---
kind: "section"
citation: "34 C.F.R. § 685.207"
title: "34"
number: "685.207"
heading: "Obligation to repay."
url: "https://uscodex.org/cfr/34/685.207"
---

# §685.207. Obligation to repay.

- (a) **Obligation of repayment in general.**
  - (1) A borrower is obligated to repay the full amount of a Direct Loan, including the principal balance, fees, any collection costs charged under [§ 685.202(e)](/cfr/34/685.202.md?p=e), and any interest not subsidized by the Secretary, unless the borrower is relieved of the obligation to repay as provided in this part.
  - (2) The borrower's repayment of a Direct Loan may also be subject to the deferment provisions in [§ 685.204](/cfr/34/685.204.md), the forbearance provisions in [§ 685.205](/cfr/34/685.205.md), the discharge provisions in [§ 685.212](/cfr/34/685.212.md), and the loan forgiveness provisions in §§ [685.217](/cfr/34/685.217.md) and [685.219](/cfr/34/685.219.md).
  - (3) A borrower's first payment on a Direct Loan is due within 60 days of the beginning date of the repayment period as determined in accordance with paragraph [(b)](#b), [(c)](#c), [(d)](#d), or [(e)](#e) of this section.
- (b) **Direct Subsidized Loan repayment.**
  - (1) During the period in which a borrower is enrolled at an eligible school on at least a half-time basis, the borrower is in an “in-school” period and is not required to make payments on a Direct Subsidized Loan unless—
    - (i) The loan entered repayment before the in-school period began; and
    - (ii) The borrower has not been granted a deferment under [§ 685.204(b)](/cfr/34/685.204.md?p=b).
  - (2)
    - (i) When a borrower ceases to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins, unless the grace period has been previously exhausted.
    - (ii)
      - (A) Any borrower who is a member of a reserve component of the Armed Forces named in [section 10101](/usc/10/10101.md) of title 10, United States Code and is called or ordered to active duty for a period of more than 30 days is entitled to have the active duty period excluded from the six-month grace period. The excluded period includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any single excluded period may not exceed 3 years.
      - (B) Any borrower who is in a grace period when called or ordered to active duty as specified in [paragraph (b)(2)(ii)(A)](#b-2-ii-A) of this section is entitled to a full six-month grace period upon completion of the excluded period.
    - (iii) During a grace period, the borrower is not required to make any principal payments on a Direct Subsidized Loan.
  - (3)
    - (i) A borrower is not obligated to pay interest on a Direct Subsidized Loan during periods when the borrower is enrolled at an eligible school on at least a half-time basis unless the borrower is required to make payments on the loan during those periods under [paragraph (b)(1)](#b-1) of this section.
    - (ii) Except as provided in [paragraph (b)(3)(iii)](#b-3-iii) of this section, a borrower is not obligated to pay interest on a Direct Subsidized Loan during grace periods.
    - (iii) In the case of a Direct Subsidized Loan for which the first disbursement is made on or after July 1, 2012 and before July 1, 2014, a borrower is responsible for the interest that accrues during the grace period.
  - (4) **The repayment period for a Direct Subsidized Loan begins the day after the grace period ends.** A borrower is obligated to repay the loan under [paragraph (a)](#a) of this section during the repayment period.
- (c) **Direct Unsubsidized Loan repayment.**
  - (1) During the period in which a borrower is enrolled at an eligible school on at least a half-time basis, the borrower is in an “in-school” period and is not required to make payments of principal on a Direct Unsubsidized Loan unless—
    - (i) The loan entered repayment before the in-school period began; and
    - (ii) The borrower has not been granted a deferment under [§ 685.204](/cfr/34/685.204.md).
  - (2)
    - (i) When a borrower ceases to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins, unless the grace period has been previously exhausted.
    - (ii)
      - (A) Any borrower who is a member of a reserve component of the Armed Forces named in [section 10101](/usc/10/10101.md) of title 10, United States Code and is called or ordered to active duty for a period of more than 30 days is entitled to have the active duty period excluded from the six-month grace period. The excluded period includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any single excluded period may not exceed 3 years.
      - (B) Any borrower who is in a grace period when called or ordered to active duty as specified in [paragraph (c)(2)(ii)(A)](#c-2-ii-A) of this section is entitled to a full six-month grace period upon completion of the excluded period.
    - (iii) During a grace period, the borrower is not required to make any principal payments on a Direct Unsubsidized Loan.
  - (3) A borrower is responsible for the interest that accrues on a Direct Unsubsidized Loan during in-school and grace periods. Interest begins to accrue on the day the first installment is disbursed. Interest that accrues may be capitalized or paid by the borrower.
  - (4) **The repayment period for a Direct Unsubsidized Loan begins the day after the grace period ends.** A borrower is obligated to repay the loan under [paragraph (a)](#a) of this section during the repayment period.
- (d) **Direct PLUS Loan repayment.** The repayment period for a Direct PLUS Loan begins on the day the loan is fully disbursed. Interest begins to accrue on the day the first installment is disbursed. A borrower is obligated to repay the loan under [paragraph (a)](#a) of this section during the repayment period.
- (e) **Direct Consolidation Loan repayment.**
  - (1) Except as provided in paragraphs [(e)(2)](#e-2) and [(e)(3)](#e-3) of this section, the repayment period for a Direct Consolidation Loan begins and interest begins to accrue on the day the loan is made. The borrower is obligated to repay the loan under [paragraph (a)](#a) of this section during the repayment period.
  - (2) In the case of a borrower whose consolidation application was received before July 1, 2006, a borrower who obtains a Direct Subsidized Consolidation Loan during an in-school period will be subject to the repayment provisions in [paragraph (b)](#b) of this section.
  - (3) In the case of a borrower whose consolidation application was received before July 1, 2006, a borrower who obtains a Direct Unsubsidized Consolidation Loan during an in-school period will be subject to the repayment provisions in [paragraph (c)](#c) of this section.
- (f) **Determining the date on which the grace period begins for a borrower in a correspondence program.** For a borrower of a Direct Subsidized or Direct Unsubsidized Loan who is a correspondence student, the grace period specified in paragraphs [(b)(2)](#b-2) and [(c)(2)](#c-2) of this section begins on the earliest of—
  - (1) The day after the borrower completes the program;
  - (2) The day after withdrawal as determined pursuant to [34 CFR 668.22](/cfr/34/668.22.md); or
  - (3) 60 days following the last day for completing the program as established by the school.

## Notes

### Amendments

[59 FR 61690, Dec. 1, 1994, as amended at 64 FR 58968, Nov. 1, 1999; 68 FR 75430, Dec. 31, 2003; 71 FR 45712, Aug. 9, 2006; 78 FR 65832, Nov. 1, 2013]

### Authority

Authority: 20 U.S.C. 1087a—1087j. Subpart A also issued under U.S.C. 1087e(a). Subpart B also issued under U.S.C 1078, 1078-3, 1087(e), 1087e(a)(2), 1087e(a), 1087e(a)(3), 1087e(b), 1087e(d), 1087e(d)(1), 1087e(f), 1087e(g), 1087(m)(1)(A), 1091(a), 1092(d)(1), 1098e(a)(2), 1098e(a)(3), 1098h(a)(2). Subpart C also issued under U.S.C 1087a.

### Source

Source: 59 FR 61690, Dec. 1, 1994, unless otherwise noted.

### Amendments

[59 FR 61690, Dec. 1, 1994, as amended at 64 FR 58968, Nov. 1, 1999; 68 FR 75430, Dec. 31, 2003; 71 FR 45712, Aug. 9, 2006; 78 FR 65832, Nov. 1, 2013]