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7 Federal Student Loan Payback Plans: What You Need to Know
Posted on Nov 8, 2013
In October, the Department of Education began contacting borrowers who were struggling to pay back their student loans to let them know about the various repayment options that are available to them.
“We think there are lots of people who could benefit from our income-based repayment programs, but they haven’t signed up—and we want to get to them before they default,” education secretary Arne Duncan said recently. “The challenge is getting the word out.”
Although most borrowers choose to repay their loans on the standard 10-year plan, other options, like those based on income, can make repaying student loans easier on the wallet—and lower your risk of default. Last year, about 600,000 borrowers defaulted on their loans, an action that has the potential to tank their credit reports and get them in major financial hot water.
So here s the word: Whether or not you already have a repayment plan, keep reading to find out if another offering might be better for you. Just note that these programs are only available for federal loans—not private—and eligibility for each one depends largely on the types of loans you have, so consult our learn more link for each of the seven plans highlighted below for more information.