Subscribe

Which Student Loan Repayment Options Work for You?

Student Loan DebtThe student loan process can be tricky and difficult to understand. Students often overlook the process from the beginning of college until graduation, never realizing the impact of the loans until payment become due six months after graduation. The advisement sessions on the FAFSA website become quick-click answer sessions as you electronically sign documents and come face-to-face with your repayment options. Those options seem foreign, and the sudden decision needed to move on with your life sets up the way you will make payments for the foreseeable future. You likely do not know what employment you will have or which plan is right for you. Below, we have explained the repayment options for Federal student loans so that you may make an educated choice.

Standard Repayment Plan

This option gives you the quickest route to paying off your student debt. As a result, you will pay less on interest for your loans. Your payments will be a fixed amount that will repay the debt completely over ten years (30 years for Consolidation Loans). All borrowers are eligible, but it may not be for everyone. In order be successful through this plan, you should have a career lined up that will allow you to make enough money to make the payments while ensuring you have enough money to sustain your lifestyle without defaulting on the loan.

 

Graduated Repayment Plan

This plan works similarly to the Standard Repayment Plan, but with a few changes. You will be able to pay off your student debt over ten years, but the payment will begin in smaller increments. After a period of time, usually two years, your payments will increase in amount. This means that your final payments will be much larger than the final payments on the Standard Repayment Plan. This option is available for all borrowers, but you should have a career lined up that promises periodic advancement. This also may help if you are building your life after school. You will be able to buy purchase furniture and other supplies before getting into higher payments.

 

Extended Repayment Plan

This option works similarly to the previous two, but repayment can occur over a period of time up to twenty-five years. The payments can be either fixed or graduated. The downside will be the buildup of interest. You will be paying more overall and burdened for a longer period of time. In order to uses this option for FFEL or Direct Loans, you will need to have accrued over $30,000 in loans. This would be a good plan for borrowers who spent a longer time in school or took out more in loans. It prevents payments from becoming so overwhelming that you cannot afford to live.

 

Revised Pay As You Earn Repayment Plan (REPAYE)

This plan bases payments off of income. Your monthly payments will be 10% of discretionary income. This means that they take into account rent, money for food, and other necessities when determining your income each year. Your remaining balance will also be forgiven if you do not repay the full amount after twenty-five years. This is a great option if you are unaware of what your income will be six months after graduation or if you plan on participating in the Public Service Loan Forgiveness (PSLF) program.

 

Pay As You Earn Repayment Plan (PAYE)

            This option works very similar to REPAYE. Your maximum monthly payments will be 10% of monthly income, but they may never exceed what you would pay under the Standard Repayment Plan. You must be a new borrower on or after October 1, 2007 or have received a disbursement on or after October 1, 2011. Your outstanding balance may be forgiven after twenty years. It also works great with PSLF.

Income-Based Repayment Plan (IBR)

            This option is available to borrowers that have a high debt relative to their income. Your payments will be 10% or 15% of your discretionary income, but they will never exceed what you would pay on the Standard Repayment Plan. Any outstanding balance will be forgiven after twenty or twenty-five years. This is another great option to use in conjunction with PSLF.

Income-Contingent Repayment Plan (ICR)

            This option differs from the IBR in several ways. For starters, it does not cover FFEL loans. Your payments will be 20% of discretionary income or what payments would be on a repayment plan over twelve years, whichever is lower. In addition, your payments can be higher than if you were on the Standard Repayment Plan. You will also have to pay income taxes on your payments, but your outstanding debt will be forgiven after twenty-five years. This option would be available to borrowers who do not meet the standards of the debt-to-income ratio for other income-based plans. It also qualifies for PSLF.

 

Income-Sensitive Repayment Plan

            This option only covers Stafford and FFEL loans. Payments are based on monthly income, but repayment must be complete in fifteen years. The formula for determining payments varies from lender to lender. This plan would be great for those who would like an income-based plan, but would like to pay off their debt relatively quickly.

The best option for you to pay off your student loans is dependent on your situation and the size of the loan. Before you decide on a plan, visit https://studentaid.ed.gov/sa/repay-loans/understand/plans#estimator. They have more information on each plan, a calculator to help determine the right pan for you, and access to FAFSA resources. Make sure you know what loans you have and the best options to pay them off.

