Edfinancial=20 Services > Tools >=20 Take = Control=20 of Your Student Loan Debt > So what are = my=20 options?=20

Student Loan Repayment Options for Federal Student Loans

If you need some help making your student loan payments each month, = consider=20 your options.

A deferment allows = you to=20 temporarily delay repayment of your student loans for a specified period = of=20 time. There are many different situations that would make a person = eligible to defer their payments. Some of the most commonly used=20 deferments cover unemployment, enrollment in school, or economic = hardship.

A forbearance is an = option=20 available to people who do not qualify for a deferment. If you are = financially unable to make your student loan payments, you may be = eligible for a=20 temporary suspension or reduction of payments.

The big difference between deferment and forbearance is that = borrowers with=20 subsidized student loans on deferment have the accrued interest = paid for=20 them by the federal government. The borrower is responsible for = the=20 interest that accrues on unsubsidized loans on deferment and for the = interest=20 that accrues on both subsidized and unsubsidized loans on = forbearance. If=20 the interest is not paid, it will be capitalized (added to the principal = balance) at the end of the deferment or forbearance period.

You can use our Form = Selector to=20 determine whether a deferment or a forbearance best meets your = needs.

Various repayment plans are also available to help you manage your = student=20 loan debt:

Standard Repayment allows you to make equal monthly = payments=20 during the entire term of the loan and results in the least amount of = interest=20 cost to the borrower.

Here's an example of a $30,000 loan on a standard repayment plan:

Loan Principal: $30,000
Interest Rate: 6.8%=20 Fixed
Term: 10 years, or 120 months
Monthly = Payment*:=20 $347.27
Total Interest Paid: $11,324.04

Graduated Repayment lowers your monthly payment = amount as=20 you enter the job market after college. Payments increase every = two years=20 as you are better able to manage your money and get settled in a = job.

Here's an example of that same $30,000 loan on a graduated repayment=20 plan:

Loan Principal: $30,000
Interest Rate: 6.8%=20 Fixed
Term: 10 years, or 120 months
Initial Monthly=20 Payment*: $245.75
Final Monthly Payment*: $509.58 =
Total=20 Interest Paid: $13,380.41

Extended Repayment is available for new borrowers = with their=20 first loan disbursement on or after October 7, 1998, who accumulate = student loan=20 debt greater than $30,000. The repayment term for these loans may = be=20 extended up to 25 years.

Finally, here's an example of a $30,000 loan on an extended repayment = plan:

Loan Principal: $30,000
Interest Rate: 6.8%=20 Fixed
Term: 25 years, or 300 months
Monthly = Payment*:=20 $208.22
Total Interest Paid: $32,462.41

Notice the total amount of interest paid on the extended repayment = plan is=20 significantly more than the total interest paid on the standard = repayment=20 plan. The more time you take to pay off your loans, the more = interest you=20 will pay over the life of the loan.

Another option, Income Sensitive Repayment, lowers = your=20 monthly payment amount by basing your payments on a percentage of your = income=20 (from 4% to 25%), allowing you to extend your repayment period up to = fifteen=20 years. Individual repayment schedules will vary based on the = borrower's=20 income and loan balance.

You can use your own loan information in our Repayme= nt=20 Calculator to get a better idea of how much your payments and = interest cost=20 will be.

Side-by-Side Comparison

Repayment = Plan Original Balance Interest Rate Repayment Term Initial Monthly Payment* Final Monthly Payment* Total Interest Paid Additional Interest = Paid Standard $30,000 6.8% 120 $347.27 $347.27 $11,324.04 $0.00 Graduated $30,000 6.8% 120 $245.75 $509.58 $13,380.41 $2,056.37 Extended $30,000 6.8% 300 $208.22 $208.22 $32,462.41 $21,138.37

*All examples are approximate and payment amounts may vary for = individual=20 borrowers. Some borrowers may have older variable rate loans as = well as=20 fixed rate loans, depending upon disbursement date. Visit our Interest = Rates=20 page for more information on interest rates and disbursement dates.

We can help! Contact=20 us if you have questions.

E-mail Link =20 Save to del.icio.us

Student Loan Repayment Options for Federal Student Loans

If you need some help making your student loan payments each month, = consider=20 your options.

Various repayment plans are also available to help you manage your = student=20 loan debt:

Side-by-Side Comparison

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