What Types of Student Loan Repayment Plans Are There?

When a student gets a student loan, there are several different types of student loan repayment plans that you could get in order to make the repayment of the loan a lot more manageable for you. There is the Standard repayment plan that is the most economical plan of them all. This plan allows the student to have low monthly payments, allows them to change the repayment agreement as circumstances in your life change, and allow you to pay off the loan without any type of penalties that you would have to pay.

There is the extended student loan repayment plan which makes the overall loan amount more than other repayment plans but this plan allows you to have very low monthly payments and allows you to take up to 25 years in order to pay for the loan. Even though it may take longer to pay for the loan, you won’t have to deal with a high loan payment every month. There is the graduated repayment loan plan allows the student to start off with very low monthly payments and graduate up to the normal amount of monthly payments that they should be.

There is also the Income-Contingent student loan repayment plan allows the student to pay back their loan on a monthly basis by the amount of income they made that year. Each year it is calculated towards the income that they received and the monthly income is adjusted accordingly. There is the income sensitive repayment plan which allows the student to pay monthly payments per their income, but they get to choose what percentage of their income they want to pay. This percentage can be anywhere between four percent and 25 percent. They can do this yearly and pick the lower amount if they are having financial difficulty.

Then there is the income based student loan repayment plan which allows student loan payments to be capped at a more reasonable percentage of their income, will cancel any balance after 25 years if payments have been made accordingly, and will be available in all major federal loan programs. This is a new plan that was created in September of 2007 due to the fact that college costs have gotten out of control for students today and this is a way for the Department of Education to take it under control.

Simon Harris writes about Student Loan Repayment [http://www.student-loan-repayment.org/].

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