voice or text messages.

PROMISE TO PAY

25. I promise to pay ED all sums disbursed under the terms of this Note to 

pay off my prior loan obligations, plus interest and other charges and fees 

that may become due as provided in this Note. 

26. If I do not make a payment on my Direct Consolidation Loan when it is 

due, I will also pay reasonable collection costs, including but not limited to 

attorney fees, court costs, and other fees.

27. My signature on this Note serves as my authorization to pay off the 

balances of the loans I have selected for consolidation as provided by the 

holders of the loans.

28. I will not sign this Note before reading the entire Note, even if I am told 

not to read it, or told that I am not required to read it. I am entitled to an 

exact copy of this Note and the Borrower’s Rights and Responsibilities 

Statement. 

29. My signature certifies that I have read, understand, and agree to the 

terms and conditions of this Note, including the Borrower Understandings, 

Certifications, and Authorizations section, and the Borrower’s Rights and 

Responsibilities Statement.

I UNDERSTAND THAT THIS IS A LOAN THAT I MUST REPAY.

30. Borrower’s Signature:

______________________________________________________________

Today’s Date (mm-dd-yyyy) ___ ___ - ___ ___ - ___ ___ ___ ___
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NOTE TERMS AND CONDITIONS

GOVERNING LAW

The terms of this Federal Direct Consolidation Loan Application and 

Promissory Note (Note) will be interpreted in accordance with the Higher 

Education Act of 1965, as amended (20 U.S.C. 1070 et seq.), the U.S. 

Department of Education’s (ED’s) regulations, any amendments to the HEA 

and the regulations in accordance with the effective date of those 

amendments, and other applicable federal laws and regulations (collectively 

referred to as the “Act”). 

Under applicable state law, except as preempted by federal law, you may 

have certain borrower rights, remedies, and defenses in addition to those 

stated in this Note and in the Borrower’s Rights and Responsibilities 

Statement.

DISCLOSURE OF LOAN TERMS

This Note applies to a Federal Direct Consolidation Loan (Direct 

Consolidation Loan). Under this Note, the principal amount that you owe 

and are required to repay will be equal to all sums disbursed to pay off your 

prior loan obligations, plus any unpaid interest that is capitalized and added 

to the principal balance. 

Although you will have a single Direct Consolidation Loan, your loan may 

have up to two separate loan identification numbers depending on the 

loans you consolidate. These loan identification numbers will represent 

prior subsidized loans and prior unsubsidized loans. Each applicable loan 

identification number is represented by this Note.

When the loans you are consolidating are paid off, a disclosure statement 

will be provided to you. The disclosure will identify the amount of your 

Direct Consolidation Loan, the loan identification number(s), and additional 

terms of the loan, such as the interest rate and repayment schedule. If you 

have questions about the information disclosed, you may contact your 

servicer. The Borrower’s Rights and Responsibilities Statement

accompanying this Note also contains important additional information. The 

Borrower’s Rights and Responsibilities Statement and any disclosure you 

receive in connection with the loan made under this Note are hereby 

incorporated into this Note.

ED may use a servicer to handle billing and other communications related to 

your loan.

INTEREST

Unless ED notifies you in writing that a different rate will apply, the interest 

rate on your Direct Consolidation Loan is a fixed rate that is calculated in 

accordance with a formula specified in the Act. The interest rate for a Direct 

Consolidation Loan is based on the weighted average of the interest rates 

on the loans being consolidated, rounded to the nearest higher one-eighth 

of one percent. There is no cap on the interest rate that is determined 

under this formula. This is a fixed interest rate, which means that the rate 

will remain the same throughout the life of the loan. 

Except as provided under the Act, you must pay the interest that accrues on 

your Direct Consolidation Loan during all periods, from the date of 

disbursement until the loan is paid in full or discharged. You are not 

required to pay the interest that accrues during deferment periods on the 

portion of your Direct Consolidation Loan that repaid subsidized loans, 

except as explained under the heading “Responsibility for Paying All Interest 

on All or Part of the Subsidized Portion of a Direct Consolidation Loan (for 

First-Time Borrowers on or after July 1, 2013).” 

You will be given the opportunity to pay the interest that accrues during 

deferment, forbearance, or other periods as provided under the Act. If you 

do not pay this interest, ED may capitalize the interest (add it to the 

principal balance of your loan) at the end of the deferment, forbearance, or 

other period.

RESPONSIBILITY FOR PAYING ALL INTEREST ON ALL OR PART OF THE 

SUBSIDIZED PORTION OF A DIRECT CONSOLIDATION LOAN (FOR FIRSTTIME BORROWERS ON OR AFTER JULY 1, 2013)

If you were a first-time borrower on or after July 1, 2013 when you 

received a Direct Subsidized Loan and you are now consolidating that loan, 

you may be responsible for paying the interest that accrues during all 

periods on the portion of your Direct Consolidation Loan that repaid the 

Direct Subsidized Loan. See Item 9 of the Borrower’s Rights and 

Responsibilities Statement that accompanies this Note for more 

information.

LATE CHARGES AND COLLECTION COSTS

ED may collect from you: 

 A late charge of not more than six cents for each dollar of each late 

payment if you fail to make any part of a required installment 

payment within 30 days after it becomes due, and 

 Any other charges and fees that are permitted by the Act related to 

the collection of your Direct Consolidation Loan. 

If you default on your loan, you must pay reasonable collection costs, plus 

court costs and attorney fees.

REPAYMENT

You must repay the full amount of the Direct Consolidation Loan made 

under this Note, plus accrued interest. You will repay your loan in monthly 

installments during a repayment period that begins on the date of the first 

disbursement of the loan, unless the loan is in a deferment or forbearance 

period. Generally, payments that you make or that someone else makes on 

your behalf will be applied first to late charges and collection costs that are 

due, then to interest that has not been paid, and finally to the principal 

amount of the loan. However, any payments made under the Income-Based 

Repayment Plan or the Pay As You Earn Repayment Plan will be applied first 

to interest that is due, then to fees that are due, and then to the principal 

amount.

ED will provide you with a choice of repayment plans. The Borrower’s 

Rights and Responsibilities Statement includes information on these 

repayment plans. You must select a repayment plan. If you do not select a 

repayment plan, ED will choose a plan for you in accordance with the Act.

ED will provide you with a repayment schedule that identifies your payment 

amounts and due dates. Your first payment will be due within 60 days of the 

first disbursement of your Direct Consolidation Loan unless the loan is in a 

deferment or forbearance period. If you intend to repay your loan but are 

unable to make your scheduled loan payments, ED may grant you a 

forbearance that allows you to temporarily stop making payments, or to 

temporarily make a smaller payment amount, which extends the time for 

making payments.

