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Repayment:
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The actual terms of how your educational loan will be paid back. Terms include the amount of payments (normally paid on a monthly basis), interest rate, and number of years to repay. The following repayment plans may apply to your federal student loans:
- Standard Repayment Plan: You have up to 10 years to repay your loan with fixed monthly payments that are the same amount. Your payments will not be less than $50 per month and are usually higher to pay off the loan in 10 years. Standard repayment is the least expensive because more interest comes due under other plans.
- Graduate Repayment Plan: You have up to 10 years to repay your loan with monthly payments that start out small and are gradually increased. No payment can be more than three times the amount of the smallest payment. Your minimum payment will not be less than the amount of interest due each month.
- Extended Repayment Plan: You may be given up to 25 or 30 years to repay your loan with fixed or graduated payments. Extended repayment plans generally start with 12 years, depending upon the amount you borrowed.
- Income Sensitive Repayment Plan: For FFELP Loans, you may have the amount of your payments adjusted based upon your income. You must submit income and other information periodically to your lender or servicer. Your payments will go up or down depending upon income and other factors. If necessary, your lender may grant forbearances for an income-sensitive repayment plan up to 5 years for a total of 15 years to repay.
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