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.

  • 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.

  • Income Based Repayment Plans

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, 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.

  • Pay As You Earn (PAYE)

Also known as PAYE, this is an income based repayment option that was created by President Obama to aid borrowers with paying back federal student loans. This type of payment plan is based on a percentage of your monthly income. It takes into account tax returns, size of household, income, and state of residency. If you qualify, after 10 years of paying back student loans, you may be able to have the remaining balance forgiven.

  • Revised Pay As You Earn (REPAYE)

Similar to PAYE, REPAYE caps monthly payments at 10% of discretionary income. However, after 20 years of paying back undergraduate loans, the program will forgive the remaining balance of student loan debt. This type of repayment plan is an extension of the PAYE program, which means that it reaches out to borrowers with Direct Loans as well.

  • Income Contingent Repayment

This type of repayment plan is ideal for those who are pursuing public service jobs, such as a government job or with a non profit organization. These plans adjust to the borrower’s income, family size, and total amount borrowed. They are recalculated every year in order to best suit the needs of the borrower and to determine when the loans will be paid off. After 25 years, any debts that have not been paid back will be forgiven. However, if a borrower is eligible, they should take advantage of the Public Service Loan Forgiveness Program, which cuts the 25 years down to only 10 years of working public service and paying off loans.