BAKER COLLEGE
 
 
Financial Aid

Loan Repayment Options

Making the right choice about your repayment options can give you an advantage in meeting your future loan debt obligations. A brief description of the repayment choices for both the Federal Family Education Loan Program (FFELP) and the Federal Direct Loan Program (FDLP) are listed below. For more detailed information, please refer to your school, lender, servicer or visit any of the lender or servicer web sites listed throughout these pages.   

Standard Repayment:

This is the most common repayment plan for borrowers in both FFELP and FDLP.

It allows for equal monthly installments with a minimum payment of $50.00 (arrangements to have monthly payment lower than minimum, depending on loan balance owed, must be arranged by contacting lender or servicer for approval) for up to 10 years. This plan is appropriate for borrowers with loan balances of $10,000 or less or for borrowers with higher loan balances and sufficient income to make monthly payments.

The Standard Repayment Plan minimizes the total interest costs over the life of the loan.

Graduated Repayment:

Available for both FFELP and FDLP borrowers.

This repayment plan offers the borrower the opportunity to make reduced payments during the first two-to-four years of repayment when income resources tend to be lower. It is important to note that the payment increases substantially after the first few years. Appealing to borrowers with at least $10,000 in loans, those who have other financial obligations requiring attention, or whose incomes start low but increase steadily.

In this plan the interest costs paid by the borrower are higher than the Standard Repayment option.

Extended Repayment Plan:

Available to first time FFELP borrowers on or after October 7, 1998 with loan debts in excess of $30,000.

Loan repayment has a fixed annual or graduated repayment amount paid over an extended period of time, with a maximum of 25 years.

Long-term interest costs will rise substantially for the borrower using this plan.

Extended Repayment Plan:

This plan is available for FDLP borrowers.

Appropriate for borrowers with loan balances of $10,000 or more or for borrowers who are facing monetary difficulties and want to reduce their monthly payments.

Reduces monthly payments, providing long-term budget relief, although long-term interest costs will rise substantially.

Income-Sensitive Repayment Plan:

This plan is available to FFELP borrowers.

Attractive to borrowers with loan balances of $10,000 or more, those at risk of defaulting, or those anticipating initially low incomes which are expected to increase as time passes.

This option allows the payment to be based on the eligible borrower's income and adjusted annually. By reducing early payments and extending the repayment period, long-term interest costs will increase.

Income-Contingent Repayment Plan:

This plan is available to FDLP Stafford and Consolidation loan borrowers only.

Appealing to borrowers with loan balances of $10,000 or more, those at risk of defaulting, or those anticipating initially low incomes which are expected to increase as time passes.

Payments rise and fall with income changes, but borrowers with low or modest incomes and large loan balances may experience a major negative amortization and incur extensive interest expenses.

Loan Consolidation:

Available to both FFELP and FDLP borrowers.

Appealing to borrowers with large educational debts because it offers the flexibility to combine multiple educational loans into a single loan.

For further information regarding this process access the loan consolidation section.

PLUS Loan Borrowers: (parent borrowers)

Under the FFELP programs the PLUS loan borrower may choose from standard, graduated, extended, income-sensitive and consolidation repayment options.

Under the FDLP program the PLUS loan borrower may only choose from standard, graduated, extended or consolidation repayment options.

Additional Information:

To provide assistance in calculating your monthly payments, you can visit various other web sites which offer sample repayment schedules. Below are listed two sites which offer this service.

USA Group
This site offers information about educational loan programs offered under the Federal Family Education Loan Program (FFELP).

Direct Loans
This page offers information about educational loan programs offered through the William D. Ford Federal Direct Loan Program

If you have further questions regarding your repayment options, contact your lender or servicer. Possible contacts:

If you are a Baker College student and have questions, please feel free to contact our Student Loan Advisors at (810) 766-4285 or (810) 766-4213 or toll free (888) 690-7912. You can also e-mail them at: loans@baker.edu.



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