Student Loan Replayments Plans

Student Loan Repayment Plans

 


Making the right choice about a repayment plan can give a borrower an advantage in meeting their future loan debt obligations. A borrower may choose one of the following repayment plans to repay their student loan(s). If a borrower does not choose a repayment plan, the loan holder will automatically place a borrower in the standard repayment plan. A borrower can change repayment plans at any time after they begin repaying their loan(s).


 

Standard Repayment

This is the plan a borrower will have when he/she enters repayment, unless requested otherwise. It's also the fastest and most cost-effective.  For most borrowers, this plan results in the lowest total interest paid because the repayment period is shorter than it would be under any of the other repayment plans.

Your financial situation

The borrower can afford the monthly payments.

Eligible loans

Direct Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • PLUS Consolidation
  • Consolidation that includes a Parent PLUS Loan

FFELP Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • Consolidation that includes a Parent PLUS

Monthly payments

  • Minimum monthly payments start at $50.
  • Payments of principal and interest remain the same throughout repayment (10 years max).
  • Maximum repayment period is 10 years.
  • Small changes may occur for variable interest rate loans or due to capitalized interest.
  • Repayment plan calculator

Things to consider

If a borrower can't afford the payments, choose another plan that fits his/her budget.

How to apply

No need to apply since the borrower automatically starts repayment on this plan.

 

Graduated Repayment

The Graduated Repayment Plan may be beneficial if the borrower’s income is low when they leave school but is likely to steadily increase.  Under this plan, payments start out low and then increases every two years.  The minimum payment equals the amount of interest that accrues monthly for up to the maximum repayment period.

Your financial situation

As the borrower, a smaller monthly payment would be better right now.

Eligible loans

Direct Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • PLUS Consolidation
  • Consolidation that includes a Parent PLUS Loan

FFELP Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • Consolidation that includes a Parent PLUS Loan

Monthly payments

  • Initially lower and then increase later in repayment.
  • Amount varies throughout repayment (every two years).
  • Maximum repayment period is 10 years.
  • Repayment plan calculator

Things to consider

  • Assumes that the borrower's income will grow enough to afford increasing payments.
  • Initial payments mainly cover interest, not the principal balance.
  • A borrower will pay a greater amount of interest than with the standard repayment plan.

How to apply

Contact the holder of the loan(s).

 

25-Year Extended Repayment

If a borrower has more than $30,000 in outstanding FFELP (Federal Family Education Loan Program) Loans or more than $30,000 in outstanding FDLP (Federal Direct Loan Program) Loans, this plan allows him/her to extend the repayment term past the standard 10 years.

Your financial situation

As the borrower, there is a lot of debt, but none of the other payment plans work.

Eligible loans

Direct Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • PLUS Consolidation
  • Consolidation that includes a Parent PLUS Loan

FFELP Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • Consolidation that includes a Parent PLUS Loan

Monthly payments

  • Borrower may choose to make fixed or graduated monthly payments.
  • Minimum payment of $50 for Fixed Extended.
  • Maximum repayment period is 25 years.
  • Repayment plan calculator

Things to consider

  • Only available if the loans were first disbursed on/after October 7, 1998, and the current balance meets the above-mentioned criteria.

    For example: If you have $35,000 in outstanding FFELP Loans and $10,000 in FDLP Loans, you can choose extended repayment for the FFELP Loans, but not the FDLP Loans.
  • Longer repayment period means higher interest costs compared to a standard (level) or graduated repayment plan.

How to apply

Contact the holder of the loan(s).

 

Income-Based Repayment (IBR)

Under this plan, the required monthly payment is capped at an amount intended to be affordable based on the borrower’s income and family size. If the borrower is married, the spouse's student loan debt and adjusted gross income are also taken into consideration.

Your financial situation

If a borrower has little or no income, mounds of student loan debt and is stressed about the monthly payments.

Eligible loans

Direct Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS

The following Direct Loans are NOT eligible for this payment plan: Parent PLUS, PLUS Consolidation and Consolidation that includes a Parent PLUS Loan.

