Loans for Disadvantaged Students (LDS) provide extra funding for health profession students of diverse backgrounds or from disadvantaged communities. Although these loans are part of the federal student loan program, they are very different from Stafford loans.
|Where Do I Send My Payments?||Payment Start Date||Interest Rate||Postponements Available?|
|Usually a company contracted by your school. Contact your financial aid office to learn more.||1 year after you graduate or fall below full-time enrollment.||5%||Yes, under certain conditions.|
Where Do I Find Out What I Owe?
If you're not sure whether or not you have an LDS loan, or if you need to find out where to send your payments, check your credit report for free at AnnualCreditReport.com.
Can I Consolidate My LDS?
Yes, if you combine it with at least one Direct or Federal Family Education Loan Program (FFELP) loan into a Direct Consolidation loan. However, consolidation is not right for everyone. Depending on your situation, you can lose certain repayment benefits by consolidating. Find out more about this type of consolidation on the U.S. Department of Education's website.
Can I Change My Monthly Payment?
LDS loans have fewer repayment options than other federal student loans, but they do offer a couple of repayment options for you to choose from:
- Standard repayment: Equal payments every month, usually for 10 years.
- Graduated repayment: Payments start small and grow over time, usually for 10 years (120 payments).
- Extended repayment: You may have the option to extend your payments for up to 25 years (300 payments), as determined by your school or servicer.
Depending on your situation, you may be able to use one of these options to put your monthly payments on hold temporarily:
Option 1: Deferment: The great thing about postponing payments using deferment is that interest doesn't continue to build up. It also doesn't start the clock on your 10-year repayment period. However, you do have to meet certain criteria to be able to use this option.
- Active duty in the uniformed services—up to 3 years.
- Peace Corps volunteer—up to 3 years.
- Advanced professional training—unlimited.
- Leave of absence to pursue related educational activity—up to 2 years.
- Training fellowship, training programs, and related educational activities for graduates of health professions schools—up to 2 years.
Option 2: Forbearance: If you don't qualify for deferment, but still need a break from your payments, there are some good reasons to use forbearance.
- Poor health
- Other extraordinary circumstances that could affect your ability to pay your loans
However, this option should be your last resort—here’s why:
- Interest will accrue on your loan.
- Your repayment period will begin—this means that your payments will be higher once your forbearance period ends because you will have less time left to repay the loan.
A minimum payment must be made on all accrued interest during any period of forbearance.
What Happens If I Miss Any Of My LDS Payments?
Unlike Stafford loans, missing even one or two payments can put your LDS into default. This means that the following could happen:
- You will be charged late fees up to 6% as a penalty.
- Your school may require that you pay the entire amount of your loan at once.
- Other collections charges may apply.
- Your wages may be garnished.
- Your school may even hold all of your academic transcripts and recommendation letters.