ED may adjust payment dates on your Direct Consolidation Loan or may 

grant you a forbearance to eliminate a delinquency that remains even 

though you are making scheduled installment payments.
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NOTE TERMS AND CONDITIONS (CONTINUED)

You may prepay all or any part of the unpaid balance on your loan at any 

time without penalty. After you have repaid your Direct Consolidation Loan 

in full, ED will send you a notice telling you that you have paid off your loan.

ACCELERATION AND DEFAULT

At ED’s option, the entire unpaid balance of your Direct Consolidation Loan 

will become immediately due and payable (this is called “acceleration”) if 

either of the following events occurs: 

1. You make a false representation that results in your receiving a loan 

for which you are not eligible; or 

2. You default on the loan.

The following events will constitute a default on your loan: 

1. You do not pay the entire unpaid balance of the loan after ED has 

exercised its option under item 1 above; 

2. You do not make installment payments when due and your failure to 

make payments has continued for at least 270 days; or 

3. You do not comply with other terms of the loan, and ED reasonably 

concludes that you no longer intend to honor your repayment 

obligation. 

If you default, ED may capitalize all outstanding interest. This will increase 

the principal balance of your loan, and the full amount of the loan, including 

the new principal balance and collection costs, will become immediately 

due and payable.

If you default, the default will be reported to nationwide consumer

reporting agencies (credit bureaus) and will significantly and adversely 

affect your credit history. A default will have additional adverse 

consequences as explained in the Borrower’s Rights and Responsibilities 

Statement. Following default, you may be required to repay the loan 

(potentially including amounts in excess of the principal and interest) under 

the Income-Based Repayment Plan or the Income-Contingent Repayment 

Plan in accordance with the Act.

LEGAL NOTICES

Any notice required to be given to you will be effective if sent by first class 

mail to the most recent address that ED has for you, by electronic means to 

an address you have provided, or by any other method of notification that is 

permitted or required by applicable statute or regulation.

You must immediately notify ED of a change in your contact information or

status as specified in the Borrower’s Rights and Responsibilities Statement

under “Information you must report to us.” 

If ED does not enforce or insist on compliance with any term of this Note, 

this does not waive any right of ED. No provision of this Note may be 

modified or waived except in writing by ED. If any provision of this Note is 

determined to be unenforceable, the remaining provisions will remain in 

force.

Information about your loan will be submitted to the National Student Loan 

Data System (NSLDS). Information in NSLDS is accessible to schools, lenders, 

and guarantors for specific purposes as authorized by ED.
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IMPORTANT NOTICES

Gramm-Leach-Bliley Act Notice

In 1999, Congress enacted the Gramm-Leach-Bliley Act (Public Law 106-

102). This Act requires that lenders provide certain information to their 

customers regarding the collection and use of nonpublic personal 

information. 

We disclose nonpublic personal information to third parties only as 

necessary to process and service your loan and as permitted by the Privacy 

Act of 1974. See the Privacy Act Notice below. We do not sell or otherwise 

make available any information about you to any third parties for marketing 

purposes.

We protect the security and confidentiality of nonpublic personal 

information by implementing the following policies and practices. All 

physical access to the sites where nonpublic personal information is 

maintained is controlled and monitored by security personnel. Our 

computer systems offer a high degree of resistance to tampering and 

circumvention. These systems limit data access to our staff and contract 

staff on a “need-to-know” basis, and control individual users’ ability to 

access and alter records within the systems. All users of these systems are 

given a unique user ID with personal identifiers. All interactions by 

individual users with the systems are recorded.

Privacy Act Notice

The Privacy Act of 1974 (5 U.S.C. 552a) requires that the following notice be 

provided to you: 

The authority for collecting the requested information from and about you 

is §451 et seq. of the Higher Education Act (HEA) of 1965, as amended (20 

U.S.C. 1087a et seq.) and the authorities for collecting and using your Social 

Security Number (SSN) are §484(a)(4) of the HEA (20 U.S.C. 1091(a)(4)) and 

31 U.S.C. 7701(b). Participating in the William D. Ford Federal Direct Loan 

(Direct Loan) Program and giving us your SSN are voluntary, but you must 

provide the requested information, including your SSN, to participate.

The principal purposes for collecting the information on this form, including 

your SSN, are to verify your identity, to determine your eligibility to receive 

a loan or a benefit on a loan (such as a deferment, forbearance, discharge, 

or forgiveness) under the Direct Loan Program, to permit the servicing of 

your loan(s), and, if it becomes necessary, to locate you and to collect and 

report on your loan(s) if your loan(s) become delinquent or in default. We

also use your SSN as an account identifier and to permit you to access your 

account information electronically.

The information in your file may be disclosed, on a case-by-case basis or 

under a computer matching program, to third parties as authorized under 

routine uses in the appropriate systems of records notices. The routine uses 

of this information include, but are not limited to, its disclosure to federal, 

state, or local agencies, to private parties such as relatives, present and 

former employers, business and personal associates, to consumer reporting 

agencies, to financial and educational institutions, and to guaranty agencies 

in order to verify your identity, to determine your eligibility to receive a loan 

or a benefit on a loan, to permit the servicing or collection of your loan(s), 

to enforce the terms of the loan(s), to investigate possible fraud and to 

verify compliance with federal student financial aid program regulations, or 

to locate you if you become delinquent in your loan payments or if you 

default. To provide default rate calculations, disclosures may be made to 

guaranty agencies, to financial and educational institutions, or to state 

agencies. To provide financial aid history information, disclosures may be 

made to educational institutions. To assist program administrators with 

tracking refunds and cancellations, disclosures may be made to guaranty 

agencies, to financial and educational institutions, or to federal or state 

agencies. To provide a standardized method for educational institutions to 

efficiently submit student enrollment status, disclosures may be made to 

guaranty agencies or to financial and educational institutions. To counsel 

you in repayment efforts, disclosures may be made to guaranty agencies, to 

financial and educational institutions, or to federal, state, or local agencies. 

In the event of litigation, we may send records to the Department of Justice, 

a court, adjudicative body, counsel, party, or witness if the disclosure is 

relevant and necessary to the litigation. If this information, either alone or 

with other information, indicates a potential violation of law, we may send 

it to the appropriate authority for action. We may send information to 

members of Congress if you ask them to help you with federal student aid 

questions. In circumstances involving employment complaints, grievances,

or disciplinary actions, we may disclose relevant records to adjudicate or 

investigate the issues. If provided for by a collective bargaining agreement, 

we may disclose records to a labor organization recognized under 5 U.S.C. 

Chapter 71. Disclosures may be made to our contractors for the purpose of 

performing any programmatic function that requires disclosure of records. 

