Having Trouble Repaying Your Student Loan? |
| REPAYMENT OPTIONS - Several flexible repayment options are available under the guaranteed loan program to better assist borrowers in repaying their student loans. Under the Federal Family Education Loan Program (FFELP), the following options are available: | |
| Standard Repayment - is the most common repayment option, which allows for equal monthly installments with a minimum installment of $50, not to exceed a ten-year repayment period. | |
| Graduated Repayment allows for lower initial payments with a predictable schedule. This is usually appealing for borrowers whose incomes start low but increase steadily. | |
| Extended Repayment Plan allows first time borrowers on or after October 7, 1998 with loans totaling $30,000 or more to have a fixed annual or graduated repayment amount paid over an extended period of time, not to exceed 25 years. | |
| Income-Sensitive Repayment allows monthly payments from 4% to 25% of gross monthly income. Repayment terms can be adjusted annually to adapt to income changes. Reducing early payments and extending the repayment period will increase interest costs. | |
| Loan Consolidation is appealing for borrowers with large educational debts because it offers the flexibility to combine multiple loans into a single loan, with up to a 30-year repayment period. | |
| Be aware that these repayment options are flexible and you have the choice of making changes as your circumstance alters. REMEMBER the holder of your loan is your partner and is available to work with you to maintain a good repayment history, and avoid the risk of defaulting. | |
| BORROWER BENEFITS are offered throughout the country by many student loan secondary markets, lenders and guarantors. They offer programs that lower loan costs for eligible students borrowing under the guaranteed student loan program. These benefits take such forms as: | |
| |
| Check with the holder of your loan to see which borrower benefits they have to offer. | |
| LOAN FORGIVENESS is intended to encourage individuals to enter the teaching, childcare professions and to perform national and community service. Under these programs, the Department of Education repays a portion of the guaranteed student loan obligation that was incurred by a borrower during the borrower's last two years of undergraduate education--if that borrower worked in those professions or performed that service. Currently, only the teaching profession in critical areas is funded by Congress, but loan forgiveness for the other programs will be implemented when funding is made available. | |
