Even the words “student loan” can give feelings of uneasiness. Then add in repayment plans, loan consolidation, and loan forgiveness, and you may head to the internet to figure out your future with your loans.
The first thing you need to figure out is exactly what you pay for your loan and who is handling it. You may even have multiple loans.
Head to https://studentaid.gov. This is a great website where you can get information on federal student aid, managing your loan and repayment forms. If you create an account here, you can find out what your loan is and who is handling the loan. A loan servicer handles the billing and services on a federal student loan. It is where you will find repayment options as well. There are ten loan services through the federal loan program.
There are a few types of repayment plans:
- Standard Repayment Plan:
Payments are at a fixed amount, and you will pay them off within 10 years. It’s 10-30 years for Consolidated Loans. Know that you do usually pay less over time, but it will not qualify you for Public service loan forgiveness if you want to do that.
- Graduated Repayment Plan:
At first, these payments are lower and then increase every two years. This is for those that start to work and can pay more as they stay in the workforce. You can pay these off in ten years or 10-30 with consolidated loans. This is not a qualifying repayment for Public service loan forgiveness.
- Extended Repayment Plan:
If you have more than $30,000 in direct loans, you can have loans with payments that are fixed or grow over time. These usually come with a 25-year repayment plan. This Is also not a qualifying repayment for Public service loan forgiveness.
- Multiple federal student loans:
You can take all of your loans and consolidate them into a direct consolidation loan. That will give you one loan service provider and one loan payment.
- Revised Pay As You Earn Repayment Plan (REPAYE):
This type of loan changes based on your income, family size, and your spouse’s income. Many times if you haven’t repaid your loan within 20 years, your loans will be forgiven. You do have to pay income tax on any forgiven amount, but you can qualify for Public service loan forgiveness.
- Pay As You Earn Repayment Plan (PAYE):
This loan payment is 10% of your monthly income. Payments are recalculated each year. If you are married, your spouse’s income and loan debt is also considered. If you haven’t paid your loan in 20 years, the rest is forgiven. You can qualify for Public Service Loan Forgiveness with this, you will pay income tax on any amount forgiven, and your payment will never be more than a 10-year standard plan repayment.
- There is also an Income-Based Repayment Plan (IBR), Income-Contingent Repayment Plan (ICR), and Income-Sensitive Repayment Plan.
- Perkins Loans:
Perkins Loan repayment plan options are not the same as those for Direct Loan Program or FFEL Program loans. Contact your school for this information.
Refinancing Student Loan Programs:
Here is a list of the top six companies to work with for refinancing your loan.
- credible.com: You can compare rates from multiple lenders and refinance more loans than just your student loan.
- College Ave located at www.collegeavestudentloans.com
- Common Bond
- Splash Financial
- Loan Forgiveness: Loan forgiveness can occur just based on being on a qualifying repayment plan. It usually doesn’t take into account your school or degree. You fill out the loan forgiveness program form, submit it to your lender, and wait for a response.
Different loan forgiveness programs.
Most programs are through the Department of Education, but many are offered through your state or even your employer. Loan forgiveness gets rid of your loans in 5 years or 25 years. You can also pay off loans with repayment assistance programs.
Other Loan Forgiveness programs :
- Public Service Loan Forgiveness (PSLF)
- Attorney Student Loan Forgiveness Program
- Faculty Loan Repayment Program
- Federal Employee Student Loan Repayment Program
- Indian Health Services Loan Repayment Program
- John R. Justice Student Loan Repayment Program
- National Health Service Corps
- National Institutes of Health (NIH) Loan Forgiveness
- NURSE Corps Loan Program
- SEMA Loan Forgiveness Program
- Teacher Loan Forgiveness Program
- USDA Veterinary Medicine Loan Repayment Program
U.S. Military Student Loan Forgiveness Options
- Air Force College Loan Repayment Program
- Army College Loan Repayment Program
- National Guard Student Loan Repayment Program
- Navy Student Loan Repayment Program
- Army Active Duty Health Professions Student Loan Repayment Program
- Navy Health Professions Student Loan Repayment Program
State-Based Student Loan Forgiveness Options
- Employer-Based Student Loan Repayment Assistance Programs
- Volunteering-Based Student Loan Forgiveness Options
- AmeriCorps Education Award
- Sponsor Change (SponsorChange.org)
Student Loan Discharge Options
- Closed School Discharge
- False Certification (Identity Theft) Discharge
- Death Discharge
- Total and Permanent Disability Discharge
- Bankruptcy Discharge
This information on federal aid and loan forgiveness is always changing. Please look at your own financial aid and resources to make the most of your loans.