Before making any such disclosure, we will require the contractor to 

maintain Privacy Act safeguards. Disclosures may also be made to qualified 

researchers under Privacy Act safeguards.

Financial Privacy Act Notice

Under the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401-3421), ED 

will have access to financial records in your student loan file maintained in 

compliance with the administration of the Direct Loan Program.

Paperwork Reduction Notice

According to the Paperwork Reduction Act of 1995, no persons are required 

to respond to a collection of information unless the collection displays a 

valid OMB control number. Public reporting burden for this collection of 

information is estimated to average 0.5 hours (30 minutes) per response, 

including time for reviewing instructions, searching existing data sources, 

gathering and maintaining the data needed, and completing and reviewing 

the collection of information. The obligation to respond to this collection is 

required to obtain a benefit in accordance with 34 CFR 685.201(c)(1). Send 

comments regarding the burden estimate or any other aspect of this 

collection of information, including suggestions for reducing this burden, to 

the U.S. Department of Education, 400 Maryland Ave., SW, Washington, DC 

20210-4537 or e-mail ICDocketMgr@ed.gov and reference OMB Control 

Number 1845-0053. Note: Please do not return the completed Federal 

Direct Consolidation Loan Application and Promissory Note to this 

address.

If you have any questions regarding the status of your individual 

submission of this form, write directly to:

[INSERT SERVICER ADDRESS]
BORROWER’S RIGHTS AND RESPONSIBILITIES STATEMENT

SUBMIT PAGES 1 THROUGH 5

PAGE 10 OF 16

Important Notice:

This Borrower’s Rights and Responsibilities Statement provides additional 

information about the terms and conditions of the loan you will receive 

under the accompanying Federal Direct Consolidation Loan (Direct 

Consolidation Loan) Application and Promissory Note (Note). Please keep a 

copy of the Note and this Borrower’s Rights and Responsibilities Statement 

for your records. You may request another copy of this Borrower’s Rights 

and Responsibilities Statement at any time by contacting your servicer. 

Throughout this Borrower’s Rights and Responsibilities Statement, the words 

“we,” “us,” and “our” refer to the U.S. Department of Education.

1. THE WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

The William D. Ford Federal Direct Loan (Direct Loan) Program includes the 

following types of loans, known collectively as “Direct Loans”:

 Federal Direct Stafford/Ford Loans (Direct Subsidized Loans)

 Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized 

Loans)

 Federal Direct PLUS Loans (Direct PLUS Loans)

 Federal Direct Consolidation Loans (Direct Consolidation Loans)

The Direct Loan Program is authorized by Title IV, Part D, of the Higher 

Education Act of 1965, as amended (HEA), 20 U.S.C. 1070 et seq.

Direct Loans are made by the U.S. Department of Education. We contract 

with servicers to process Direct Loan payments, deferment and forbearance 

requests, and other transactions, and to answer questions about Direct 

Loans. We will provide you with the address and telephone number of the 

servicer for your loan.

2. LAWS THAT APPLY TO THIS NOTE

The terms and conditions of loans made under this Note are determined by 

the HEA and other applicable federal laws and regulations. These laws and 

regulations are referred to as “the Act” throughout this Borrower’s Rights 

and Responsibilities Statement. Under applicable state law, except as 

preempted by federal law, you may have certain borrower rights, remedies, 

and defenses in addition to those stated in the Note and this Borrower’s 

Rights and Responsibilities Statement.

NOTE: Any amendment to the Act that affects the terms of this Note will 

be applied to your loan in accordance with the effective date of the 

amendment.

3. DIRECT CONSOLIDATION LOAN IDENTIFICATION NUMBERS

Depending on the type(s) of federal education loan(s) that you choose to 

consolidate, your Direct Consolidation Loan may have up to two individual 

loan identification numbers. However, you will have only one Direct 

Consolidation Loan and will receive only one bill.

3a. The subsidized portion of your Direct Consolidation Loan (“Direct 

Subsidized Consolidation Loan”) will have one loan identification number 

representing the amount of the following types of loans that you 

consolidate:

 Subsidized Federal Stafford Loans

 Direct Subsidized Loans

 Subsidized Federal Consolidation Loans

 Direct Subsidized Consolidation Loans

 Federal Insured Student Loans (FISL)

 Guaranteed Student Loans (GSL)

3b. The unsubsidized portion of your Direct Consolidation Loan (“Direct 

Unsubsidized Consolidation Loan”) will have one identification number 

representing the amount of the following types of loans that you 

consolidate:

 Unsubsidized and Nonsubsidized Federal Stafford Loans

 Direct Unsubsidized Loans

 Unsubsidized Federal Consolidation Loans

 Direct Unsubsidized Consolidation Loans

 Federal PLUS Loans (for parents or for graduate and professional 

students)

 Direct PLUS Loans (for parents or for graduate and professional 

students)

 Direct PLUS Consolidation Loans

 Federal Perkins Loans

 National Direct Student Loans (NDSL)

 National Defense Student Loans (NDSL)

 Federal Supplemental Loans for Students (SLS)

 Parent Loans for Undergraduate Students (PLUS)

 Auxiliary Loans to Assist Students (ALAS)

 Health Professions Student Loans (HPSL)

 Health Education Assistance Loans (HEAL)

 Nursing Student Loans (NSL)

 Loans for Disadvantaged Students (LDS)

4. ADDING ELIGIBLE LOANS TO YOUR DIRECT CONSOLIDATION LOAN

You may add eligible loans to your Direct Consolidation Loan by submitting 

a request to us within 180 days of the date your Direct Consolidation Loan is 

made. (Your Direct Consolidation Loan is “made” on the date we pay off the 

first loan that you are consolidating.) After we pay off any loans that you 

add during the 180-day period, we will notify you of the new total amount 

of your Direct Consolidation Loan and of any adjustments that must be 

made to your monthly payment amount and/or interest rate.

If you want to consolidate any additional eligible loan(s) after the 180-day 

period, you must apply for a new Direct Consolidation Loan.

5. LOANS THAT MAY BE CONSOLIDATED

General

Only the federal education loans listed in Items 3a.and 3b. of this 

Borrower’s Rights and Responsibilities Statement may be consolidated into 

a Direct Consolidation Loan. You may only consolidate loans that are in a 

grace period or in repayment (including loans in deferment or forbearance). 

At least one of the loans that you consolidate must be a Direct Loan 

Program loan or a Federal Family Education Loan (FFEL) Program loan.

Defaulted loans

You may consolidate a loan that is in default if: 

 You first make satisfactory repayment arrangements with the holder 

of the defaulted loan, or 

 You agree to repay your Direct Consolidation Loan under the IBR Plan, 

the Pay As You Earn Plan, or the ICR Plan (see Item 11). 