 

The Best Self Help Gurus
In the world today, it is easy to come across scammers looking to take advantage of people in their weakest moments. The realm of self-help is no different. In fact, it can be much worse. Self-help scammers apply abstract concepts so that unsuspecting people will fork...
Best Advice for Seeking Employment
Your career and life depend on you taking the time to learn all that you can about earning gainful employment. You cannot get a job without finding the right approach that will open up opportunities. Keep reading if you wish to learn more. Speak with...
Car Loans Approved Today!
Drivers will be excited to hear that the cost of a vehicle has started a downward plunge making it even easier to get the car loans you have always wanted. According to predictions by GasBuddy, the average price for a gallon of gasoline is set to fall...
5 Ways to Keep Your House During A Market Crash
Anyone paying attention to the housing market in the Los Angeles area knows that home prices have been at record highs. National Mortgage News suggests that this could be a housing bubble about to burst, and a decline in home prices and an increase in mortgage...
Social Security Disability Benefit Application Help
 There are several advantages to applying for Social Security Benefits online. There is no need for an appointment and it will definitely save you time. Visitng your local Social Security Office can be very time consuming and frustrating. Read the...
5 Strategies to Save Money on a Shoestring Budget
 If you are one of the many people who live on a tight budget, you may feel the stress of your situation on a daily basis. Even a seemingly small issue that arises and has reasonable expenses can throw your budget off track. Reducing your costs is a great...
Unpaid Wages Recovery Guide
If you worked for it, then you should get all upaid wages. Everyday can be a struggle and still come up on the short end of the stick. That is why you may be frustrated when you are not paid the money you are owed. Fortunately, there are many steps that you can take...
Increasing Literacy in Children
Increasing Literacy in Children Literacy is important. This is a fact that cannot be stressed enough. Often, arts and literature are tossed to the side to make way for additional funding in other areas, but learning to read lays the foundation for further education...
Inexpensive Public School Alternatives
Sending kids to the public school a few blocks away is a simple task for some families. However, not all parents wish to follow this route. They may have concerns about the safety of the public school in the neighborhood, or they may want a different type of education...
Finding Employment with Job Searches
Finding Employment with Job Searches Sometimes, life hits Americans hard. With ups and downs in the economy, it may be difficult to maintain consistent employment over a long period of time. Fortunately, there are options to help find a new job or career. In the...
Should You Consolidate Student Loans?
Should You Consolidate Student Loans? In order to make it through the years of school, students take on a lot of debt from various loans. Sometimes, these loans come from private lenders with higher interest rates and fewer protection. Most loans, however, are funded...
Social Security Benefits & Retirement
Though all Americans look forward to the day when they can kick back in a lawn chair and spend time working in their flower gardens, retirement comes with many burdens. A fixed income or access to a 401(k) may not be enough to supplement the lifestyle many seniors are...
Are Discount Stores Really A Bargain?
It seems like dollar stores and other various discount stores are becoming a common retailer in most areas. Can these discount stores really offer you a bargain or do they just sell poor quality items? In my opinion, there are plenty of great bargains to be found in...
Section 8 Housing | Where Do I Start?
Ok, what exactly is section 8 housing? Section 8 housing is also known as the Housing Choice Voucher Program. It is very fortunate here in the USA that housing assistance exists for low-income families, elderly, disabled and mentally challenged. The...
How to Save Money on Your Kids Dental Bills
Your family budget might not extend as far as it used to. Still, you want your children to have healthy teeth and inexpensive kids dental bills. Learn how to save money on your kids dental.  Like Clean Teeth? Try the Dollar Brush!   Courtesy of Fox News Health...
Save Money When Grocery Shopping
 It is a good idea to be aware of the amount of money that we spend on items when we go grocery shopping on a regular basis. When times are tough, it is this knowledge that can help us to survive on less income than usual, which can help in a big way if we...
Which Protection Is Best?
Keep Your Information Safe! Makes A Great Christmas Present! Credit card numbers are sacred these days. We’d never give them out to a stranger because credit card fraud and stolen identities are never more than one mistake away. But what if I told you that somebody...
4 Challenging Discussions (And How To Have Them)
It's not always easy to practice open and honest communication, especially with your family. Unfortunately, that lack of communication can have serious consequences. If you're having a hard time finding the courage to approach your family about an issue...
Lifeline Assistance Program
 There is now a program out there that can even help with your cell phone. The special government program called Lifeline Assistance that offers a free phone and minutes to those who qualify. Getting on the list is not very hard, but there are a few things...
Accepting Failure | Achieve Success
Everybody has a setback every once in a while, but it doesn’t mean that there is anything wrong with you. In fact, accepting failure can be a great opportunity to learn your own limitations and boundaries, then push through them, and provide you with a...
Family Picnic

Enter Your Email for Best Results

Due to the overwhelming response, please enter your name and email to ensure the proper search results.

You Are On Your Way!

Family Picnic

Enter Your Email to Receive New Assistance Updates

Due to the overwhelming response, please enter your name and email to ensure proper results.

Thank You! You will now receive the latest assistance updates!

Family Picnic

Enter Your Email for Best Results

Due to the overwhelming response, please enter your name and email to ensure the proper search results.

You Are On Your Way!

Pin It on Pinterest

Share This