Options for Student Debt Repayment
Introduction
There are so many queries related to student debt repayment options. How much will the payment be for each debt? How long it will take to pay off the entire debt? What if you miss a single payment? Get all the answers to these questions from debt management experts.
Debt Problems
Questions about repayment may haunt you even before you apply for the first student loan. Surprisingly enough, most of the time, students whose grace period is about to end are often also not clear about repayment provisions. That’s why debt management can act as a quick guide to help students understand the repayment options and alternatives available to them.
Student Debt Repayment Options
Are you facing debt problems because the standard repayment plan is too much to handle? Well, not to worry, debt management programs can make you aware of many alternate repayment plans that can help you lower your monthly payment. For a fixed interest rate student loan, the monthly debt pay-off remains the same throughout the settlement period.
The following chart clearly explains federal student loan repayment time periods:
| Student Debt – Repayment Term |
| $10,500 – $19,999 – 15 years |
| $20,000 – $39,999 – 20 years |
| $40,000 – $59,999 – 25 years |
| $60,000 and up – 30 years |
Grace Period
There is no grace period for federal student loans. But in the case that the debt consolidation payment is delayed, the government will pay interest for your subsidized loan. You will only be paying the interest for the unsubsidized loan.
Here is a brief overview of some alternate repayment options.
Extended Repayment
The standard student loan repayment period is ten years, but if you wish, you can extend the standard loan repayment period to up to 25 years. This will help you lower your monthly debt payment. However, this repayment option is available only to those students whose outstanding federal loan amount is more than $30,000 and who received their first loan on or after October 7, 1998.
Graduated Repayment
This repayment facilitates starting with a lower monthly payment. Every two years the payment amount will be revised for the duration of the settlement term. However, make sure the revised payment is at least be enough to cover the monthly interest or it will augment your debt problems.
Income Sensitive Repayment
You can settle on a monthly payment plan based on your monthly income under this repayment option. Debt management experts suggest opting for a monthly payment amount that at least covers your monthly interest. To qualify for this plan, you need to submit income documents to the government loan organization. The repayment grant is subject to re-qualification every year.
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