Existing consolidation loans

If you want to consolidate an existing Direct Consolidation Loan, you must 

include an additional eligible loan in the consolidation. However, you may 

consolidate an existing Federal Consolidation Loan into a new Direct 

Consolidation Loan without including an additional loan if you are:
BORROWER’S RIGHTS AND RESPONSIBILITIES STATEMENT

SUBMIT PAGES 1 THROUGH 5

PAGE 11 OF 16

 Consolidating a delinquent Federal Consolidation Loan that the lender 

has submitted to the guaranty agency for default aversion, and you 

agree to repay your new Direct Consolidation Loan under the IBR Plan, 

the Pay As You Earn Plan, or the ICR Plan;

 Consolidating a defaulted Federal Consolidation Loan and you agree to 

repay your new Direct Consolidation Loan under the IBR Plan, the Pay 

As You Earn Plan, or the ICR Plan;

 Consolidating a Federal Consolidation Loan into a new Direct 

Consolidation Loan to use the Public Service Loan Forgiveness 

program described in Item 18 of this Borrower’s Rights and 

Responsibilities Statement;

 Consolidating a Federal Consolidation Loan to use the no accrual of 

interest benefit for active duty service members described in Item 8.

You may not consolidate an existing joint consolidation loan. A joint 

consolidation loan is a Direct Consolidation Loan or Federal Consolidation 

that was made jointly to you and your spouse. 

6. INFORMATION YOU MUST REPORT TO US

Until your loan is repaid, you must notify your servicer if you:

 Change your address or telephone number;

 Change your name (for example, maiden name to married name);

 Change your employer or your employer’s address or telephone 

number changes; or

 Have any other change in status that would affect your loan (for 

example, if you receive a deferment while you are unemployed, but 

you find a job and therefore no longer meet the eligibility 

requirements for the deferment).

7. INTEREST RATE

The interest rate on your Direct Consolidation Loan will be the weighted 

average of the interest rates on the loans you are consolidating, rounded to 

the nearest higher one-eighth of one percent. There is no cap on the 

interest rate that is determined under this formula. We will send you a 

notice that tells you the interest rate on your loan.

The interest rate on a Direct Consolidation Loan is a fixed rate. This means 

that the interest rate will remain the same throughout the life of your loan.

If you qualify under the Servicemembers Civil Relief Act, the interest rate on 

your loans obtained prior to military service may be limited to 6% during 

your military service. Contact your servicer for information about how to 

request this benefit.

8. PAYMENT OF INTEREST

General

In general, interest accrues on a Direct Consolidation Loan from the date 

the loan is made until it is paid in full or discharged. You are responsible for 

paying the interest that accrues as explained below.

Payment of interest on a Direct Subsidized Consolidation Loan 

Except as explained in Item 9 of this Borrower’s Rights and Responsibilities

Statement, you are not required to pay the interest that accrues on a Direct 

Subsidized Consolidation Loan (see Item 3a. of this Borrower’s Rights and 

Responsibilities Statement) during deferment periods, and during certain 

periods of repayment under the IBR Plan and the Pay As You Earn Plan. 

Except as explained below under No accrual of interest benefit for active 

duty service members, you must pay the interest that accrues on a Direct 

Subsidized Consolidation Loan during all other periods.

If you were a first-time borrower on or after July 1, 2013 when you received 

a Direct Subsidized Loan that you are now consolidating, you may be 

responsible for paying the interest that accrues during all periods on the 

portion of your Direct Consolidation Loan that repaid the Direct Subsidized 

Loan, as explained in Item 9 of this Borrower’s Rights and Responsibilities 

Statement.

Payment of interest on a Direct Unsubsidized Consolidation Loan

Except as explained below for certain borrowers who are active duty service 

members, you must pay the interest that accrues on a Direct Unsubsidized 

Consolidation Loan (see Item 3b. of this Borrower’s Rights and 

Responsibilities Statement) during all periods.

No accrual of interest benefit for active duty service members

Under the no accrual of interest benefit for active duty service members, 

you are not required to pay the interest that accrues during periods of 

qualifying active duty military service (for up to 60 months) on the portion 

of a Direct Consolidation Loan that repaid a Direct Loan Program or FFEL 

Program loan first disbursed on or after October 1, 2008.

Interest capitalization

If you do not pay the interest as it accrues on either a Direct Subsidized 

Consolidation Loan or a Direct Unsubsidized Consolidation Loan (during 

periods when you are responsible for paying the interest), we will add the 

accrued interest to the unpaid principal balance of your loan at the end of 

the deferment or forbearance period. This is called “capitalization.” 

Capitalization increases the unpaid principal balance of your loan, and 

interest then accrues on the increased principal balance.

The chart that follows shows the difference in the total amount you would 

repay on a $15,000 Direct Unsubsidized Consolidation Loan if you pay the 

interest as it accrues during a 12-month deferment or forbearance period, 

compared to the amount you would repay if you do not pay the interest and 

it is capitalized.

The example in the chart shows payments made under the Standard 

Repayment Plan (with a repayment period of 15 years based on the amount 

of the Direct Consolidation Loan) at an interest rate of 8.25%. In this 

example, you would pay $12 less per month and $2,150 less altogether if 

you pay the interest as it accrues during a 12-month deferment or 

forbearance period.

If you pay the interest 

as it accrues...

If you do not pay 

the interest and it 

is capitalized...

Loan Amount $15,000 $15,000

Interest for 12 Months $1,238

(paid as accrued)

$1,238

(unpaid and 

capitalized)

Principal to be Repaid $15,000 $16,238

Monthly Payment $146 $158

Number of Payments 180 180

Total Repaid $26,209 $28,359

Federal income tax reduction

You may be able to claim a federal income tax deduction for interest 

payments you make on Direct Loans. For further information, refer to IRS 

Publication 970, which is available at http://www.irs.ustreas.gov.

9. RESPONSIBILITY FOR PAYING ALL INTEREST ON ALL OR PART OF THE

SUBSIDIZED PORTION OF A DIRECT CONSOLIDATION LOAN (FOR FIRSTTIME BORROWERS ON OR AFTER JULY 1, 2013)
BORROWER’S RIGHTS AND RESPONSIBILITIES STATEMENT

SUBMIT PAGES 1 THROUGH 5

PAGE 12 OF 16

If you were a first-time borrower on or after July 1, 2013 (see Note below) 

when you received a Direct Subsidized Loan and you are now consolidating 

that loan, you may be responsible for paying the interest that accrues 

during all periods on the portion of your Direct Consolidation Loan that 

repaid the Direct Subsidized Loan, as explained below. 

