Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.
Unless you plan on being a student the rest of your life, student loan repayment is inevitable, and the ins and outs of student loan repayment can be confusing and overwhelming. The financial advisors at NextStudent, a leading Phoenix-based education funding company, would like to help clear the murky waters by defining terminology and laying out your student loan repayment options.�
Understanding Your Student Loan Repayment Options
A grace period is a pre-determined amount of time allotted to student borrowers after they leave school or drop below half-time enrollment before they must begin repayment of their federal student loans. Grace periods vary in length based on the type of student loan: Stafford loans have a grace period of six months; Perkins loans have a grace period of nine months. PLUS, Grad Plus and Federal Student Loan Consolidation loans have no grace period.
Deferment allows you to temporarily postpone your student loan payments (in most cases, up to a total of three years over the life of the student loan) if you’re unemployed or experiencing economic hardship. You can also request in-school deferments on your federal student loans while you’re enrolled at least half time.
While you’re in a grace period or in deferment, the interest on your Perkins and subsidized Stafford loans will be paid by the government. But you’ll be responsible for the interest on your PLUS, Grad PLUS and unsubsidized Stafford loans—any unpaid interest that accrues on these student loans during grace and deferment periods will be added to your principal loan balance for you to repay once repayment starts or resumes. If you want to avoid interest being added to your principal loan balance while you’re in a grace period or in deferment, you can choose to make interest-only payments during that time.�
Forbearance also allows you to temporarily postpone your student loan payments. When you’re in a forbearance period, you’ll have to pay any interest that accrues, even on Perkins or subsidized Stafford loans.��
Repayment Plans
Perkins, Stafford, PLUS and Grad PLUS loans have a standard repayment period of 10 years. If your standard monthly payment amount is higher than you’d like, you have three other repayment plans you can choose from that may make your monthly payments more affordable:
Extended Repayment is available to you if your federal student loans total more than $30,000 and if you received your first federal student loan on or after October 7, 1998. Depending on your student loan amount, you could extend your repayment period up to a 25-year term.
Graduated Repayment allows you to make lower payments at the beginning of your repayment term and gradually increases your monthly payment amount over time.
Income-Sensitive Repayment bases your monthly payment amount on your monthly income. You have to submit documentation of your income to qualify, and you have to requalify each year.
Student Loan Consolidation
If you’ve taken out any federal student loans, you’re eligible to apply for a Federal Student Loan Consolidation from NextStudent, which might give you more time to repay your student loans and could substantially reduce your monthly student loan payment.
The repayment term on a student loan consolidation will range from 10 to 30 years, depending on your total outstanding student loan amount. Student loan consolidation loans generally have the standard federal deferment and forbearance benefits.
When your student loan consolidation is in deferment, the government will pay the interest on that portion of your student loan consolidation loan that was originally a Perkins loan or subsidized Stafford loan. During deferment, you’ll only be responsible for paying the interest on that portion of your student loan consolidation loan that was originally a PLUS, Grad PLUS or unsubsidized Stafford loan. When your student loan consolidation loan is in forbearance, you’ll be responsible for paying all interest that accrues.
You can consolidate one or more qualifying federal student loans and take advantage of one easy-to-manage loan with a single monthly payment. Our online applications are fast and easy, and there are no fees to apply for a student loan consolidation.
NextStudent believes that getting an education is the best investment you can make, and we’re dedicated to helping you pursue your education dreams by making college funding simple. Learn more about Student Loans, Private Student Loans and Student Loan Consolidation at NextStudent.com.
- Related Videos
- Related Articles
- Ask / Related Q&A
- Students Should Consolidate Student Loans Before July 1 Following Repeal of Single-Lender Rule
- Loan Consolidation Student Get the Information you Need
- Nextstudent Offers Discount Incentives for Students Who Consolidate Student Loans During Grace Period
- Loan Consolidation Student Style - The Deal That Works For You
- Why Student Loan Consolidation?
- Student Federal Loan Consolidation – 10 Facts you Must Know
- Student Loan Consolidation: Make your Student Loan Repayment Easier to Manage
- Why Student Loan Consolidation?
Textbook rentals is the best alternative to buying textbooks
By: Caitlina Fuller | 05/07/2009Textbook rental is the best alternative to buying textbooks. With the rising cost of tuition at colleges and universities every year, the additional cost of textbooks is just as overwhelming as the tuition itself.
