Loan tips & repayment optionsWhether you have just graduated, are taking a break from school, or have already started repaying your student loans, these tips can help you keep your student loan debt under control.
This means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you're having trouble finding a job or keeping up with your payments, there's important information here for you, too.
Student loan tips for recent graduates
Know your loans
Know your grace period
Stay in touch with your lender
Pick the right repayment option
Prepay if you can
Determine what your monthly loan payments may be
Repayment optionsRepayment options offered by the federal government when it is time to repay your student loan.
Standard repayment plan
Payments are a fixed amount that ensures your loans are paid within 10 years.
Graduated repayment plan
Payments are lower at first and then increase, usually every two years, and are for an amount that will ensure your loans are paid off within 10 years.
Extended repayment plan
Income-based repayment plan
Your monthly payments will be either 10 or 15 percent of your discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan. Payments are recalculated each year and are based on your updated income and family size. Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 or 25 years, depending on when you received your first loans. You may have to pay income tax on any loan amount that is forgiven.
Pay as you earn repayment plan
Income-contingent repayment plan
Payments are calculated each year and are based on your income, family size, and the total amount of your direct loans. Your monthly payments will be the lesser of 20 percent of discretionary income or the amount paid on a repayment plan with a fixed payment over 12 years, adjusted according to income. If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven. You may have to pay income tax on the loan amount that is forgiven.
Income-sensitive repayment plan
Your monthly payment is based on your annual income, but your loan will be paid in full within 15 years.