Public Service Loan Forgiveness
The Department of Education recently announced substantial changes to the Public Service Loan Program (PSLF) to make the approval and application process easier for borrowers. Please view the video below for details.
Additional information can be found on the Department of Education’s website.
Repayment
Repayment is the time period during which you are responsible for paying back your student loans. Federal Student loans have a six month grace period and Perkins loans have a nine month grace period. The grace period begins after graduation or after the borrower ceases to be enrolled at least half time. It is imperative that you keep in contact with your loan servicer to insure that you are aware of your repayment terms. To make your payments more affordable, the repayment plans listed below can give you more time to repay your loans or can be based on your income. The table below is an example of the resources available to you at www.studentaid.gov.
Repayment Plans
Repay Your Direct Loans and Federal Family Education Loan (FFEL) Program Loans
| Repayment Plan | Eligible Loans | Monthly Payment and Time Frame | Eligibility and Other Information |
| Standard Repayment Plan | Direct Subsidized and Unsubsidized LoansSubsidized and Unsubsidized Federal Stafford Loansall PLUS loansall Consolidation Loans (Direct or FFEL) | Payments are a fixed amount.Up to 10 years (up to 30 years for Consolidation Loans). | All borrowers are eligible for this plan.You’ll pay less over time than under other plans. |
| Graduated Repayment Plan | Direct Subsidized and Unsubsidized LoansSubsidized and Unsubsidized Federal Stafford Loansall PLUS loansall Consolidation Loans (Direct or FFEL) | Payments are lower at first and then increase, usually every two years.Up to 10 years (up to 30 years for Consolidation Loans). | All borrowers are eligible for this plan.You’ll pay more over time than under the 10-year Standard Plan. |
| Extended Repayment Plan | Direct Subsidized and Unsubsidized LoansSubsidized and Unsubsidized Federal Stafford Loansall PLUS loansall Consolidation Loans (Direct or FFEL) | Payments may be fixed or graduated.Up to 25 years. | If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans.Your monthly payments will be lower than under the 10-year Standard Plan or the Graduated Repayment Plan.You’ll pay more over time than under the 10-year Standard Plan. |
| Revised Pay As You Earn Repayment Plan (REPAYE) | Direct Subsidized and Unsubsidized LoansDirect PLUS loans made to studentsDirect Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents | Your monthly payments will be 10 percent of discretionary income.Payments are recalculated each year and are based on your updated income and family size.If you’re married, both your and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions).Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 or 25 years. | Any Direct Loan borrower with an eligible loan type may choose this plan.Your monthly payment can be more than the 10-year Standard Plan amount.You may have to pay income tax on any amount that is forgiven.Good option for those seeking Public Service Loan Forgiveness (PSLF). |
| Pay As You Earn Repayment Plan (PAYE) | Direct Subsidized and Unsubsidized LoansDirect PLUS loans made to studentsDirect Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents | Your maximum monthly payments will be 10 percent of discretionary income.Payments are recalculated each year and are based on your updated income and family size.If you’re married, your spouse’s income or loan debt will be considered only if you file a joint tax return.Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 years. | You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.You must have a high debt relative to your income.Your monthly payment will never be more than the 10-year Standard Plan amount.You’ll pay more over time than under the 10-year Standard Plan.You may have to pay income tax on any amount that is forgiven.Good option for those seeking Public Service Loan Forgiveness (PSLF). |
| Income-Based Repayment Plan (IBR) | Direct Subsidized and Unsubsidized LoansSubsidized and Unsubsidized Federal Stafford Loansall PLUS loans made to studentsConsolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents | Your monthly payments will be 10 or 15 percent of discretionary income.Payments are recalculated each year and are based on your updated income and family size.If you’re married, your spouse’s income or loan debt will be considered only if you file a joint tax return.Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 or 25 years.You may have to pay income tax on any amount that is forgiven. | You must have a high debt relative to your income.Your monthly payment will never be more than the 10-year Standard Plan amount.You’ll pay more over time than under the 10-year Standard Plan.Good option for those seeking Public Service Loan Forgiveness (PSLF). |
| Income-Contingent Repayment Plan (ICR) | Direct Subsidized and Unsubsidized LoansDirect PLUS Loans made to studentsDirect Consolidation Loans | Your monthly payment will be the lesser of 20 percent of discretionary income, orthe amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.Payments are recalculated each year and are based on your updated income, family size, and the total amount of your Direct Loans.If you’re married, your spouse’s income or loan debt will be considered only if you file a joint tax return or you choose to repay your Direct Loans jointly with your spouse.Any outstanding balance will be forgiven if you haven’t repaid your loan in full after 25 years. | Any Direct Loan borrower with an eligible loan type may choose this plan.Your monthly payment can be more than the 10-year Standard Plan amount.You may have to pay income tax on the amount that is forgiven.Good option for those seeking Public Service Loan Forgiveness (PSLF).Parent borrowers can access this plan by consolidating their Parent PLUS Loans into a Direct Consolidation Loan. |
| Income-Sensitive Repayment Plan | Subsidized and Unsubsidized Federal Stafford LoansFFEL PLUS LoansFFEL Consolidation Loans | Your monthly payment is based on annual income.Up to 15 years. | You’ll pay more over time than under the 10-year Standard Plan.The formula for determining the monthly payment amount can vary from lender to lender. |