University of Houston-Victoria

Department with Video

Student Loan Repayment Options

Federal student loans must be repaid to the lender or servicers of the borrowed loan funds over a period of 10 years unless other arrangements are made with the lender. Students can set up several types of repayment schedules to prevent loans from becoming delinquent or into default status.

A full overview of the Direct Loan program repayment plans are located on studentaid.ed.gov.

Standard Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans
  • all Consolidation Loans (Direct or FFEL)

Graduated Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans
  • all Consolidation Loans (Direct or FFEL)

Extended Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans
  • all Consolidation Loans (Direct or FFEL)

Revised Pay As You Earn Repayment  Plan (REPAYE)

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS loans made to students
  • Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

Pay As You Earn Repayment Plan (PAYE)

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS loans made to students
  • Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents

Income-Based Repayment Plan (IBR)

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans made to students
  • Consolidation Loans  (Direct or FFEL) that do not include  Direct or FFEL PLUS loans made to parents

Income-Contingent Repayment Plan (ICR)

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS Loans made to students
  • Direct Consolidation Loans

Income-Sensitive Repayment Plan

  • Subsidized and Unsubsidized Federal Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans

Monthly Repayment Example:

If you borrow $20,000 in student loans during your college career, your monthly payment based on 8.25% interest rate would be approximately:

  • Standard Repayment: $245.40 per month.
  • Graduated Repayment: $137.60 per month.
  • Extended Repayment: $157.60 per month.
  • Income-Sensitive Repayment: $137.60 per month.
  • Income-Based Repayment: 15% of discretionary income
  • The samples above are subject to change.

Consolidation

Students can refinance his/her eligible Federal Loans. The interest rate is determined by the weighted average of all loans included in the refinance. Advantages of consolidating include a fixed interest rate for the term of the loan and possibly a longer repayment period.

Deferment and Forbearance Options

Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your federal student loan payments. Postponing or reducing your payments may help you avoid default. Student Loan Servicers have several deferment options available, including a forbearance option. Log onto the TG website or https://studentloans.gov for information on situations when you may apply for deferment or forbearance and how to request those options.

Loan Forgiveness

The cancellation of all or some portion of your remaining federal student loan balance. If your loan is forgiven, you are no longer responsible for repaying that remaining portion of the loan. A review of the loan forgiveness program is located on studentaid.ed.gov.

Also, there are loan forgiveness programs for teachers intended to encourage individuals to enter and continue in the teaching profession.

Additional Resources

Here are some additional informative links:

Salt Money: https://www.saltmoney.org/index.html

Debt Payoff Calculator: http://www.thesimpledollar.com/debt-payoff-calculator/