There are several repayment options for federal loans. If you find your monthly payment does not fit within your monthly budget, contact your lender or servicer to discuss your options. Once you have selected the right repayment plan for you, signing up for auto-debit from your checking account may save you money by lowering your interest rate.
Standard Repayment Plan is also known as Level Repayment Schedule. Under this plan you pay a fixed monthly amount for up to 10 years.
Graduated Repayment Plan starts off with small monthly payments and gradually increases the payment every two years. The monthly payment may be no less than 50% and no more than 150% of the monthly payment under the standard repayment plan. The monthly payment amount may not be less than the accrued interest.
Extended Repayment Plan allows a loan term up to 25 years, depending on the total amount borrowed if you qualify. This option will give you a lower monthly payment, but will increase the total amount borrowed. You must have a balance of $30,000 or more and loans must have been disbursed on or after October 7, 1998.
Income Sensitive Repayment Plan gives flexibility in monthly loan payment, but can be the most expensive. This plan must be applied for annually and your monthly payment will be based on your gross monthly income and your student loan debt.
Income Based Repayment caps the monthly payments at a percentage of your discretionary income, which is based on your income, family size, and total amount borrowed. Your monthly payment amount is adjusted annually, based on changes in annual income and family size. Income-based repayment caps monthly payments at 15% of your monthly discretionary income, where discretionary income is the difference between adjusted gross income and 150% of the federal poverty line that corresponds to your family size and the state in which you reside. There is no minimum monthly payment.
Loan Repayment/Forgiveness Programs give you the opportunity to pay down loan balances in exchange for service. Please check the following websites for additional information.
All borrowers have certain rights and responsibilities in repaying their student loans. If for some reason you need to postpone payment, it is important that you contact your lender or servicer immediately to discuss your options.