Student Loan Information and Terms
Student Loan and Repayment Information
When it comes time to repay your federal student loan, there are several ways to go about extinguishing your debt. Examples of five Federal loan repayment plans include:
Standard
The standard repayment plan is a basic program that features payments no less than $50 per month. Payments are fixed and paid monthly until the debt is paid off. This can take up to 10 years. Repaying a student loan through the standard plan is the fastest repayment plan offered to borrowers. It does, however, come with a high monthly payment in comparison to the other plans.
Extended
Student loan borrowers can request a longer payoff period through the extended repayment plan. This plan also features payments of $50 or more. The payoff period is extend and ranges from 12 to 30 years. Because of this, the plan features smaller monthly payments.
Graduated
The graduated repayment plan offers borrowers payment amounts that slowly increase over time. Initial payments usually equal interest for the month or half of a normal monthly payment. While the payments start out low, they eventually increase to 1.5 times the amount of standard plan payments. The length of the plan depends on the amount owed on the student loan.
Income-Contingent
A more flexible plan, the income-contingent repayment plan (ICR) can be used on Direct student loans. Payments are calculated annually based on the borrower’s adjusted gross income (AGI), and family size versus the loan total. In order to participate in the ICR, the borrower must sign a release form allowing the lender to review each year’s taxes as to determine the payment amount.
Income-Sensitive
The final repayment plan is the income-sensitive program. This plan mimics the ICR plan but applies to FFEL loans instead of Direct student loans.
Aside from Federal loans and consolidation, there are many private student loans available to college students just starting college. Private student loans usually require a cosigner. Learn more about the private student loan presented on iStudentLoan.