Managing Your Debt
Repayment Options

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Repayment Plans

• The longer you take to repay your loan, the more interest accrues (builds up) and the more you will ultimately pay.
• You may prepay all or part of your loan at any time and, in so doing, may greatly reduce your overall obligation.
• Repayment options can change. You may request a change in the payment options. Talk to your lender about other plans that might be available.
• Keep track of your loans with a loan log.

Your options include a standard (fixed) repayment schedule, a graduated repayment schedule, an income-sensitive repayment schedule, and an extended repayment schedule.

• Standard (fixed) Repayment: This schedule calls for equal payments throughout the entire repayment period. Payment amounts may be adjusted each year to reflect changes in the variable interest rates. If your loan holder does not make annual adjustments to your variable interest rate, you may still owe on your loan at the end of the maximum 10-year repayment period. In this case, the lender will offer to extend your repayment period up to three years instead of requiring immediate payment of the balance.
• Graduated Repayment: For this plan, payments are scheduled to change (usually increase) in fixed increments over the life of the loan. Monthly payment amounts are specified when the schedule is established. As with the standard repayment schedule, payment amounts may be adjusted to reflect annual changes to the variable interest rate. If rate changes result in the loan not being repaid within the maximum 10-year repayment period, the lender may extend the deadline for up to three years with this plan.
• Income-Sensitive Repayment: This schedule requires the lender to adjust your payment schedule each year, based upon a percentage of your expected monthly gross income. Payments may increase or decrease, depending on your financial circumstances. In cases where decreased installments result in the loan not being repaid within the maximum 10-year repayment period, the lender may extend the deadline for up to five years. Interest continues to accrue on the loan. As with any payment plan that reduces payments or extends the repayment period, you can expect to pay more interest over time than you would under a standard repayment plan.
• Extended Repayment: A borrower who has outstanding FFELP loans exceeding $30,000 and who is a first-time borrower on or after October 7, 1998, can select an extended repayment period. Under this plan, borrowers may pay under a fixed or a graduated plan and must repay the loan within 25 years.