Paying+off+your+Student+Loans

=Paying off Your Student Loans=


 * You must begin paying your loans 6 months after you graduate, drop out, or become a part time student. (of course you can start paying before the 6 months, too.) Your loan servicer will provide information about repayment and will notify you of the date loan repayment begins.
 * There are different kinds of payment repayment plans, some based on the type of loan,

-because of higher interest amount paid back is more || - 25 years || -if unpaid amount is cancelled, you may have to pay taxes || -25 years || -As income increases, so does payment || -10 years ||
 * **Repayment Plan** || **Description** || **Advantages** || **Disadvantages** || **Max Length** ||
 * Standard || -fixed amount paid each month || -low interest || -monthly payment is higher than other plans || -10 years ||
 * Extended || -must have $30,000 or more in Direct Student Loans **or** Federal Family Education Loan || -low monthly payment || -higher interest
 * Graduated || -payment starts out low then increases every 2 years || -good if you expect your salary will slowly increase || -bad if your salary does not increase || -10 years ||
 * Income Based || -based on income || -if repaid for 25 years and meet certain requirments, rest of payments can be canceled || -only if monthly payment is less than monthly in standard plan || -25 years ||
 * Income Contingent || monthly payments will be based on your adjusted gross income, plus your spouse’s income, family income, and the total amount of your loans. Your monthly payment will less than the amount if you repaired your loan in 12 years multiplied by the percentage factor based on your annual income, or 20 percent of your monthly discretionary income || -if loan not paid in 25 years, unpaid amount will be cancelled || -Direct loans only
 * Income Sensitive || monthly loan payment is based on your annual income || As income decreases, so does payment. || -FFEL only


 * 1) **Standard Repayment Plan:** a fixed amount will be paid each month over a span of 10 years. The least monthly payment is $50. Compared to other repayment plans this plan may have the least amount of interest, but the monthly payment is more.
 * 2) **Extended Repayment Plan:** pay a fixed annual amount over 25 years. The monthly payments are smaller, but you will have to pay more in interest. You are eligible for this plan if: you have a direct loan totaling $30,000 or more or you have a Federal Family Education loan totaling $30,000 or more.
 * 3) **Graduated Payment Plan:** payments start out low, then increase every two years. Your monthly payment will never be less than the amount of interest that accrues between payments. Although your monthly payment will gradually increase, no single payment under this plan will be more than three times greater than any other payment.
 * 4) **Income Based Repayment Plan:** monthly payments are based on income and family size. You are eligible if the calculated repayment amount is less than the amount calculated in the Standard Repayment Plan. If you repay under the IBR plan for 25 years and meet other requirements you may have any remaining balance of your loan(s) cancelled. Additionally, if you work in public service and have reduced loan payments through IBR, the remaining balance after ten years in a public service job could be cancelled.
 * 5) **Income Contingent Repayment Plan (direct Student loans only)** monthly payments will be based on your adjusted gross income, plus your spouse’s income, family income, and the total amount of your loans. Your monthly payment will less than the amount if you repaired your loan in 12 years multiplied by the percentage factor based on your annual income, or 20 percent of your monthly discretionary income. Maximum Payment is 25 years. If 25 years has passed and you still have not repaid the loan in full, your loan will be discharged. However, you may have to pay taxes on the discharged amount.
 * 6) **Income-Sensitive Repayment Plan (FFEL****SM** **Loans only)** With an income-sensitive plan, your monthly loan payment is based on your annual income. As your income increases or decreases, so do your payments. The maximum repayment period is 10 years