There is a limit on the maximum period of time (measured in academic 

years) for which a first-time borrower on or after July 1, 2013 can receive 

Direct Subsidized Loans. In general, a first-time borrower may not receive 

Direct Subsidized Loans for more than 150% of the published length of his 

or her program of study. This is called the “maximum eligibility period.”

Generally, a first-time borrower on or after July 1, 2013 will become 

responsible for paying the interest that accrues during all periods on 

previously received Direct Subsidized Loans if the borrower:

 Continues to be enrolled in any undergraduate program after having 

received Direct Subsidized Loans for his or her maximum eligibility 

period, or

 Enrolls in another undergraduate program that is the same length as 

or shorter than the borrower’s previous program.

There are a few exceptions to this rule. Your servicer can provide you with 

more information about this requirement and the exceptions. 

You must pay the interest that accrues during all periods (including 

deferment periods) on the portion of your Direct Consolidation Loan that 

repaid a Direct Subsidized Loan you received as a first-time borrower on or 

after July 1, 2013 if:

 Before consolidating the Direct Subsidized Loan, you become responsible 

for paying all interest that accrues on that loan, as explained above; or 

 After consolidating the Direct Subsidized Loan you become responsible 

for paying all interest that accrues on that loan, as explained above. 

Note: A first-time borrower on or after July 1, 2013 is an individual who has 

no outstanding balance on a Direct Loan Program loan or a Federal Family 

Education Loan (FFEL) Program loan on July 1, 2013, or who has no 

outstanding balance on a Direct Loan or FFEL program loan on the date he 

or she obtains a Direct Loan Program loan after July 1, 2013.

10. REPAYMENT INCENTIVE PROGRAMS

A repayment incentive is a benefit that we offer to encourage you to repay 

your loan on time. The repayment incentive program described below may 

be available to you. 

Interest rate reduction for automatic withdrawal of payments

Under the automatic withdrawal option, your bank automatically deducts 

your monthly loan payment from your checking or savings account and 

sends it to us. Automatic withdrawal helps to ensure that your payments 

are made on time. In addition, you receive a 0.25% interest rate reduction 

while you repay under the automatic withdrawal option. Your servicer will 

provide you with information about the automatic withdrawal option. You 

can also get the information on your servicer’s web site, or by calling your 

servicer. Your servicer’s web site address and toll-free telephone number 

are provided on correspondence that your servicer sends you.

Note: Another repayment incentive program, the up-front interest rebate, 

was available on Direct Subsidized Loans, Direct Unsubsidized Loans, and 

Direct PLUS Loans that were first disbursed before July 1, 2012. The rebate 

is equal to a percentage of the loan amount, and is the same amount that 

would result if the interest rate on the loan were lowered by a specific 

percentage. To permanently keep an up-front interest rebate, a borrower 

must make each of the first 12 required monthly payments on time when 

the loan enters repayment. If you consolidate a Direct Loan on which you 

received an up-front interest rebate before you have permanently earned 

the rebate (the correspondence you received about your loan will tell you if 

you received a rebate), you will lose the rebate. The rebate amount will be 

added back to the principal balance of the loan before it is consolidated.

11. REPAYING YOUR LOAN

General

Unless you receive a deferment or forbearance on your loan (see Item 17), 

your first payment will be due within 60 days of the first disbursement of 

your Direct Consolidation Loan. Your servicer will notify you of the date your 

first payment is due.

You must make payments on your loan even if you do not receive a bill or 

repayment notice. 

You must repay all of your Direct Loans under the same repayment plan, 

unless you want to repay your loans under the IBR Plan, the Pay As You Earn 

Plan, or the ICR Plan (see below) and you have other Direct Loans that do 

not qualify for repayment under those plans. In that case, you may select 

the IBR, Pay As You Earn, or ICR plan for the loans that are eligible for 

repayment under those plans, and may select a different repayment plan 

for the loans that may not be repaid under the IBR, Pay As You Earn, or ICR

plan. 

Repayment plans for all Direct Consolidation Loans

You may choose the Standard Repayment Plan, the Graduated Repayment 

Plan, the Extended Repayment Plan, or the Income-Contingent Repayment 

Plan to repay any Direct Consolidation Loan.

Standard Repayment Plan – Under this plan, you will make fixed monthly 

payments and repay your loan in full within 10 to 30 years (not including 

periods of deferment or forbearance) from the date the loan entered 

repayment, depending on the amount of your Direct Consolidation Loan 

and the amount of your other student loan debt (not to exceed the amount 

you are consolidating) as listed in the Loans You Do Not Want to 

Consolidate section of your Note (see the chart below). Your payments 

must be at least $50 a month ($600 a year) and will be more, if necessary, 

to repay the loan within the required time period. 

Graduated Repayment Plan – Under this plan, you will usually make lower 

payments at first, and your payments will gradually increase over time. You 

will repay your loan in full within 10 to 30 years (not including periods of 

deferment or forbearance) from the date the loan entered repayment, 

depending on the total amount of your Direct Consolidation Loan and the 

amount of your other student loan debt (not to exceed the amount you are 

consolidating) as listed in Loans You Do Not Want to Consolidate section of 

your Note (see the chart below). Your monthly payment must at least be 

equal to the amount of interest that accrues each month. No single 

payment will be more than three times greater than any other payment.

Standard and Graduated Plans: Maximum Repayment Periods

Total Education Loan Indebtedness Maximum Repayment Period

Less than $7,500 10 years

$7,500 to $9,999 12 years

$10,000 to $19,999 15 years

$20,000 to $39,999 20 years

$40,000 to $59,999 25 years

$60,000 or more 30 years
BORROWER’S RIGHTS AND RESPONSIBILITIES STATEMENT

SUBMIT PAGES 1 THROUGH 5

PAGE 13 OF 16

Extended Repayment Plan – You are eligible for this plan only if: (1) you 

have an outstanding balance on Direct Loan Program Loans that exceeds 

$30,000; and (2) you had no outstanding balance on a Direct Loan Program 

loan as of October 7, 1998, or on the date you obtained a Direct Loan 

Program loan on or after October 7, 1998. 

Under this plan, you will repay your loan in full over a repayment period not 

to exceed 25 years (not including periods of deferment or forbearance) 

from the date the loan entered repayment. You may choose to make fixed 

monthly payments or graduated monthly payments that start out lower and 

gradually increase over time. If you make fixed monthly payments, your 

payments must be at least $50 a month ($600 a year) and will be more, if 

necessary, to repay the loan within the required time period. If you make 

graduated monthly payments, you will usually make lower payments at 

first, and your payments will gradually increase over time. If you make 

graduated payments, your monthly payment must at least be equal to the 

amount of interest that accrues each month, and no single payment will be 

more than three times greater than any other payment.

