Student Loan Repayment Plans

Student loan repayment can be accomplished via any one of a number of different repayment plans. The loan repayment plan that goes with your loan will depend on a number of different factors such as the total loan amount and your personal needs. The standard student loan repayment will allow you to pay a fix monthly payment. The loan term cannot exceed 10 years, but it can be shorter and the minimum monthly payment will be $50.00

Extended Loan Repayment

This extended plan works like the standard loan repayment plan, with the major difference being the time period of the loan. The loan period can be anywhere between 12 and 30 years.

Graduated Loan Repayment

With the graduated student loan repayment, the loan repayment term is between 12 and 30 years, but your payments will start off low, and will then subsequently increase each year. Under this repayment plan, the monthly payment can never be less than half of the amount the standard loan payment would be, nor can it ever be more than 1 ½ times the standard loan repayment amount. Additionally, the minimum loan payment must be at least the interest that accrues, as well as a minimum of $25.00

Income Contingent Loan Repayment

Student loan repayment under this plan will factor in the borrowers income, and the total monthly debt that they have. The monthly payment will be readjusted every year. The term for this loan repayment can be up to as many as 25 years. Payments are a minimum of $5.00 per month and the plan is only available to those who borrow directly. At the 25 years maturity, any balance that remains will be charged off. Under the law, this charge off is treated as taxable income to the borrower.

Income Based Loan Repayment

Income based student loan repayment was introduced as part of the College Cost Reduction Act of 2007. This program works very much like the income contingent repayment plan except with this one, the monthly payments are capped using a lower percentage and a narrower definition of discretionary income. This program is available to both direct borrowers as well as FFEL programs.

Student loan repayment can be made for all federal education loans with no early repayment penalty. Though you will have to check with each individual lender for details pertaining to their policies, plans can generally be changed once each year. Be sure that you are able to meet the loan terms when you do change.


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