FFELP Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS

The following FFELP Loans are NOT eligible for this payment plan: Parent PLUS and Consolidation that includes a Parent PLUS Loan.

Monthly payments

  • Based on the borrower's eligible federal student loan debt, adjusted gross income (individually or with the spouse, as applicable), family size and the state of residence.
  • May be less than the interest that accrues each month.
  • Maximum repayment period is 25 years.
  • Are recalculated annually (visit the IBR Calculator on Student Aid on the Web).

Things to consider

  • Requires a borrower to qualify by proving he/she has a partial financial hardship and submitting documentation annually.
  • May extend the repayment period past the standard 10 years (25 years maximum).
  • Offers loan forgiveness after 25 years once a borrower makes the equivalent of 25 years of qualifying monthly payments.
  • Learn more about IBR.

How to apply

Contact the holder of the loan(s).

 

Income Contingent Repayment (ICR) Direct Loans Only

Income Contingent Replayment, or ICR, calculates the monthly payments based on the borrower's adjusted gross income (and your spouse's income, if you're married), family size and the total amount of his/her eligible loan debt.  As the borrower's income rises and falls, so does the monthly payments.

Your financial situation

If a borrower is worried about the monthly payments and need some flexibility.

Eligible loans

Direct Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Consolidation that includes a Parent PLUS Loan

The following Direct Loans are NOT eligible for this payment plan: Parent PLUS and PLUS Consolidation.

FFELP Loans

FFELP Loans are NOT eligible for this payment plan.

Monthly payments

  • Based on the borrower's adjusted gross income (and the spouse's income, if married), family size and the total amount of the eligible loan debt.
  • Will initially be at least the interest that accrues each month until the official payment amount is calculated.
  • Are recalculated annually (visit the ICR Calculator on Student Aid on the Web).

Things to consider

  • Requires a borrower to provide documentation annually.
  • Maximum repayment period is 25 years.
  • After 25 years, any remaining balance on the loan will be forgiven, but the borrower may have to pay taxes on the amount forgiven.
  • Learn more about ICR.

How to apply

Contact the holder of the loan(s).

 

Income Sensitive Repayment FFEL Loans only

The monthly payments are based on the borrower's total monthly gross income and a borrower must re-apply annually. As your income increases or decreases, so do your payments. The maximum repayment preiod is 10 years.

Your financial situation

If a borrower is worried about the monthly payments you need some flexibility and you only have FFEL loans.

Eligible loans

Direct Loans

Direct Loans are NOT eligible for this payment plan.

FFELP Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • Consolidation that includes a Parent PLUS Loan

Monthly payments

  • Based on your monthly gross income.
  • Must at least cover the interest that accrues each month.
  • Maximum repayment period is 10 years (except consolidation loans).

Things to consider

  • A borrower must re-apply annually.
  • More expensive in the long run because the borrower repays the principal at a slower rate.

How to apply

Contact the holder of the loan(s).

 

Alternative Repayment Plans Direct Loans Only

An alternative repayment plan may be used when the terms and conditions of other repayment plans are not adequate to accommodate a borrower’s circumstances.

Your financial situation

The borrower must provide evidence of the exceptional circumstances.

Eligible loans

Direct Loans

  • Stafford Subsidized
  • Stafford Unsubsidized
  • Consolidation
  • Student PLUS
  • Parent PLUS
  • PLUS Consolitation
  • Consolidation that includes a Parent PLUS Loan

FFELP Loans - not eligible for these types of repayment plans

Monthly payments

  • Minimum monthly payments start at $5.
  • Maximum repayment period is 30 years.
  • Payments cannot vary by more than 3x the smallest payment.

Types of Alternative Repayment Plans

Alternative Fixed Payment

Alternative Fixed Term

Alternative Graduated

Alternative Negative Ammortization

How to apply

Need to discuss with hold of the loan(s).

 

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