Now you are ready to graduate and soon it will be time to start paying back your student loan. TSTC's money management staff have provided valuable information below on the different types of repayment plans. To make a payment on your student loan, please visit http://www.myfedloan.org.
If you have questions about your student loans or need support, our specialists are ready to offer information and other resources. Please call WISS toll free (800)257-4757 or visit www.wiss.info.
Student Loan Repayment Plans
- Standard Repayment. Under this plan you will pay a fixed monthly amount for a loan term of up to 10 years. Depending on the amount of the loan, the loan term may be shorter than 10 years. There is a $50 minimum monthly payment.
- Extended Repayment. This plan is like standard repayment, but allows a loan term of 12 to 30 years, depending on the total amount borrowed. Stretching out the payments over a longer term reduces the size of each payment, but increases the total amount repaid over the lifetime of the loan.
- Graduated Repayment. Unlike the standard and extended repayment plans, this plan starts off with lower payments, which gradually increase every two years. The loan term is 12 to 30 years, depending on the total amount borrowed. The monthly payment can be no less than 50% and no more than 150% of the monthly payment under the standard repayment plan. The monthly payment must be at least the interest that accrues, and must also be at least $25.
- Income-Contingent Repayment. Payments under the income contingent repayment plan are based on the borrower's income and the total amount of debt. Monthly payments are adjusted each year as the borrower's income changes. The loan term is up to 25 years. At the end of 25 years, any remaining balance on the loan will be discharged. The write-off of the remaining balance at the end of 25 years is taxable under current law. There is a $5 minimum monthly payment. Income Contingent Repayment is available only for Direct Loan borrowers.
- Income-Sensitive Repayment. As an alternative to income contingent repayment, FFELP lenders offer borrowers income-sensitive repayment, which pegs the monthly payments to a percentage of gross monthly income. The loan term is 10 years
- Income-Based Repayment. The College Cost Reduction and Access Act of 2007 introduced income-based repayment as a more generous alternative to income-sensitive and income-contingent repayment, starting on July 1, 2009. Unlike income-contingent repayment and income-sensitive repayment, it is available in both the Direct Loan and FFEL programs. Income-based repayment is like income contingent repayment, but caps the monthly payments at a lower percentage of a narrower definition of discretionary income.
If you are continuing your education or have not found full-time employment, you may be eligible for a deferment. To find out more, click here.
See a list of all your federal loans at the National Student Loan Data System https://www.nslds.ed.gov/nslds_SA/. Find each loan's "Current Servicer" contact information on the National Student Loan Data System.
For more repayment information, visit:
Payment plans http://www.myfedloan.org/billing-payment/payment-plans/
College 101 http://money.cnn.com/101/college-101/student-loan-payment.moneymag/
Repaying http://www.consumerfinance.gov/paying-for-college/repay-student-debt/#Question-1, be sure to select “Federal.”