STUDENT LOAN CONSOLIDATION OPTIONS
1. Standard Repayment
With the standard plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly
payments will be at least $50, and you'll have up to 30 years to repay your loans with a fixed interest rate.
The standard plan is a good fit for you, if according to your budget the IBR, ICR and PAYE plans are higher
in monthly payment, as the standard plan does not account for your finances.
2. Graduated Repayment
With this plan your payments start out low and increase every two years. The length of your repayment
period will be up to 30 years. If you expect your income to increase steadily over time, this plan may be right
for you. Your monthly payment will never be less than the amount of interest that accrues between payments.
3. Income Contingent Repayment (ICR)
(Not available for parent PLUS Loans)
This plan gives you the flexibility to meet your Direct Loan obligations without causing undue financial
hardship. Each year, your monthly payments will be calculated on the basis of your adjusted gross income
(AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct
Loans. Under the ICR plan you will pay each month the lesser of:
1. the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage
factor that varies with your annual income, or
2. 20% of your monthly discretionary income.
If your payments are not large enough to cover the interest that has accumulated on your loans, the unpaid
amount will be capitalized once each year. However, capitalization will not exceed 10 percent of the original
amount you owed when you entered repayment. Interest will continue to accumulate but will no longer be
The maximum repayment period is 25 years. If you haven't fully repaid your loans after 25 years (time spent
in deferment or forbearance does not count) under this plan, the unpaid portion will be discharged. You may,
however, have to pay taxes on the amount that is discharged.
4. Income-Based Repayment Plan. (IBR)
5. Pay As You Earn. (PAYE)
Under this plan the required monthly payment will be based on your income during any period when you
have a partial financial hardship. Your monthly payment may be adjusted annually. The maximum
repayment period under this plan may exceed 25 years. If you meet certain requirements over a specified
period of time, you may qualify for cancellation of any outstanding balance of your loans.
On December 2012 the DOE announced that borrowers with Federal Student Loans may now be able to take
advantage of a new repayment plan that could lower their monthly federal student loan payments. The plan,
known as Pay As You Earn, caps monthly payments for many recent graduates at an amount that is
affordable based on their annual income. This new option follows through on President Obama’s promise to
provide student graduates with relief on their student loan payments and help them responsibly manage their
Pay As You Earn plans cap monthly payments for Federal Direct Student Loans at 10% of discretionary
income for eligible the borrowers.
The process is simple! Fill out this form and a specialist will contact you with your options.
For questions please email [email protected] or call 1-800-648-5771.
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