Types and Choices
Here is a partial listing of repayment options offered to borrowers:
Stafford Loan (lender-based loan) and Direct Loan
- Standard (Level) Repayment - divides your principal and interest into equal monthly payments (usually 10 years), with a minimum payment amount starting at $50 per month.
- Graduated Repayment - entails interest-only payments the first 2 years, after which your payment amount increases every 2 years. Initially the payment amount is less than with level repayment, but over time becomes significantly greater.
- Extended Repayment - lengthens repayment up to 25 years for either level or graduated repayment plans.
- Income-sensitive Repayment - requires minimum monthly payments of ‘interest only’ for up to 5 years as based upon your income and loan amount. You must provide income documentation annually. Following the income-sensitive repayment period, you will ultimately return to a level or graduated repayment schedule.
- Income-Drivenor Income-Based Repayment (IDR/IBR) - caps monthly federal loan payments at a level based on your income and family size. Benefits within this repayment plan also include loan forgiveness for those remaining in the program for 20 or more years, 10 years if you work in government, non-profit, or public service. The lower your income, the lower your monthly payment will be (visit the Federal Student Aid IDR page for details).
- Pay As You Earn (PAYE) - If your student loan debt is high relative to your income, you may qualify for the a new loan repayment plan to be offered starting on December 21, 2012. Most Direct Loans (excluding Direct PLUS Loans for parents and Direct Consolidation Loans that repaid PLUS Loans for parents) are eligible for PAYE. The new repayment plan, which shares many similarities with the current Income-Based Repayment (IBR) Program, will accept enrollees who were new borrowers after October 1, 2007 and took out a loan on or after October 1, 2011. Under PAYE, eligible borrowers of federal student loans will have their monthly loan payments capped at 10 percent of discretionary income and loan forgiveness after 20 years of payments. Since this is a type of Income-Driven Repayment, you can visit the Federal Student Aid IDR page for more details.
For further information on Direct Loan repayment plans, go to the Federal Student Aid website.
Perkins Loan (campus-based loan)
- Standard Repayment - fixed quarterly (once every 3 months) payment for up to 10 years, with a minimum payment amount starting at $120 a quarter
Consult the campus/university or the billing servicer for the campus/university where you received the Perkins Loan for further details and/or options. Borrowers receiving Perkins Loans through UCLA should contact the UCLA Collections Office or UCLA’s billing servicer, Heartland ECSI , concerning further details and/or options, change of address or payment problems.
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Repayment
Introduction to Repayment
Starting Repayment
Knowing ‘the basics’ before making that first payment
Repayment Plans
Understanding the many choices offered
Deferments / Forbearance / Cancellations
Making use of benefits
Loan Consolidation
Determining the advantages and disadvantages
Dealing with Default
I've Defaulted on Repaying My Federal Student Loans!
The U.S. Department of Education has a time-limited initiative called Fresh Start to help borrowers who find themselves in default on their federal student loans. Get a fresh start with "Fresh Start".