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What are the repayment options for student loans?

| Nov 28, 2017 | Chapter 7 Bankruptcy

If you have student loans, you may wonder if there is any help for making the payments more affordable. You are not alone. Many people in Florida share the same concerns. Student loan debt is something that many Americans struggle with and often times end up in serious financial trouble over. The good news is there are quite a few repayment options available. One may be the answer to all your problems. According to the Federal Student Aid office, student loan repayment options are offered based upon different conditions you must meet. 

Your default option for repayment is the standard plan, which is available to everyone. It’s main benefit is that you will pay less interest because your are making large monthly payments, but those large monthly payments are part of the reason many people run into financial issues. Your better options are some of the lower payment plans. 

Lower payment plans are based off your income. One option is the pay as you earn plan, which has you paying 10 percent of your discretionary income and you must pay for 20 years at which time your remaining loan debt is forgiven. Another option is the income-based repayment plan, which forgives outstanding debt after 20 to 25 years. On this plan, you pay 10 to 15 percent of your discretionary income. Finally, there is the income-sensitive repayment plan where your payments are based on your annual income. 

It is important to completely check out each option. They all have specific criteria you must meet, such as having a certain maximum income or having certain types of loans. This information is only intended to educate and should not be interpreted as legal advice.