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.

 

Ways to Face Fears | Succeed
All of us have a hard time with failure, and it can often lead us to feeling insecure about ourselves. It can even begin to compound our fears and leave us feeling nervous and anxious in unfamiliar situations. We want to be able to predict and control everything that...
Natural Healing Options for Arthritis
Arthritis comes in various forms, but it's always painful. The typical medical approach is to take some sort of pain medication (usually non-steroidal anti-inflammatory drugs, or NASDs) that might result in various side effects, such as stomach pain. Thankfully, there...
5 Strategies to Reduce Stress and Strengthen Family Relationships
 Stress is everywhere. You feel stressed at work and on your commute, and maybe even your home, the place that is supposed to be your sanctuary. When you arrive home from your job, you're met by bills that need to be paid, children that need to be fed and...
Coupon Tips That Can Save You Money
Everyone loves a great deal and your luck will get better when you find coupons for your favorite items. There are a lot of great locations to discover coupons these days, including the Internet, newspapers and flyers. These are tips and techniques on how...
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...
Things You Need to Know About Section 8 Assistance
Things You Need to Know About Section 8 Housing Some families might find a safe, decent and affordable housing as a big challenge to tackle. Majority of regions in the United States do not have rent control laws in place. Therefore some renters find affording a...
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...
Home Improvement Grants
 Is your home desperate for repairs? Are you at your financial limits, broke...flat broke? Have you ever wondered how it would feel to have the government help you be able to afford these critical repairs? Help is possible through new home improvement...
The Most Common Reasons for Debt
 High debt balances can create significant stress, negatively impact not only your future, but it can also impact your health. It can prevent you from enjoying the quality of life that you otherwise may enjoy without the burden of debt payments. While...
How to Find Bargains at Flea Markets
I love to spend hours looking at flea markets for different items. Different vendors set up their products in a central location so that consumers can spend their time walking around and see the new and used items available for sale. You never know what you will come...
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...
Tips for Insurance Discounts
Home insurance and automobile insurance might be must-haves, but it doesn’t have to cost you an arm and a leg to have the appropriate coverages. There are things you can do to get discounts on your homeowners insurance and automobile insurance. Here are...
The AHCA Impact on Medicare & Medicaid
The Impact on Medicare & Medicaid The repeal and replace legislation concerning the Affordable Care Act (ACA), or Obamacare, seems complicated for many consumers. Though it will likely see changes as it is debated in the Senate, the American Healthcare Act (AHCA)...
Best and Worst Student Loan Services
Best and Worst Student Loan Services This is the time of year when hundreds of thousands of Americans begin to prepare for their first semester in college. They begin to seek out the items that will sustain them during dorm life. Parents spend money on new sheets, hot...
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...
How To Get A Work-From-Home Job and Earn $275 Per Day
How To Get A Work-From-Home Job & Earn $275 Per Day There are many advantages to working from home. There's no expensive and time-consuming commute, for example, and it's also possible to work from home while juggling other responsibilities. However, while many...
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...
Budget Tips for Today’s Family
If you are in charge of creating the family budget, chances are, you’ve had the unfortunate experience of having a brilliant budget plan that isn’t executed well. This happens to many families and couples, and with a little attitude tweaking, you can solicit the help...
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...
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...

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