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Repayment Options

FEDERAL LOAN REPAYMENT OPTIONS

If all of your federal student loans, including Consolidation loans, were first disbursed on or after July 1, 1993, you are entitled to utilize a repayment plan (see list below).

If you have loans that were first disbursed prior to July 1, 1993, your lender may (but is not required to) offer alternate repayment options. Check with your lender or servicer to see what repayment options they may offer.

Standard Repayment
Monthly payments are equal throughout the life of the loan. Interest costs are lower with a standard repayment plan.

Graduated Repayment
May begin with interest payments converting to gradually increased payments, or begin with interest and low principle payments gradually increasing to payout. Total interest costs will be higher than a Standard Repayment Plan due to minimal principal reduction with initial payments. Minimum payments must cover interest due each month.

Income-Sensitive Repayment
Your monthly payments are tied to your income and increases along with your earnings. Your lender will require annual certification of your income. If the certification is not provided, your lender may exercise its right to convert your loan(s) to a Standard Repayment Plan. Total interest costs may be greater than those associated with Graduated or Standard Repayment Plans.

Income-Based Repayment (available on 7/1/09)
Income-Based Repayment (IBR) is a new repayment plan for federal student loans introduced by the College Cost Reduction and Access Act (CCRAA). Starting July 1, 2009, it will help borrowers keep their loan payments affordable with payment caps based on their income and family size.

Click here for more information on the new Income Based Repayment Option

Extended Repayment
If all your student loans were first disbursed on or after October 7, 1998, and you have a minimum of $30,000 in outstanding Federal Family Education Loan Program (FFELP) debt, you may have up to a 25-year repayment term. Additionally, your monthly payments may be set up on a standard or graduated payment schedule. If you choose an extended repayment plan, total interest costs increase as a result of the longer repayment period and could be compounded by the selection of an extended graduated repayment plan.

LEAFSM AND TREESM LOAN REPAYMENT OPTIONS

The NHHEAF Network Organizations offer a variety of repayment options and tools to LEAFSM and TREESM borrowers to help ensure successful repayment of their loans.

Repayment Plans

Standard
With Standard Repayment, you have a regular payment amount of at least $50 a month, per loan, for up to 20 years. Standard Repayment option costs the least over the life of your loan because you are paying more towards your principal balance at the beginning of repayment. If you do not request a different repayment plan, you will automatically receive Standard Repayment.

Graduated Repayment
Under the Graduated Repayment Plan your monthly payments are lowered from the Standard Repayment Plan to as low as interest only. Every two years the monthly payment amount increases by 25%. The monthly payment takes care of the accrued interest first, then any remaining payment amount goes to the principal. Because the initial payment amount is lowered, most of the monthly payment goes to interest. The principal is paid down at a slower rate than the Standard Repayment plan, costing more in interest over the life of the loan.
 

Have repayment questions?  Use our FAQs or contact us for assistance.