Repayment of Student Loans
Repayment of student loans terms for 10 years are applicable for Standard Repayment, with higher monthly payments, low total payments, but with less interest costs. Borrower with low income is eligible in for 10 years repayment term of Graduated Repayment with lower monthly payments that will increase every 2 years. Borrower with more than $30,000 loan balance in Federal Family Education Loan Program (FFELP) – a loan program of private lender that guaranteed by government- could select an Extended Repayment that has an up to 25 years repayment term, and also can consolidate with graduated payment. IBR or Income-Based Repayment is intended for borrower with lower and unstable salaries. It has an up to 25 years repayment term that refigured every year. Income-Sensitive Repayment also intended to FFELP borrower with fluctuate income, based on their monthly gross income.
Furthermore, repayment of student loans for a Stafford, Perkins or PLUS Parent Loan have 10 years of standard repayment term, with interest rates repayment of student loans are: 5.6 % interest rate for Federal Subsidized Stafford Loan, 6.8 % for Federal Unsubsidized Stafford Loan, and 8.5 % for Federal PLUS loan. 25 years repayment term of Direct Loan Income Contingent Repayment Plan is purposed to borrower of Federal Direct Loans (except PLUS loan) that has a lower income. A fixed 6.8% interest rate can extend for Federal Direct Consolidation Loan. For a grace period, Federal Stafford loans have 6 months grace period, 9 months for Perkins loans, and PLUS loans have 60 days grace period. Grace period generally define as first time borrower’s payment after graduation.
