Student Loan Debt: Repayment Options

If you are a college-educated American between the ages of 23-30, it is quite likely you have some amount of student loan debt still remaining on the books. The good news is that there are a few different ways to repay and negotiate debts. Here is a quick look at a few of the debt negotiation and repayment plans available to you.

Determine Type of Loan

The first step is to understand what type of student loan debt you have. The type of debt will dictate the repayment plan you can pursue. There are three different sets of loans: federal, school-issued federal, and private. Each have different rules and regulations that go along with it, but let’s take a look at the options for debt negotiation with federal student loans.

Federal Student Loan Repayment Plans

If you took out a federal student loan for your college education, you have a number of different options available to you. Some of the most popular include the ‘Standard Repayment Plan,’ ‘Graduated Repayment Plan,’ and ‘Extended Repayment Plan.’

• Standard Repayment Plan – This plan is offered to you by the lender and allows you to make payments on your student loan debt for up to ten years. You will end up paying higher monthly payments, but your overall payment will be lower because you are paying less interest over the term.
• Graduated Repayment Plan – This is a good option for those who will be earning a small salary out of college, but expect to make more in the future. The payments start out low and increase over time.
• Extended Repayment Plan – This plan allows you to stretch your payments out over a period of 25 years. Your student loan debt must be in excess of $30,000 to qualify for this option.

There are a number of other options available to those with student loan debts, but these are by far the most popular.