Student Loan Payments
Student loans have become extremely popular in recent years as the rate of inflation has led to a rise in the cost of higher education. Many students find it difficult to pay an average $35,000 for degree programs, directly increasing the need of external finance through loans. Institutions, private banks and even the federal government specialize in student loan programs that aim to help students cover education expenses. Some of the most popular federal student loan programs include the Stafford loan, Perkins loan and Graduate loan.
Although loan might help students pay for education so that they may pursue their academic goals, loans must be repaid, meaning that a student who borrows money must pay back the lender at some point in the future. Notably, the basic disadvantage of loans is that they carry an interest amount that adds to the debt and the amount of interest varies by lender.
Increasing loan disbursements and availability have definitely caused a problem of debt in our country. More and more, students are becoming trapped in debt repayments that never seem to come to an end. The impact of repayments has also impacted affordability and disposable income of an average graduate. By better managing repayment plans, students can avoid default. To help cope with these problems, the government and certain private institutions offer loan repayment programs that minimize payment and make them easier to pay.
Students can apply for consolidation programs or other repayment plans that will help them manage their financial situation and debt. Some of the most basic student loan payments plans include:
Standard Plan: With this plan, students must pay a fixed amount every month for a fixed period of time. The time period can be up to 10 years, or even as little as 5 years.
Extended Repayment: Under this program, a borrower may extend the payment plan by 25 years, which automatically lowers the monthly repayment.
Income Based Repayment: Obvious from the term, a student’s repayment will depend upon the level of income he or she earns.
- FAQ Home
- A Guide to Lenders
- Be Smart About Private Loans
- Before Borrowing
- Choosing Private Loans
- Choosing the Right One
- Education Loan Borrowing Process
- Finding a Co-Signer
- How Much to Borrow
- Lessons Learned
- Paying Off
- Rights Responsibilities
- Selecting a Co-Signer