Repay Student Loans and Avoid Default with these Helpful Tips – Video
About 42 million people have borrowed money to pay for college. This totals over $1.2 trillion of federally borrowed money. More than half of these borrowers are struggling to repay their student loans. As a result, more than one quarter of borrowers are behind on payments or have had their loans placed into default. With income drive repayment plans, borrowers can take control of their student loan payments without having to sacrifice their finances. Each avenue of repayment plan is not a one size fits all, so it is important to assess your current financial situation and meet with a professional student loan servicer to find a plan that suits you.
Avoid Default with Repayment Plans
- Enroll in an Income Driven Repayment Plan
Income Driven Repayment Plans are the easiest way to create a payment plan that suits your financial needs. This type of plan is federally backed and will only help pay back federal student loans. Payments are solely based on your income, so they are suited to your personal finances. This type of repayment plan bases your monthly payment amount on your yearly income and size of household. There are many different plans such as REPAYE, IBR, ICR, and PAYE. Payments are typically based on 10-20% of discretionary income. Most plans will allow you to choose the amount that you feel comfortable paying within your means.
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