Homeownership and Understanding Student Loan Repayment Options

Age Group

Under 30

30 to 39

Student Loan Debt

350 million

350 million

Number of Borrowers

15 million

10 million

Average Student  Loan Balance

$20K

$30K

Repayment Plan

Eligible Loans

Monthly Payment and Time Frame

Simple Comparison

Standard Repayment Plan

Direct Subsidized and Unsubsidized Loans, subsidized and Unsubsidized Federal Stafford Loans, and PLUS Loans.

Payments are a fixed amount of at least $50 per month.

Less Interest is paid under this plan than other plans.

Graduated Repayment Plan

Direct Subsidized and Unsubsidized Loans, subsidized and Unsubsidized Federal Stafford Loans, and PLUS Loans.

Payments are lower at first and then increase, usually every two years.

Up to 10 years.

This plan will has more interest expense than the standard plan.

Extended Repayment Plan

Direct Subsidized and Unsubsidized Loans, subsidized and Unsubsidized Federal Stafford Loans, and PLUS Loans.

Payment may be fixed or graduated.

Up to 25 years.

Monthly payments are lower than the 10 year standard plan.

Minimum loan balances are required for this option.

Income Based Repayment Plan

Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, and PLUS Loans.

Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL Plus Loans made to parents.

The maximum monthly payments are 15% of discretionary income, which is the difference between the adjusted gross income and 150% of the poverty guideline based on family size and location.

Payment may change as income changes. Up to Twenty-Five Years.

Must have a partial financial hardship.

Monthly payments are lower but interest expense is higher than the 10-year standard plan. Any unpaid amount after 25 years of making qualified monthly payments may be forgiven but any forgiven amount may be taxable.

Pay as You Earn Repayment Plan

Direct Subsidized and Unsubsidized Loans, and Direct PLUS loans made to students.

Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL Plus Loans made to parents.

The maximum monthly payments are 10% of discretionary income, which is the difference between the adjusted gross income and 150% of the poverty guideline based on family size and location.

Payment may change as income changes. Up to 25 years.

Must have a partial financial hardship.

Must be a new borrower on or after October 1, 2007, and must have received a disbursement of a direct loan on or after October 1, 2011.

Payments will be lower but interest expense will be greater than the standard 10-year plan.

Any unpaid amount after 20 years of making qualified monthly payments may be forgiven, but any forgiven amount may be taxable.

Income Contingent Repayment Plan

Direct Subsidized and Unsubsidized Loans, Direct Plus Loans made to student, and Direct Consolidation Loans.

Payments are calculated based on adjusted gross income, family size, and total amount of Direct Loans. Payments change with income. Up to twenty-five years.

Payments will be lower but interest expense will be greater than the standard 10 year plan.

Any unpaid amount after 25 years of making qualified monthly payments may be forgiven but any forgiven amount may be taxable.

Income Sensitive Repayment Plan

Subsidized and Unsubsidized Federal Stafford Loans, FFEL Plus Loans, and FFEL Consolidation Loans.

Monthly payment is based on annual income. Payments change with income. Up to ten years.

Payments will be lower but interest expense will be greater than the standard 10 year plan.

Monthly payment can vary per loan servicers’ repayment formula.