Student loan payment options

There are many payment options to fit your budget when paying off your student loans.

If you are a recent college graduate or if you have stopped attending school and you took out student loans to fund your education, you are likely to have to begin repaying that money sooner rather than later.

Grace periods
When you graduate or leave school, you may have a grace period before you must start making student loan payments. This is presumably to allow you time to find employment and get on your feet. If you have a Federal Family Education Loan (FFEL) or a Stafford Loan, you should have six months after you graduate, leave school or fall below half-time enrollment hours before you are expected to start repaying your loan. If you have a federal Perkins Loan, you should have nine months before you are expected to start repaying the loan.

For federal Stafford loans, you have three repayment options:

Standard
This repayment plan has a fixed amount you repay for the duration of the term of the loan.

Graduated
The graduated plan starts off with lower payments. As time passes the payment amount increases. This payment option assumes that as you get older, you will make more money and be able to afford to repay more.

Income-sensitive
With this repayment plan, your monthly payments are calculated according to your income.

When deciding which plan to use, be sure to have a budget at hand and a specific financial goal. It may be tempting to opt for the lowest monthly payments and the longest terms, but you might end up still paying for your student loans when you are fifty!

You may also have the option of having your payments electronically debited from your account. Depending on what kind of student loan you have, this can lower you interest rate and also keep you from having to keep track of paper statements and due dates.