Are you getting ready to start repaying your student loans, or are you currently in repayment? Did you know there are several repayment options, as well as possible loan forgiveness? Here are five factors to consider if you have student loans. 

1. Federal Direct Loans have multiple repayment plans

When you start repaying your student loan, you will automatically be entered into the Standard Repayment Plan (10-year repayment term with minimum payments of $50 per month). However, you have a variety of payment plan options available. Be sure to understand your repayment options and choose a payment plan that works best for your situation. You are allowed to change your payment plan once per year, each year. To get an estimate of your monthly loan payment under each of the different payment plans, visit StudentLoans.gov and click on “Repayment Estimator.” 

2. Options often exist for those who are struggling to make payments

If you are struggling to make your monthly student loan payment, please contact your loan servicer. Your loan servicer is there to help you with your student loan and can explore options for changing your payment plan. If your income is limited, your loan payments could be $0 per month.

Another option to investigate is whether or not you qualify for a deferment or forbearance. If you do qualify, a deferment or forbearance can allow you to take a temporary break from making your student loan payments. To see if you qualify, contact your loan servicer. For more information, visit studentaid.ed.gov .

3. Loan forgiveness may be possible

You may be able to have your federal loan forgiven, canceled, or discharged, which means that you are no longer expected to repay your loan. It’s important that you explore your options for loan forgiveness, especially if you are, or plan to work, in a nonprofit, government agency, or other public service profession. Federal Student Aid and your loan servicer are the best sources of information about loan forgiveness.

4. Paying your loan off early can save you money

If you can afford to pay more than your required monthly payment, even if it is not on a regular basis, you can lower the total amount of interest you pay over the life of the loan. To pay down your loan more quickly, contact your loan servicer to find out how to apply the extra amount to your loan principal. Otherwise, your prepayment may automatically be credited to a future payment and you may not be billed for the next month. There is no penalty for paying off your student loan early.

5. Lower interest rates may be available

Refinancing your student loans with a new lender might help you lower your interest rate, which could lower your monthly payment and the amount that you pay over the life of your loan. Before you refinance, carefully review the benefits of your current loan(s), especially if you are thinking of refinancing any federal student loans. Be sure you do your research to determine whether a new loan is best for your situation. To learn more about how to determine if refinancing or consolidation may be right for you, visit TheLoanForME.com. 

For additional helpful information and resources, find  previous issues of 5 on the 5th on our website.

FAME's College Access and Financial Education Team:

Mila Tappan, College Access and Outreach Manager

Jessica Whittier, College Access Counselor 

Nikki Vachon, College Access Counselor

Maria MacDougal, College Access Counselor

Floreka Malual, College Planning Advisor

Mary Dyer, Financial Education Officer

Jennifer Lanphear, Education Programs Officer

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