- Read your promissory note thoroughly to understand your rights and responsibilities.
- Remember a loan has to be repaid.
- Know your payment due date. If this date is not good for you, contact your lender to change it.
- Make your student loan payments on time. If possible, allow your lender to automatically debit your checking account.
- Do not get behind in payments. If you are having trouble with your payments, call your lender to find out your repayment options.
- Always open and read correspondence from your lender and your school. They both want to keep you informed.
- Keep your enrollment status current by contacting your lender immediately if you transfer, withdraw or change your graduation date.
- If transferring to a new school, be sure to complete an in-school deferment.
- Do not overspend. Maintain a budget that includes your student loan payment.
- Always notify your lender if there is a change of address, phone number, or name.
Standard Repayment - The repayment schedule is set for a 10-year term with a minimum monthly payment of $50 depending on the total amount borrowed.
Extended Repayment - This plan provides borrowers with a fixed annual or graduated repayment amount over a period that is not greater than 25 years. To qualify, you must have more than $30,000 in outstanding FFEL Program Federal Direct loans. If you are a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. This plan will lead to more interest paid overall because of the interest that accumulates during the extended repayment period.
Graduated Repayment - This plan allows payments to start out smaller and increase every two years during the repayment schedule. The repayment period is 10 years.
Income Based Repayment (IBR) - This repayment plan (effective as of July 1, 2009) caps the monthly payment at an amount that is intended to be more affordable based on your income and famly size. Click here for more detailed information.
Income Contingent Repayment (ICR) (Direct Loans Only) - Monthly loan payments are calculated annually based on your adjusted gross income, family size, and total amount of Direct Loans. The maximum repayment period is 25 years. After 25 years of repayment, any remaining balance may be discharged. You may have to pay taxes on the amount discharged.
REPAYE - Revised Pay as You Earn Repayment Plan
Monthly payments will be 10% of discretionary income. Maximum repayment period is 25 years.
Income Sensitive Repayment (FFELP Loans Only) - This plan bases the monthly payment on your annual income. The payment amount increases or decreases as your income changes. The maximum repayment period is 15 years.
For More Information
You are automatically assigned the standard repayment plan unless you tell your lender otherwise. Remember that borrowing is simply renting somebody else's money. You must repay your student loan to your lender, according to the repayment schedule, unless you have obtained a deferment, a forbearance or forgiveness. If you fail to make your payments required by the repayment schedule, your loan will go into default. Default is a very serious matter and can seriously affect various areas including borrowing money, job licensure/certification, tax refunds, etc. If you need help or information, ask your lender.
More detailed information on all of these repayment plans is available at Student Aid on the Web.
Deferment & Forbearance
Deferments - You may temporarily postpone your student loan payment if your situation falls into government established categories. Some of the most common deferments include:
- Half-time enrollment at an eligible school or approved graduate fellowship program
- A period of unemployment
- Economic hardship--earning below minimum wage or the poverty level.
There are other situations that may qualify for a deferment. Ask your lender for details.
Forbearance - Your student loan payment may be postponed or reduced if you are willing but temporarily unable to meet your repayment obligations. You can also request forbearance if your debt burden (in federal student loans only) is equal to or greater than 20% of your gross income.