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.

 

Modern Millionaires Mindset
Here’s A Modern Millionaire Rhetorical Question:   If you have a spare million dollars in your bank account today… How will you spend it? Pay off all your bills and loans? Buy your dream car? Dream house? Give your family a better life? Travel all...
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...
Which Student Loan Repayment Options Work for You?
Which Student Loan Repayment Options Work for You? The 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...
How To Find Good Insurance Companies
 Insurance is a part of life whether you’re looking to protect your life, home, or automobile. All insurance companies are not equal. Working with a good insurance company is just as, if not more, important as having coverage. Here are four things to keep...
Low Income Families and Educational Help
Low Income Families and Educational Help It is a common perception that only the most gifted students are eligible for grants and scholarships to get them through the final phases of their education, and this then gives rise to the popular thought that those residing...
Walmart Owes Money
Wal-Mart is a nationally recognized big box store offering low prices for customers who have everyday needs. The store employs more than 1.2 million people, and many of them are currently in a situation in which they could receive a big payout from the company for...
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...
SNAP (Supplemental Nutrition Assistance Program)
The first nutrition assistance program was started in 1939. These types of programs were developed to help people during strenuous times and financial hardships. The program we know today (SNAP) was first introduced in 1961 as the Food Stamp Act that was...
Social Security Disability Assistance
 Social Security Disability Insurance pays benefits to you and certain members of your family if worked long enough and paid Social Security taxes. Supplemental Security Income pays benefits based on financial need. If you need help and personal guidance...
Rent Assistance and Low Cost Housing
With todays economy fluctuating , many individuals and families are struggling to pay bills in a timely fashion, including their rent. The good news is that there are a variety of options available to anyone who is facing late fees, court dates or even...
You Can Save Money on Your Monthly Bills By Reading These Tips
When you add up the total cost of your monthly utility bills, you may be astounded by how expensive utilities can be. This may be particularly true during peak usage months in the height of summer and in the dead of winter. You and your family...
Is Public Housing An Option for You?
The US Department of Housing and Urban Development (HUD) utilizes several programs to ensure housing for lower-income families. One of these programs is Public Housing. This program was designed to provide decent and safe rental homes for lower-income...
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...
Affordable Housing Problems
On 1st Street in Santa Ana — not far from where authorities recently cleared a tent encampment along the Santa Ana River near Angel Stadium — developer Caleb Roope wants to build nearly 1,000 apartments that will be affordable for low-income seniors and...
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...
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...
The FHA and Home Loans
 The Federal Housing Administration (FHA) insures mortgages on loans provided through FHA-approved lenders. Since its creation in 1934, the FHA has insured tens of millions of homes for families in the United States. These mortgage insurances protect...
Free Cell Phones: Avoid The Trap
Cell phones are becoming very sophisticated with the advancement in the technology. Today the cell phones come with lot of mind-boggling kinds of features on them. Due to the increasing competition between the handset manufacturers and the service providers, lots of...
Best Way to Build Your Credit Rating
In today’s world, credit can be easily destroyed. If you are young and entering the adult world, you may not always understand how to maintain a great credit rating. Often, you do not qualify for a loan or credit card due to having no credit. Lapses in employment or...
The Facts You Need to Know About Payday Cash Advances
If you need money, it can feel as if there is no one to help you. It may feel like you're up a creek without a paddle. Luckily, you can get payday cash advances to help you out. Research all companies that you are considering. Find a lender that fits you...
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 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