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There
are several valid options which offer temporary relief to individuals
who are having trouble repaying their student loans.
Standard
Repayment Schedule
With the Standard Repayment Schedule plan, your loan is repaid
in equal monthly payments over a 10-year period or 120 equal payments.
The minimum monthly payment is $50, but the actual monthly cost
depends on your loan balance and interest rate.
Graduated
Repayment Schedule
A Graduated Repayment plan is ideal if you have a limited
income today but expect to have higher earnings in the future.
The monthly payments begin low and increase gradually as your
income increases. The initial monthly payments must be high enough
to cover each month's interest. This option may increase the total
amount you will be required to repay as more interest may accrue
over the life of the loan.
Income
Sensitive Repayment Schedule
An Income Sensitive plan allows you to pay based on your income.
You will be required to provide proof of your gross income, and
your servicer will calculate the amount you should reasonably
be able to pay. To stay on the Income Sensitive Repayment Schedule,
you will have to provide your servicer with proof of income annually.
Your repayment amount will be adjusted each year based on your
gross income. This option will increase the total amount of your
loan and may extend your repayment period.
Consolidation
Consolidation is a loan repayment program designed to allow borrowers
to combine several student loans into one loan with the following
possible benefits:
- extend
your repayment terms to as much as 30 years,
- reduce
your monthly payment amount,
- lock
into a fixed interest rate,
- eliminate
the hassle of making payments to multiple lenders, and
- be
eligible for consolidation incentives which may reduce interest
rates.
No
fees or credit checks are required for federal loan consolidation.
Click here for details on
how you may consolidate your loans.
Deferment
During periods of deferment, you are allowed to temporarily
cease making payments on your loan. If you borrowed a Perkins
Loan or a Federal Subsidized Stafford Loan, you won't be responsible
for paying the interest that accrues during the deferment period.
If your loan is a Federal Unsubsidized Stafford Loan or a Federal
PLUS Loan, you will be responsible for that interest.
The
three most common conditions that qualify for deferment are:
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Unemployment
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Returning to school
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Economic hardship
If you think you may be eligible for a deferment, ask for a deferment
form. Your loan holder will not process the deferment until you've
returned the form and any necessary documentation. Anticipate
a 30-day processing period. You should continue making payments
until your deferment is approved.
Click
here to find out which deferments you may be eligible for.
Forbearance
If
you are unable to make payments at some point during the life
of your loan and you don't qualify for a deferment, the holder
of your loan may grant a temporary cessation of payment called
a forbearance. During the period of forbearance, interest continues
to accrue on your loan and must be either paid or added back to
the principal.
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to First Security Bank Student Loan Home Page.
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