Income-Contingent Repayment Plan (ICR Plan) – Under this plan, your 

monthly payment amount will be either 20% of your discretionary income 

or a percentage of what you would repay under a Standard Repayment Plan 

with a 12-year repayment period, whichever is less. Discretionary income 

for this plan is the difference between your adjusted gross income and the 

poverty guideline amount for your state of residence and family size. If you 

are married and file a joint federal income tax return, the income used to 

determine your ICR Plan payment amount will be the combined adjusted 

gross income of you and your spouse. Until we obtain the information 

needed to calculate your monthly payment amount, your payment will 

equal the amount of interest that accrues monthly on your loan unless you 

request a forbearance. 

While you are repaying under the ICR Plan, you must annually provide 

documentation of your income and certify your family size. Your monthly 

payment amount may be adjusted annually based on the updated income 

and family size information that you provide.

Under the ICR Plan, if your loan is not repaid in full after you have made the 

equivalent of 25 years of qualifying monthly payments and at least 25 years 

have elapsed, any remaining loan amount will be forgiven. You may have to 

pay federal income tax on the loan amount that is forgiven.

Additional repayment plans for Direct Consolidation Loans that did not 

repay parent PLUS loans

In addition to the four repayment plans listed above that are available for 

any Direct Consolidation Loan, if you are not consolidating any parent Direct 

PLUS Loans or parent FFEL PLUS Loans you may also choose the IncomeBased Repayment Plan or the Pay As You Earn Repayment Plan to repay 

your Direct Consolidation Loan. A parent PLUS loan is a PLUS loan that you 

obtained to help pay for your child’s undergraduate education. You may not 

choose the Income-Based Repayment Plan or the Pay As You Earn Plan if 

you are consolidating a parent PLUS loan, but you may choose the IncomeContingent Repayment Plan (see above).

Income-Based Repayment Plan (IBR Plan) – Under the IBR Plan, your 

monthly payment amount is generally 15% (10% if you are a new borrower; 

see Note below) of your annual discretionary income, divided by 12. 

Discretionary income for this plan is the difference between your adjusted 

gross income and 150% of the poverty guideline amount for your state of 

residence and family size. If you are married and file a joint federal income 

tax return, the income used to determine your IBR Plan payment amount 

will be the combined adjusted gross income of you and your spouse.

To initially qualify for the IBR Plan and to continue to make payments that 

are based on your income, the amount you would be required to pay on 

your eligible student loans under the IBR Plan (as described above) must be 

less than the amount you would have to pay under the Standard Repayment 

Plan. If your IBR Plan payment amount is less than the amount you would 

have to pay under the Standard Repayment Plan, you are considered to 

have a “partial financial hardship.” 

If you are married and file a joint federal income tax return, the loan 

amount we use to determine whether you have a partial financial hardship 

will include your eligible loans and your spouse’s eligible loans.

While you are repaying under the IBR Plan, you must annually provide 

documentation of your income and certify your family size so that we may 

determine whether you continue to have a partial financial hardship. Your 

monthly payment amount may be adjusted annually based on the updated 

income and family size information that you provide. If we determine that 

you no longer have a partial financial hardship, you may remain on the IBR 

Plan, but your monthly payment will no longer be based on your income. 

Instead, your monthly payment will be what you would be required to pay 

under the Standard Repayment Plan, based on the amount you owed on 

your eligible loans at the time you entered the IBR Plan. 

Under the IBR Plan, if your loan is not repaid in full after you have made the 

equivalent of 25 years (20 years if you are a new borrower) of qualifying 

monthly payments and at least 25 years (20 years if you are a new 

borrower) have elapsed, any remaining loan amount will be forgiven. You 

may have to pay federal income tax on the loan amount that is forgiven.

Note: You are a new borrower for the IBR Plan if you have no outstanding 

balance on a Direct Loan Program or FFEL Program loan on July 1, 2014, or if

you have no outstanding balance on a Direct Loan Program or FFEL Program 

loan on the date you obtain a Direct Loan Program loan after July 1, 2014. 

Your servicer will determine whether you are a new borrower based on the 

information about your loans in the U.S. Department of Education’s 

National Student Loan Data System.

Pay As You Earn Repayment Plan (Pay As You Earn Plan) – Under the Pay 

As You Earn Plan, your monthly payment amount is generally 10% of your 

annual discretionary income, divided by 12. Discretionary income for this 

plan is the difference between your adjusted gross income and 150% of the 

poverty guideline amount for your state of residence and family size. If you 

are married and file a joint federal income tax return, the income used to 

determine your Pay As You Earn Plan payment amount will be the combined 

adjusted gross income of you and your spouse.

The Pay As You Earn Plan is available only to new borrowers. You are a new 

borrower for the Pay As You Earn Plan if:

1. You had no outstanding balance on a Direct Loan Program or FFEL 

Program loan as of October 1, 2007, or you have no outstanding 

balance on a Direct Loan Program or FFEL Program loan when you 

obtain a new loan on or after October 1, 2007, and

2. You receive a disbursement of a Direct Subsidized Loan, Direct 

Unsubsidized Loan, or student Direct PLUS Loan (a Direct PLUS Loan 

made to a graduate or professional student) on or after October 1, 

2011, or you receive a Direct Consolidation Loan based on an 

application received on or after October 1, 2011. However, you are 

not considered to be a new borrower for the Pay As You Earn Plan if 

the Direct Consolidation Loan you receive repays loans that would 

make you ineligible under part 1 of this definition. 

In addition to being a new borrower, to initially qualify for the Pay As You 

Earn Plan and to continue to make payments that are based on your 
BORROWER’S RIGHTS AND RESPONSIBILITIES STATEMENT

SUBMIT PAGES 1 THROUGH 5

PAGE 14 OF 16

income, the amount you would be required to pay on your eligible student 

loans under the Pay As You Earn Plan (as described above) must be less than 

the amount you would have to pay under the Standard Repayment Plan. If 

your Pay As You Earn Plan payment amount is less than the amount you 

would have to pay under the Standard Repayment Plan, you are considered 

to have a “partial financial hardship.” 

If you are married and file a joint federal income tax return, the loan 

amount we use to determine whether you have a partial financial hardship 

will include your eligible loans and your spouse’s eligible loans.

While you are repaying under the Pay As You Earn Plan, you must annually 

provide documentation of your income and certify your family size so that 

we may determine whether you continue to have a partial financial 

hardship. Your monthly payment amount may be adjusted annually based 

on the updated income and family size information that you provide. If we 

determine that you no longer have a partial financial hardship, you may 

remain on the Pay As You Earn Plan, but your monthly payment will no 

longer be based on your income. Instead, your monthly payment will be 

what you would be required to pay under the Standard Repayment Plan, 

based on the amount you owed on your eligible loans at the time you 

entered the Pay As You Earn Plan.

