Student loan repayment plan options

Your federal student loans offer several repayment plans that provide the flexibility you need, especially when starting off in the work force. Choose the plan that best fits your needs.

Standard Plan

If you can afford to pay your monthly payments, then this plan is right for you. The standard plan requires fixed monthly payments over 10 years. With this plan, you will pay off your loan the fastest and acquire the least amount of interest.

Graduated Plan

This repayment plan is for borrowers who may not be able to handle higher monthly payments but are confident that their income will steadily increase. Payments start low and will increase every two years. However you’ll pay more interest over time compared to the standard plan.

Extended Plan

Borrowers with a total loan balance of over $30,000 are eligible for the extended plan. This plan requires smaller monthly payments over 25 years. This plan provides more time to pay off your loan, but the accruing interesting will cost you more in the long run.

Pay As You Earn Plan (PAYE)

With the PAYE plan, your monthly payments will be limited to 10 percent of your discretionary income, and readjusted each year based on income and family size. To qualify for this plan, borrowers must have a partial financial hardship.

Income-Based Repayment (IBR)

This plan allows monthly payments based on your income. As you earn more, you pay more. Monthly payments are limited to 15 percent of your discretionary income. Similar to the PAYE plan, borrowers must qualify for partial financial hardship to be eligible.

Income-Contingent Plan

Payments are based on adjusted gross income, family size and the amount of your loans. Your monthly payment will be the lesser of the amount based on a 12-year repayment plan that’s multiplied by an income percentage factor or 20 percent of your monthly discretionary income. This plan is ideal for borrowers who want to keep low monthly payments but don’t qualify for PAYE or IBR based on their partial financial hardship status.

Income-Sensitive Plan

As an alternative to the income-contingent plan, this plan requires monthly payments based on annual income. This plan is designed for low-income borrowers who want flexibility with their monthly payments.

Consolidate your loans!

Instead of making payments to multiple loan providers, consider loan consolidation. This free service allows you to combine your existing student loans and pay them back in single monthly payments with one fixed interest rate.

Travis Credit Union members who are starting their first job and need financial advice have access to free confidential financial counseling through our BALANCE Financial Fitness Program. Visit BALANCE Financial Fitness for more details.

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