Student Loan Repayment Programs

Written by Mark Sanfilippo
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When you finally graduate from college and you're faced with the proposition of paying off perhaps tens of thousands of dollars of debt, you may wish that you could just go back to school. The six month grace period that most student loans offer is usually just too short to allow one to get the kind of salary that would effectively pay back this large a debt. Luckily there are some fairly flexible repayment plans available.

Obviously, if you can afford the monthly payments on your student loan, then it's in your best interest to pay off the debt as soon as possible. This can save you thousands of dollars of accrued interest in the long run. Not all of us have that kind of cash flow when we're fresh out of college.

Graduated repayment plans are a great option for effectively extending your grace period. These types of repayment plans allow you to make very low, generally interest only, monthly payments for a set length of time before you have to start making payments on the principle. You can find graduated repayment plans generally in two or four year increments.

Income Sensitive Plans Are Flexible

Perhaps the most flexible of the student loan repayment plans is so-called income sensitive plans. These plans adjust annually to help your monthly payment fit your monthly income. Income sensitive plans are an extreme solution. They are basically only for those who are in serious danger of going into default. The thing to remember with income sensitive plans is that you continue to accrue interest charges. Your lowered payment may not be covering the interest that you're accruing and this means that you're adding to the principle.


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