Under the Pay As You Earn Plan, if your loan is not repaid in full after you 

have made the equivalent of 20 years of qualifying monthly payments and 

at least 20 years have elapsed, any remaining loan amount will be forgiven. 

You may have to pay federal income tax on the loan amount that is 

forgiven.

Additional repayment plan information

If you can show to our satisfaction that the terms and conditions of the 

repayment plans described above are not adequate to meet your 

exceptional circumstances, we may provide you with an alternative 

repayment plan.

If you do not choose a repayment plan, we will place you on the Standard 

Repayment Plan.

You may change repayment plans at any time after you have begun 

repaying your loan. There is no penalty if you make loan payments before 

they are due, or pay more than the amount due each month (prepayments).

We apply your payments made under any plan other than the IBR Plan and 

the Pay As You Earn Plan in the following order: 

1. Late charges and collection costs, 

2. Outstanding interest, and 

3. Outstanding principal. 

We apply your payments made under the IBR Plan or the Pay As You Earn 

Plan in the following order: 

1. Outstanding interest, 

2. Late charges and collection costs, and 

3. Outstanding principal.

We apply any prepayments in accordance with the Act. Your servicer can

provide more information about how prepayments are applied.

When you have repaid your loan in full, your servicer will send you a notice 

telling you that you have paid off your loan. You should keep this notice in a 

safe place.

12. TRANSFER OF LOAN

We may transfer the servicing of one or all of your loans to another servicer 

without your consent. If there is a change in the address to which you must 

send payments or direct communications, we will notify you of the new 

servicer’s name, address and telephone number, the effective date of the 

transfer, and the date when you must begin sending payments or directing 

communications to that servicer. Transfer of a loan to a different servicer 

does not affect your rights and responsibilities under that loan.

13. LATE CHARGES AND COLLECTION COSTS

If you do not make any part of a payment within 30 days after it is due, we 

may require you to pay a late charge. This charge will not be more than six 

cents for each dollar of each late payment. If you do not make payments as 

scheduled, we may also require you to pay other charges and fees involved 

in collecting your loan.

14. DEMAND FOR IMMEDIATE REPAYMENT

The entire unpaid amount of your loan becomes due and payable (this is 

called “acceleration”) if you:

 Make a false statement that causes you to receive a loan that you are 

not eligible to receive; or

 Default on your loan.

15. DEFAULTING ON YOUR LOAN

Default (failing to repay your loan) is defined in detail under “Acceleration 

and Default” in the Note Terms and Conditions section of this Note. If you 

default:

 We will require you to immediately repay the entire unpaid amount of 

your loan.

 We may sue you, take all or part of your federal and state tax refunds 

and other federal or state payments, and/or garnish your wages so 

that your employer is required to send us part of your salary to pay off 

your loan.

 We will require you to pay reasonable collection fees and costs, plus 

court costs and attorney fees.

 You will lose eligibility for other federal student aid and assistance 

under most federal benefit programs.

 You will lose eligibility for loan deferments.

We will report your default to nationwide consumer reporting agencies (see 

Item 16). This will harm your credit history and may make it difficult for you 

to obtain credit cards, home or car loans, or other forms of consumer credit.

16. CONSUMER REPORTING AGENCY NOTIFICATION

We will report information about your loan to nationwide consumer 

reporting agencies (commonly known as “credit bureaus”) on a regular 

basis. This information will include the disbursement dates, amount, and 

repayment status of your loan (for example, whether you are current or 

delinquent in making payments). Your loan will be identified as an 

education loan.

If you default on a loan, we will report this to nationwide consumer 

reporting agencies. We will notify you at least 30 days in advance that we

plan to report default information to a consumer reporting agency unless 

you resume making payments on the loan within 30 days of the date of the 

notice. You will be given a chance to ask for a review of the debt before we 

report it.

If a consumer reporting agency contacts us regarding objections you have 

raised about the accuracy or completeness of any information we have 

reported, we are required to provide the agency with a prompt response.
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17. DEFERMENT AND FORBEARANCE (POSTPONING PAYMENTS)

General

If you meet certain requirements, you may receive a deferment that allows 

you to temporarily stop making payments on your loan. 

If you cannot make your scheduled loan payments, but do not qualify for a 

deferment, we may give you a forbearance. A forbearance allows you to 

temporarily stop making payments on your loan, temporarily make smaller 

payments, or extend the time for making payments.

Deferment

You may receive a deferment:

 While you are enrolled at least half time at an eligible school;

 While you are in a full-time course of study in a graduate fellowship 

program;

 While you are in an approved full-time rehabilitation program for 

individuals with disabilities;

 While you are unemployed (for a maximum of three years; you must 

be diligently seeking, but unable to find, full-time employment); 

 While you are experiencing an economic hardship (including Peace 

Corps service), as defined in the Act (for a maximum of three years);

 While you are serving on active duty during a war or other military 

operation or national emergency or performing qualifying National 

Guard duty during a war or other military operation or national 

emergency and, if you were serving on or after October 1, 2007, for an 

additional 180-day period following the demobilization date for your 

qualifying service; or

 If you are a member of the National Guard or other reserve 

component of the U.S. Armed Forces (current or retired) and you are 

called or ordered to active duty while you are enrolled at least half 

time at an eligible school or within 6 months of having been enrolled 

at least half time, during the 13 months following the conclusion of 

your active duty service, or until you return to enrolled student status 

on at least a half-time basis, whichever is earlier.

You may be eligible to receive additional deferments if, at the time you 

received your first Direct Loan, you had an outstanding balance on a loan 

made under the FFEL Program before July 1, 1993. If you meet this 

requirement, contact your servicer about additional deferments that may 

be available.

You may receive a deferment based on your enrollment in school on at least 

a half-time basis if:

1. You submit a deferment request to your servicer along with 

documentation of your eligibility for the deferment, or 

2. Your servicer receives information from the school you are attending 

that indicates you are enrolled at least half time. 

If your servicer processes a deferment based on information received from 

your school, you will be notified of the deferment and will have the option 

of canceling the deferment and continuing to make payments on your loan.

For all other deferments, you (or, for a deferment based on active duty 

military service or qualifying National Guard duty during a war or other 

military operation or national emergency, a representative acting on your 

behalf) must submit a deferment request to your servicer, along with 

documentation of your eligibility for the deferment. In certain 

circumstances, you may not be required to provide documentation of your 

eligibility if your servicer confirms that you have been granted the same 

deferment for the same period of time on a FFEL Program loan. Your 

servicer can provide you with a deferment request form that explains the 

eligibility and documentation requirements for the type of deferment you 

are requesting. You may also obtain deferment request forms and 

information on deferment eligibility requirements from your servicer’s web 

site. 

