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Loan Repayment Options
Repayment Options help students that suffer hardship and graduate with high monthly payments in
relation to their income, repay their student loans without going into default.
Many students are not aware of repayment options such as deferment, forbearance, and income-contingent
repayment. Under these options borrowers may choose one of four ways to pay back their student loan.
Repayment Options are as follows:
Standard plan allows you to pay the same amount each month - at least $50 or the interest
that has accrued - with up to 10 years to repay.
Graduated plan, where your payments start out low and then gradually increase, with up to 10 years to repay.
Income-sensitive plan bases the monthly payment on how much the borrower makes and the amount borrowed,
but must cover at least the interest due. This option allows for up to 10 years to repay.
The Extended plan is for new borrowers after October 7, 1998, who have more than $30,000 in
outstanding loans. Repayment under this option can be up to 25 years.
Deferment is the period when a borrower, who meets certain criteria, may suspend loan payments.
Borrowers must apply for deferments on an annual basis. Medical school graduates may qualify
for economic hardship deferments during residency. As the chart below indicates, deferments are
both ‘loan specific’ and ‘borrower specific’. Interest is subsidized during deferment for subsidized
loans (i.e., there is no cost to the borrower) and is not subsidized during deferment of unsubsidized
loans (i.e., interest continues to accrue and must eventually be paid by the borrower).
Deferment Eligibility Chart
|
Stafford
Loans*
|
|
Deferment Conditions
|
Time
Limit
|
Loans
Before 8-15-83
|
Pre
7-1-87
|
New1
Borrower 7-1-87
to 6-30-93
|
New2
Borrower 7-1-93
|
|
In-School: Full Time
|
None
|
|
n
|
n
|
|
|
In-School: Half-Time
|
None
|
|
|
n6
|
n
|
|
Graduate Fellowship
|
None
|
|
n
|
n
|
n
|
|
Rehabilitation Training
|
None
|
|
n
|
n
|
n
|
|
Military or PHS6
|
3
years
|
|
n
|
n
|
|
|
NOAA8
|
3
years
|
|
|
n
|
|
|
Peace Corps, Domestic, Tax Exempt Organization Volunteer
|
3
years
|
|
n
|
n
|
|
|
Teacher Shortage
|
3
years
|
|
|
n
|
|
|
Internship/Residency Training
|
2
years
|
|
n
|
n
|
|
|
Temporary Total Disability9
|
3
years
|
|
n
|
n
|
|
|
Unemployment
|
2
years
|
|
n
|
n
|
|
|
Unemployment
|
3
years
|
|
|
|
n
|
|
Parental Leave10
|
6
mos
|
|
n
|
n
|
|
|
Mother Entering/Re-entering Work Force
|
1
year
|
|
|
n
|
|
|
Economic Hardship
|
3
years
|
|
|
|
n
|
PLUS Loans
|
|
Deferment Conditions
|
Time
Limit
|
Loans
Before
8-15-83
|
Pre
7-1-87
|
New1
Borrower 7-1-87
to 6-30-93
|
New2
Borrower 7-1-93
|
|
In-School: Full Time
|
None
|
n4
|
n4
|
n4
|
n5
|
|
In-School: Half-Time
|
None
|
|
|
n7
|
n5
|
|
Graduate Fellowship
|
None
|
n4
|
n4
|
n4
|
n5
|
|
Rehabilitation Training
|
None
|
n4
|
n4
|
n4
|
n5
|
|
Military or PHS6
|
3
years
|
n
|
|
|
|
|
NOAA8
|
3
years
|
n
|
|
|
|
|
Peace Corps, Domestic, Tax Exempt Organization Volunteer
|
3
years
|
n
|
|
|
|
|
Teacher Shortage
|
3
years
|
|
|
|
|
|
Internship/Residency Training
|
2
years
|
n
|
|
|
|
|
Temporary Total Disability9
|
3
years
|
n
|
n
|
n
|
|
|
Unemployment
|
2
years
|
n
|
n
|
n
|
|
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