If you're one of the 43 million Americans with federal student loans, you know there's no one-size-fits-all approach to repayment. There are, in fact, more than half a dozen different repayment plans, each with various ins and outs depending on the type of loan and the amount borrowed.
Here's an overview to help you understand the options and figure out what might be best for you.
Your repayment plan determines how much your monthly payment will be, how long it takes to pay off your debt in full, and how much interest you'll accrue over time. Each has a different payment structure and eligibility requirements. While standard repayment plans are designed to help you pay off your debt within a certain time frame, for instance, income-driven plans stretch out your repayment period but allow for more room in your budget by pegging your payment to your salary.
Here's a rough breakdown of the repayment plans available to students with federal student loan debt.
Before selecting or altering your repayment plan, take time to get organized and and weigh your options. Your loan servicer or a financial advisor can help you understand each plan and come to a decision.
Here are a few pointers to help you parse the details of each repayment plan.
And don't forget to factor in your long-term goals, like whether you plan on seeking a high-paying job or going to graduate school. That way, your repayment plan will align with your financial situation, even when and if it changes.
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