If you are in default on your loan, you are not eligible for a deferment.

You are not responsible for paying the interest on a Direct Subsidized 

Consolidation Loan during a period of deferment, except as explained in 

Item 9 of this Borrower’s Rights and Responsibilities Statement. However, 

you are responsible for paying the interest on a Direct Unsubsidized 

Consolidation Loan during a period of deferment. 

Forbearance

We may give you a forbearance if you are temporarily unable to make your 

scheduled loan payments for reasons including, but not limited to, financial 

hardship and illness. 

We will give you a forbearance if: 

 You are serving in a medical or dental internship or residency program, 

and you meet specific requirements;

 The total amount you owe each month for all of the student loans you 

received under Title IV of the Act (Direct Loan Program loans, FFEL 

Program loans, and Federal Perkins Loans) is 20% or more of your total 

monthly gross income (for a maximum of three years);

 You are serving in a national service position for which you receive a 

national service education award under the National and Community 

Service Act of 1993. In some cases, the interest that accrues on a 

qualified loan during the service period will be paid by the Corporation 

for National and Community Service;

 You are performing service that would qualify you for loan forgiveness 

under the Teacher Loan Forgiveness program that is available to 

certain Direct Loan and FFEL program borrowers;

 You qualify for partial repayment of your loans under a student loan 

repayment program administered by the Department of Defense; or

 You are called to active duty in the U.S. Armed Forces. 

To request a forbearance, contact your servicer. Your servicer can explain 

the eligibility and documentation requirements for the type of forbearance 

you are requesting. You may also obtain forbearance information on 

forbearance eligibility requirements from your servicer’s web site. 

Under certain circumstances, we may also give you a forbearance without 

requiring you to submit a request or documentation. These circumstances 

include, but are not limited to, the following:

 Periods necessary for us to determine your eligibility for a loan 

discharge;

 A period of up to 60 days in order for us to collect and process 

documentation related to your request for a deferment, forbearance, 

change in repayment plan, or consolidation loan (we do not capitalize 

the interest that is charged during this period); or

 Periods when you are involved in a military mobilization, or a local or 

national emergency.

You are responsible for paying the interest that accrues on your entire 

Direct Consolidation Loan during a period of forbearance.

18. DISCHARGE (HAVING YOUR LOAN FORGIVEN)

Loan discharge due to death, bankruptcy, total and permanent disability, 

school closure, false certification, identity theft, or unpaid refund
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We will discharge (forgive) your loan if:

 You die. Your servicer must receive acceptable documentation (as 

defined in the Act) of your death. We will also discharge the portion of 

a Direct Consolidation Loan that repaid one or more Direct PLUS Loans 

or Federal PLUS Loans obtained on behalf of a child who dies.

 Your loan is discharged in bankruptcy after you have proven to the 

bankruptcy court that repaying the loan would cause undue hardship. 

Direct Loans are not otherwise automatically discharged if you file for 

bankruptcy. 

 You become totally and permanently disabled (as defined in the Act) 

and meet certain other requirements. 

In certain cases, we may also discharge all or a portion of your loan if:

 One or more Direct Loan Program, FFEL Program, or Federal Perkins 

Loan Program loans that you consolidated was used to pay for a 

program of study that you (or the child for whom you borrowed a 

Direct PLUS Loan or Federal PLUS Loan) were unable to complete 

because the school closed;

 Your eligibility (or the eligibility of the child for whom you borrowed a 

Direct PLUS Loan or Federal PLUS Loan) for one or more of the Direct 

Loan Program or FFEL Program loans that you consolidated was falsely 

certified by the school;

 Your eligibility for one or more of the Direct Loan Program or FFEL 

Program loans that you consolidated was falsely certified as a result of 

a crime of identity theft; or

 The school did not pay a required refund of one or more Direct Loan 

Program or FFEL Program loans that you consolidated. 

Teacher Loan Forgiveness

We may forgive a portion of your Direct Consolidation Loan that repaid 

Direct Subsidized Loans or Direct Unsubsidized Loans you received after 

October 1, 1998, or subsidized or unsubsidized Federal Stafford Loans you 

received under the FFEL program after October 1, 1998 if you: 

 Teach full time for five consecutive years in certain low-income 

elementary or secondary schools, or for low-income educational 

service agencies; 

 Meet certain other qualifications; and 

 Did not owe a Direct Loan or a FFEL program loan as of October 1, 

1998, or as of the date you obtain a loan after October 1, 1998. 

Public Service Loan Forgiveness

A Public Service Loan Forgiveness program is also available. Under this 

program, we will forgive the remaining balance due on your eligible Direct 

Loan Program loans after you have made 120 payments on those loans 

(after October 1, 2007) under certain repayment plans while you are 

employed full-time in certain public service jobs.

Additional loan discharge information

The Act may provide for certain loan forgiveness or repayment benefits on 

your loans in addition to the benefits described above. If other forgiveness 

or repayment options become available, your servicer will provide 

information about these benefits.

For a discharge based on your death or the death of the child on whose 

behalf you obtained a Direct PLUS Loan or Federal PLUS Loan that was 

consolidated, a family member must contact your loan servicer. To request 

a loan discharge based on one of the other conditions described above 

(except for a discharge due to bankruptcy), you must complete an 

application. Your servicer can tell you how to obtain an application.

In some cases, you may assert, as a defense against collection of your loan, 

that the school did something wrong or failed to do something that it 

should have done. You can make such a defense against repayment only if 

the school’s act or omission directly relates to your loan or to the 

educational services that the loan was intended to pay for, and if what the 

school did or did not do would give rise to a legal cause of action against the 

school under applicable state law. If you believe that you have a defense 

against repayment of your loan, contact your servicer.

We do not guarantee the quality of the academic programs provided by 

schools that participate in federal student financial aid programs. You must 

repay your loan even if you do not complete your education, are unable to 

obtain employment in the field of study for which the school provided 

training, or are dissatisfied with, or do not receive, the education you paid 

for with the loan.

19. DEPARTMENT OF DEFENSE AND OTHER FEDERAL AGENCY LOAN 

REPAYMENT

Under certain circumstances, military personnel may have their federal 

education loans repaid by the Secretary of Defense. This benefit is offered 

as part of a recruitment program that does not apply to individuals based 

on their previous military service or to those who are not eligible for 

enlistment in the U.S. Armed Forces. For more information, contact your 

local military service recruitment office.

Other agencies of the federal government may also offer student loan 

repayment programs as an incentive to recruit and retain employees. 

Contact the agency’s human resources department for more information.

END OF BORROWER’S RIGHTS AND RESPONSIBILITIES STATEMENT