Payback TIme
The federal government offers four repayment plans, each with its own qualifications. Visit www.studentaid.ed.gov for details and to determine which of these might work best for you.
- Standard: Pay a fixed amount of at least $50 per month until your loan is fully paid (up to 10 years).
- Graduated: Pay a lower amount each month in year one, then increase your monthly payment over time.
- Extended: Pay a fixed amount each month with the maximum dependent on the amount you borrowed.
- Income Based: You may be eligible if your federal loan debt is high relative to family size and income; for details, visit www.ibrinfo.org.
Debt Forgiveness Plans
If you just can’t afford to make your loan payments, the worst thing you can do is nothing. To avoid default, face up to your situation and seek help.
The federal government might forgive your debt under certain conditions related to what you do and where you work. You may qualify for student loan forgiveness if you are:
• A public service employee, including Peace Corps, AmeriCorps, Head Start and VISTA workers; nurses and medical technicians; law enforcement and corrections officers; child and family services workers; and more.
• A teacher who has been teaching full time in a school serving low-income students for five consecutive years.
To find out if your career qualifies under either category, call 1-800-4-FED-AID. For general information about loan forgiveness, visit www.studentaid.ed.gov/repay-loans/forgiveness-cancellation.
Public Service: A Manageable Solution
Juggling work and family demands, Reyonna Parrish used the distance learning option to earn her bachelor’s degree in behavioral studies from Lynn University. She continued with distance learning and earned her master’s degree from Nova Southeastern University — a real accomplishment. In the process, however, Reyonna piled up student debt totaling more than $80,000.
Reyonna got a great education and a job she loves, but her scheduled repayment plan was more than she could handle. Relief came due to her job with the Florida Department of Education that qualifies for the Public Service Loan Forgiveness Program.
“It’s a life saver,” says Reyonna. “My payments would have been $1,200 a month for 10 years. The plan modified my payment based on my income and household size … now it’s $300 a month. It will increase as my pay increases or my household decreases, but it’s manageable.”
Reyonna Parrish - Outreach Representative, Florida Department of Education, Tallahassee