Here is a partial listing of repayment options offered to borrowers:
Stafford Loan (lender-based loan) and Direct Loan
Standard (Level) Repayment - divides your principal and interest into equal monthly payments (usually 10 years), with a minimum payment amount starting at $50 per month.
Graduated Repayment - entails interest-only payments the first 2 years, after which your payment amount increases every 2 years. Initially the payment amount is less than with level repayment, but over time becomes significantly greater.
Extended Repayment - lengthens repayment up to 25 years for either level or graduated repayment plans.
Income-sensitive Repayment - requires minimum monthly payments of ‘interest only’ for up to 5 years as based upon your income and loan amount. You must provide income documentation annually. Following the income-sensitive repayment period, you will ultimately return to a level or graduated repayment schedule.
Income-Based Repayment (IBR) - caps monthly federal loan payments at a level based on your income and family size. Benefits within this repayment plan also include loan forgiveness for those remaining in the program for 20 or more years (see http://studentaid.ed.gov/repay-loans/understand/plans/income-based for details); 10 years if you work in government, non-profit, or public service.
Pay As You Earn (PAYE) - If your student loan debt is high relative to your income,
you may qualify for the a new loan repayment plan to be offered starting on December 21, 2012.
Most Direct Loans (excluding Direct PLUS Loans for parents and Direct Consolidation Loans that
repaid PLUS Loans for parents) are eligible for PAYE.
The new repayment plan, which shares many similarities with the current Income-Based Repayment (IBR) Program,
will accept enrollees who were new borrowers after October 1, 2007 and took out a loan on or after October 1, 2011.
Under PAYE, eligible borrowers of federal student loans will have their monthly loan payments capped at 10 percent of
discretionary income and loan forgiveness after 20 years of payments. For more information,
visit the studentaid.ed.gov website by clicking here.
For further information on Direct Loan repayment plans, go to the Federal Student Aid website.
Consult your Stafford Loan lender or servicer concerning further details and/or options, change of address or payment problems.
Perkins Loan (campus-based loan)
Standard Repayment - fixed quarterly (once every 3 months) payment for up to 10 years, with a minimum payment amount starting at $120 a quarter
Consult the campus/university or the billing servicer for the campus/university where you received the Perkins Loan for further details and/or options. Borrowers receiving Perkins Loans through UCLA should contact the UCLA Collections Office or UCLA’s billing servicer, Affiliated Computer Services (ACS), concerning further details and/or options, change of address or payment problems.
Repayment Options Made Easy
To assist federal student loan borrowers facing repayment, a new web-based tool to help borrowers navigate the complexity of student loan repayment choices has been created. The online, interactive, information-only tool is geared to help student borrowers find their best repayment option in five steps or less. It also provides information on the ‘next steps’ to take. You can use the online tool without logging in to the site.
Access this new tool by clicking the “Find out your student loan repayment options here” link on the StudentLoans.gov homepage; or go there directly at StudentLoans.gov/Repay in one click.
What is Income-Based Repayment (IBR)?
Income-Based Repayment (IBR) caps monthly federal loan payments at an affordable level, based on your income and family size. Benefits within this repayment plan also include loan forgiveness for those remaining in the program for 20 or more years (see http://studentaid.ed.gov/repay-loans/understand/plans/income-based for details); 10 years if you work in government, non-profit, or public service. If you owe more on your federal student loans than you earn in a year, you may benefit from IBR. The lower your income, the lower your monthly payment will be; and in some cases, as low as $0. IBR is available for almost all federal loans made by any lender, whether for college or graduate school.
If you work in a government, nonprofit, or other public service job, you could have your remaining student loan debt forgiven after just 10 years of IBR (or certain other payments). Your loans have to be in the federal Direct Loan Program to qualify; the 10 years of IBR need not be consecutive. You must make a total of 120 payments while working full-time for a public or nonprofit employer, starting on or after October 1, 2007.
For a more encompassing view of the IBR Plan click here.
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Introduction to Repayment
Knowing ‘the basics’ before making that first payment
Understanding the many choices offered
Deferments / Forbearance / Cancellations
Making use of benefits
Determining the advantages and disadvantages