Student Loan Payment Plans Overview

There are currently nine different Student Loan Payment Plans.  They all have different methods of calculating payments and use different logic to account for how they do this.  Several plans are based on income such as IDR, New IDR, ICR and IBR.  Other plans are balance-based and the last are variations which are often inconsequential. They are as follows:

• Standard Repayments
• Extended Repayments
• Graduated Repayments
• Extended Graduated Repayments
• Income-Based Repayments
• New Income-Based Repayments
• Income Contingent Repayments
• Pay-As-You-Earn
• Revised-Pay-As-You-Earn

There are several variables you should consider when selecting which of the Student Loan Payment Plans you want. These variables include:

• How long have you been out of school?
• What are your current earnings?
• What is your future earning potential?
• What major purchases do you expect to make such as a house, wedding, etc.?
• What life-altering events are planned such as having children?
• What are your other financial responsibilities?

These variables make an impact because some loans put you on a gradually increasing payment regardless of the future you expect. Other Student Loan Payment Plans allow for a payment that adjusts as your income adjusts, being re-evaluated yearly. When considering these plans, it is a good idea to talk to an account or financial advisor to better understand the impact of each plan. Once you decide which plan works best for you, you can complete the documents you need on your own or through a documentation preparation service.

Be sure to select the service carefully. Look for those services which advertise their price before you tell them your situation. Many services offer a free consult but then adjust their price based on what you need often charging excessive fees in the process. If they will not provide a price right from the beginning, they are probably expensive.