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» University Resources
» University Loans
» Loan General Terms
» Plans of Repayment
Plans of Repayment
There are many ways to repay your loans but here, you will find six which are the better.
The repayments available for student loans are:
- Standard Repayments
- Extended Repayments
- Graduated Repayments
- Income Contingent Repayments
- Income Sensitive Repayments
- Income Based Repayments
- Standard Repayments
- Extended Repayments
- Graduated Repayments
- Standard Repayments:
- Monthly amount payments; as minimum $50.
- 10 years of loan term; but according to the borrowed amount could be shorter.
- Extended Repayments:
- Similar to the Standard Repayment plan.
- 12 to 30 years of loan term, according to the borrowed amount.
- It is possible to extend the terms to reduce the amounts, but this aggravates the total amount repaid of the loan.
- Graduate Repayments:
- Totally different to the Standard and Extended repayment plans.
- Start with lower amount payments, and while time pass the amount increases every two years.
- 12 to 30 years of loan term, according to the borrowed amount.
- Monthly payments must be between 50% and 150% of monthly payment the under standard repayments plan.
- The monthly payment must be at least $25.
- Income Contingent Repayments:
- Available for Direct Loan borrowers.
- The amount of the monthly payments is established according to the changes of the borrower incomes.
- The amounts depend on the borrower's income and the total borrowed amount.
- 25 years of loan term, once finished it any remaining balance will be discharged under current law.
- At least, $5 of monthly payments.
- Income Sensitive Repayments:
- Offered for FFELP lenders.
- Monthly payments are a percentage of the monthly income.
- 10 years of loan term.
- Income Based Repayments:
- A better alternative among income-sensitive and income-contingent repayment.
- Available for both, Direct Loan and FFELP programs.
- More similar to income contingent repayments.
- Lower percentage in monthly payments.
In addition, if you want to switch your plan you can do it once a year; but when you have the extended repayment during 26-30 years long, you cannot change to the income contingent repayment.
In order to give more clearance, in the chapter below you will find a comparison among the plans;
| Repayment Plan and Loan Term | Reduction in Monthly Payment | Increase in Total Interest Paid |
| Extended Repayment - 12 years | 12% | 22% (factor of 1.22) |
| Extended Repayment - 15 years | 23% | 57% (factor of 1.57) |
| Extended Repayment - 20 years | 34% | 118% (factor of 2.18) |
| Extended Repayment - 25 years | 40% | 184% (factor of 2.84) |
| Extended Repayment - 30 years | 43% | 254% (factor of 3.54) |
| Graduated Repayment | 50% initial payment 38% average reduction | 89% (factor of 1.89) |
| Income Contigent Repayment (Salary=initial debt, 4% annual raise) | 41% declining to 33% 37% average reduction | 178% (factor of 2.78) |
Back to: Loan General Terms