Student Loans Types of Repayments

The Federal Direct loans program for students provides with a variety of choices for repayment.  The repayment plans for student loans can be: 

• Standard repayment

• Extended repayment

• Graduated repayment

• Income contingent repayment.

The repayment plans stated above vary based on the amount of time that the government gives the student to repay the loan.  If a student has taken one of the standard repayment student loans, the borrowers will be able to make just $50 repayment for up to 10 years; however, the figure will not be just $50, it is just an example to show that one standard amount can be repaid over a long period of time in the case of standard repayment.

If a student has taken one of the extended repayment student loans, the borrowers will be able to make just $50 repayment for up to 12 to 30 years; however, the figure will not be just $50, it is just an example to show that one standard amount can be repaid over a long period of time in the case of extended repayment.  The duration of repayment with extended repayment plans is more than a standard repayment plan.

If a student has taken one of the graduated repayment student loans, the borrowers will be able to make just a low repayment for up to the stage they graduate.  After they graduate they will be able to make the repayment in increments where they will increase the money they will be repaying over every 2 years.  The repayment period will be between 12 to 30 years.  In cases where they have been paying $50 for 2 years, the third year they can choose to pay $100 for the next two years after that they can increase it to $150 and so on until the loan repayment is over in full.

If a student has taken one of the income contingent repayment student loans, the borrowers will be able to make the repayment based on the adjusted gross income, the size of the family and the total outstanding in their loan.  This is one of flexible of the student loans repayment plans.  The maximum repayment period for this income contingent repayment plan is 25 years and if the money is not repaid after 25 years, the balance is cancelled; however, the money that is not repaid is considered to be income for tax purposes.