Standard Repayment
Once a borrower enters repayment they are automatically set-up on a Standard Repayment plan. This plan
establishes a schedule of equal payments over a 10 year repayment term. During this time, borrowers
are required to pay their federal loan(s), including interest, and make at least a $50 minimum monthly
payment (note: the 10 year repayment term excludes periods of enrollment of at least half-time, grace,
deferment and forbearance, if applicable).
Graduated Repayment
Graduated Repayment allows borrowers to begin repaying their loan(s) at a lower payment amount than
normal. Every two years, the payment amount will increase until the balance of the loan is repaid
within the maximum repayment term applicable to the loan. Overall, borrowers will pay more in
interest, but the initial payments are lower than the Standard Repayment plan.
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Income-Based Repayment
Income-Based Repayment is a new option effective July 1, 2009 for borrowers who experience a partial
financial hardship (as explained below). Under this plan, your required monthly payment amount is
determined by your annual gross income (AGI) and the poverty level associated with your family size
and state of residence. If your total annual student loan payments are greater than 15% of the
difference between your AGI and 150% of the poverty level applicable to you, you are considered to be
experiencing a partial financial hardship and are eligible for the Income-Based Repayment plan.
Example: For 2009, 150% of the poverty level for a family of 1 living in Texas was $16,245. A borrower
with an AGI of $40,000 would have a partial hardship if his/her annual student loan payments were
greater than $3,563, or $296 per month ($3,563 is 15% of the result from subtracting $16,245 from
$40,000).
The maximum repayment period under this plan may exceed 10 years. If after 25 years of qualifying
payments your student loan balance is not paid in full, your remaining balance will be forgiven. The
Income-Based Repayment plan is not available for Parent PLUS loan(s), Consolidation loan(s) that
repaid any Parent PLUS loan or any defaulted loan(s).
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Income-Sensitive Repayment
With this option, the monthly payment amount is adjusted annually to reflect changes in income, based
on the borrower’s total monthly income and total student loan debt. This option may be used for a
maximum of five years at which time the borrower’s account(s) will convert to Graduated or Standard
payments. Under this option, the borrower is required to provide documentation of income on an annual
basis. If documentation of income is not provided each year, the loan(s) will be placed on a Standard
Repayment schedule.
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Extended Repayment
Extended Repayment allows borrowers to extend their Standard or Graduated Repayment plan for up to 25
years. This plan is only available to "new borrowers" whose federal loan(s) were disbursed on or after
October 7, 1998, and who have an outstanding balance of principal and interest totaling more than
$30,000.
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Deferment & Forbearance
We understand that there may be periods of time in which you may not be able to make your monthly
payment due to certain circumstances. This is why we offer deferment and forbearance options, so that
you can reduce or postpone your monthly loan payments. These periods of time do not count toward the
length of time you have to repay your loan(s).
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