A fixed payment that remains the same during the repayment period of 10 years for Stafford loans. Consolidation loans are typically longer. If you do not request an option, your loan servicer will automatically give you the standard repayment option, which allows you to pay the least amount of interest.
New borrowers with an outstanding loan balance of more than $30,000 in FFELP or DL loans may extend their repayment term for up to 25 years.
Smaller loan repayments in the early years with larger payments over time. The assumption is that your income increases over time.
Repayments that change with your income, so that your repayment installments fluctuate as your income rises and falls.
Payments are adjusted annually based on your household income, family size and total loan debt. This option is not available to PLUS loan payments. The repayment period is a maximum of 25 years.
Loan payments are capped at 15 percent of your income that exceeds 150 percent of the federal poverty guideline for your family size. You can choose to participate in this payment plan for up to 25 years.
To help debt-burdened physicians and improve care in medically underserved areas, the federal government and most states have developed service-connected loan repayment programs. The programs generally require you to practice primary care or a needed specialty in a designated underserved area. Through these programs, the government will pay a predetermined amount of your student loan debt for each year you meet specified conditions.
Allows you to combine several loans into a single new loan with a more manageable repayment schedule. Some consolidation programs will let you include your spouse’s educational loans. These loan repayments may be extended beyond the normal 10-year period, depending on the amount borrowed. Additional loans can be added to a federal consolidation loan within 180 days after making the consolidation loan.
Loan servicers may lower your interest rate if you make a certain number of payments on time. They may offer an additional interest rate reduction if you have your loan payment automatically deducted from a checking or savings account.
Budgeting for loan payments requires a detailed review of your payment schedule to determine the amount of your monthly payments. Since some of your loans will have variable interest rates, select an average rate for your calculations. You can estimate your monthly loan payment(s) by using these student loan calculators:
mappingyourfuture.org,
finaid.org/calculators and
IBRinfo.org.
EXAMPLE: Roughly 30 percent of your gross pay is deducted for federal, state and social security taxes. If you are earning $46,000 annually, you would be taking home about $2,683 per month [$46,000 (less 30% taxes)/12]. If you borrowed $100,000 at an average interest rate of 6.8 percent for 10 years of repayment, your monthly payments would be almost $1,151 per month. That leaves you only $1,532 per month to live on, which is about the same as your school budget permits while you are in medical school.