Rent Textbooks for College and Save Money
By: Caitlina Fuller | 05/07/2009Rent textbooks for college and save money. Sounds great, doesn't it? Well, if you are a college student, burdened by the tuition most colleges or universities charge, you may want to look into textbook rental. With the current economy, textbook rental options are becoming a very popular way to overcome some of the financial difficulties of receiving a higher education.
Ready to Become a Good Lawyer?
By: May Smith | 05/07/2009Becoming a lawyer is a goal for some students, not because of the money they can make in that career, but also the honor and status they can receive in that career. But the road to this kind of success is not that easy. There are many things that you need to accomplish in order for you to become a good lawyer.
Medical Colleges in Punjab
By: Dr. Ripudaman Singh | 03/07/2009This is just a list for better guidance please contact your Local Employment Exchange and there Vocational Guidance Officer. Services are Free to all. Do visit there.
Sharda Group of Institutions And Its Courses
By: Sarvesh | 03/07/2009Sharda Group of Institutions, North India's largest educational group, delivers quality education to its students. This institute is one of the top engineering colleges of India that provides state of the art infrastructure. An individual can easily get employment after completing the course from this institute.
The Global Outreach Program taking IIPM to a world-class level
By: Kartik | 03/07/2009The Global Outreach Program is an integrated approach in taking IIPM to a world-class level
Case Methods In Management Education
By: S.R.Sathyanarayanan | 03/07/2009Case Methods in Mangement Education helps students to provide solutions to real or simulated problems. It helps in developing communication skill, ability to evaluate, decide, go beyond the normal situations etc. It is applicable to all phases of life.
Looking For Distance Education In India?
By: Ras Reed | 02/07/2009There are numerous things that you should be mindful of when searching for distance education in India. No doubt, there are numerous universities and colleges in India offering distance education, but you should always look before you leap. Not all of them are good for you and your career.
Obama Ushers In “Fair and Transparent” Credit Card Regulations
By: Jeff Mictabor | 16/06/2009 | FinanceIn a sweeping move that aims to provide hundreds of thousands of Americans help with credit card debt, President Obama signed into law last month legislation that will put a stop to credit card companies imposing sudden rate hikes and exorbitant fees and penalties on cardholders.
New Repayment Break on Student Loans Begins July 1
By: Jeff Mictabor | 12/06/2009 | College & UniversityIt’s not an easy time to be graduating from college with student loans. With the unemployment rate soaring toward 10 percent and the average starting salary for college graduates down 2.2 percent this year
Obama Proposes Sweeping Reforms to Federal Financial Aid Programs
By: Jeff Mictabor | 14/04/2009 | EducationAs part of the 2010 federal budget submitted to Congress, President Barack Obama is proposing sweeping changes to the federal financial aid system that are meant to make college more affordable for U.S. families.
17% Swell in College Financial Aid Submissions Hints at Economy’s Effect on Families
By: Jeff Mictabor | 15/09/2008 | College & UniversityMore families are appealing to the federal government for help this year in paying for college, as parents face a shrinking job market, record-high food and gas prices, and tightened borrowing restrictions that have grown out of the current credit crisis.
‘the Year of the Youth Vote’: Mccain and Obama Work to Attract Young Voters
By: Jeff Mictabor | 05/09/2008 | College & UniversityStudent Voters Look to Candidates for Answers to Crisis in Student Loans and College Affordability
Students Scramble to Find Student Loans as Fall Semester Draws Near
By: Jeff Mictabor | 22/08/2008 | College & UniversityIt’s crunch time for college students trying to secure the money they need for the fall semester. But with lenders continuing to suspend their student loan programs — the count now stands at 131 federal loan lenders and 30 private loan lenders — students may find themselves challenged to locate lenders that are still offering federal or private student loans.
Increase in ‘stealth Applicants’ May be Affecting Acceptance Rates
By: Jeff Mictabor | 16/05/2008 | Education“Stealth applicants” is the term colleges and universities use to refer to those students whose first communication with a school comes via their admissions application. An increase in these “out-of-the-blue” applicants has thrown off schools’ ability to accurately predict the number of applications they will receive and has caused some schools to adjust their traditional admissions practices.
Changes to Pell Grant Program Needed to Target Lowest-income Students
By: Jeff Mictabor | 09/05/2008 | EducationPell Grants, federal grants targeted at the nation’s most needy students, have not kept up with college costs. In fact, current Pell awards fall far short in helping low-income students cover their education expenses, according to a recently released report from the Institute for Higher Education Policy.