Federal student loan repayment plans - THECB - Home

Federal student loan repayment plans

Options to help borrowers manage repayment

Agenda

? Overview of repayment plans--key features ? Borrower example ? Public Service Loan Forgiveness ? Resources

Repayment plans

What repayment plans are available?

"One-size fits all" repayment plans:

? Standard ? Graduated ? Extended

Repayment plans

? Standard ("automatic")

? 120 equal monthly payments ? Maximum10-year repayment term

? Graduated

? Payments start smaller; increase every 2 years ? Maximum 10-year repayment term

? Extended (fixed or graduated)

? For borrowers with over $30,000 in debt ? Up to 25 year repayment term

What repayment plans are available?

"Income-driven" repayment plans:

? Income-sensitive (FFEL only) ? Income-based (FFEL and Direct Loans) ? Income-contingent (Direct Loans only) ? Pay as You Earn (Direct Loans only) ? Revised Pay as You Earn (Direct Loans only)

Income-driven repayment (IDR) plans

Primarily intended for borrowers:

? Entering repayment with high student loan debt relative to income

? Having difficulty making payments under 10-year Standard repayment plan

? In need of a long-term solution for managing repayment

? Seeking Public Service Loan Forgiveness

IDR plans overview

? Income-Contingent Repayment (ICR)

? Lesser of 20% of discretionary income or fixed payment amount over 12 years

? Payments adjusted annually based on income ? Maximum 25-year repayment term

? Income-Sensitive Repayment (ISR)

? Payments increase or decrease based on annual income ? No single payment can be more than 3 times greater ? Maximum 10-year repayment term (but may receive up to 5

years of forbearance, if needed)

Note: parent PLUS borrowers are eligible for these IDR plans only

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