Federal Student Loans Payment Options

August 31, 2011

Federal Student Loans Payment

There are many federal student loans payment methods that you can use that you can use that work best to your specific situation. Being that we are talking about federal student loans payment, good chances are that you just graduated, if this is the case, a big congrats! There are basic methods as well as newly established methods in which it can make it easier for you to make payments and avoid default. The 6 different ways are discussed below.

Federal Student Loans


Federal Student Loans Payment - 6 Different Options

  1. Standard Federal Student Loans Payment – This option allows one to pay over the course of what is usually 10 years, and payments can start as low as 50 dollars. This plan usually has payments stay the same over the course of the repayment period until the loan is fully paid off.
  2. Extended Federal Student Loans Payment – This method allows a student who may be low on cash to extend their repayment period from the basic standard 10 year program to anywhere from 12 to 30 years. Being that many do this because of a shortage of money, monthly payments have been as low as 5 dollars.
  3. Graduated Federal Student Loans Payment – Option three allows one to gradually increase their payments, usually every 2 years, where it starts out low and works its way up higher and higher each two years. This is a great option for those who either don’t have a job or have a low paying job right out of college, but as the years go by will advance in their job and get better pay.
  4. Income Based Federal Student Loans Payment – This method of repayment is a lot of what is sounds like, being that your payment are based off what you earn, which is usually 15 percent of your income. Like the extended payment plan, payments can be as low as 5 dollars a month, and are adjusted whenever you wither make more money or less money.
  5. Income Sensitive Federal Student Loans Payment – This option is only availble for direct student loans. This plan is very similiar to the income based option and is based of of 4 to 25 percent of your income and your monthly payment must be at least equal to your interest payment. This plan is available to direct student loan holder for up to 5 years and must be applied for each year. Being that payments are usually lower than normal, yoru repayment period will be extended with this option, around 12 to 30 years.
  6. Income Contigent Federal Student Loans Payment – This last option is only for FEEL loans and has a maximum repayment period of 25 years. This federal student loans repayment option is for those who have low income jobs or are participating in forgiveness programs which usually have low income. The monthly payment is factored either by up to 20 percent of your income or the amount in which it would take you to pay off your loan in 12 years.
  7. Student Loan Forgiveness – This federal student loans payment option is an excellent way to get your debt wiped out by a big percentage or completely. This option is available in public service jobs for many different careers as well as in community serivce like Americorps, VISTA or Peace Corps. These programs either pay a percentage or your loan off each year of service which is about 15 percent and is usually found in community serice, or they pay the rest of your loan off after 10 years of working in a public service job.

Conclusion to Federal Student Loans Payment

Now that you know the different options as far as federal student loans payment options go, you can now figure out which one will work best for you. Although you may start out by paying low, you can always change it in the future when you start earning money, which in the beginning will take off a lot of stress, and as you earn more money you will be able to pay it off faster. Hopefully this federal student loans payment information was exactly what you needed and great luck on getting the best one for you.


Category: Federal Student Loans Payment, Student Loan Database

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