Lowering Your Monthly Payment
Student loans are automatically placed on a Standard Level Repayment plan at the time they enter repayment. Level plans are based on a fixed payment over 120 terms (months). In the event that you are unable to repay your student loans on a Standard Level repayment plan, the Department of Education offers several repayment options to accommodate your individual circumstances; however, these options are based on student loan types and other eligibility criteria. You will need to contact your servicer to find out which options you qualify for. Federal Student Aid also offers a comprehensive repayment plan guide for further information regarding all repayment options.
Income-Driven Repayment Plans
One of the best options for lowering your monthly payment is an Income-Driven Repayment plan, which may qualify you for a monthly payment as low as $0.00 a month depending on your student loan balance, household income and family size. Income Driven Repayment plans must be recertified annually. If you successfully recertify each year, you may qualify for forgiveness for any balance remaining after making the requisite number of qualifying payments of the specific plan. We’ve provided a list of all the available Income Driven Repayment Plans below:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
You can learn more about all of these options and apply online at StudentLoans.gov.
Graduated Repayment Plan
If you are struggling to make full payments, but you expect to be able to make larger payments in the future, a Graduated Repayment Plan may be right for you! On a Graduated Repayment Plan, your starting monthly payment will cover mostly interest and some principal. It will then increase every two years until the account is paid in full, which will happen within approximately 10 years depending on the amount of postponement time used. This plan generally works best for recent graduates who are still looking for a job in their field of study. To discuss your eligibility for this plan, please contact one of our Loan Specialists.
Extended Repayment Plan
In order to qualify for an Extended Repayment plan, you must have a balance of at least $30,000.00. On an extended plan, your monthly payment will generally be lower than payments made under the Standard and Graduated Repayment Plans. Payments will be based on either a fixed, or a graduated amount. The maximum repayment term on an extended plan is 25 years. To discuss your eligibility for this plan, please contact one of our Loan Specialists.
Please be aware that not all these plans will give you the lowest monthly payment based on your current situation. To make it easy, Federal Student Aid provides a five step repayment questionnaire to determine the best repayment option for you. However, if you’re still unsure what option to apply for, we recommend that you reach out to one of our Loan Specialists. You can also calculate your estimated monthly payment on any of these plans using the Repayment Estimator.