Student Loan Repayment Options and What They Really Mean

 Below explains each Student Loan Repayment Plan as described by the Department of Education and my explanation. Be sure to look at the bottom of the page for tips and resources on student loan information!

Repayment Standard

Repayment Graduated

Repayment Extended

Repayment Income Based

Click on image for full size.

Repayment Income Contingent

Repayment Income Sensitive

Repayment Pay As Earn

Other Helpful Tips:

  • Feel free to choose the standard repayment plan or another repayment plan you feel comfortable with and qualify for. The good news is that if you can’t afford your monthly payments, simply call your loan provider and they will lower your monthly payments. This, of course, means that if you continue to pay low monthly payments toward your loan you will pay more overall due to interest. Lowering your payments should be an EMERGENCY ONLY situation.
  • Don’t be afraid to call your loan provider and discuss each option with them so that YOU get the best payment plan that works for your lifestyle.
  • REMEMBER: Whatever payment plan you choose and how low your set monthly payment is, you are always able to pay higher monthly payments to decrease the amount of time and money (toward interest) that you will have to pay.
  • For example: If you choose a plan that fits your monthly budget, but expands your payment terms across 30 years, don’t hesitate to choose that plan. As your income increases and you perfect your budget, you can make higher monthly payments, decreasing your total loan terms and total amount paid.
  • If you pay extra, be sure to pay toward your principal balance insuring that your total balance will decrease resulting in an overall decrease in your total interest paid.

The ultimate goal is to pay extra toward your student loans monthly and pay them off as quickly as possible!

Don’t let this be you…

Repayment Pic

Resources:

https://studentaid.ed.gov/repay-loans/understand/plans

https://www.mygreatlakes.org/borrower/fiq/repayment-step2decide.html#

For more information on starting a personal budget, check out our Getting Started tab at the top of the page.

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Sam

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