Updated on 10.10.16

The Ultimate Guide to Paying Off Student Loans

Introduction

Whether you are on the brink of taking out student loans, or you are right in the thick of paying them off, this guide is for you. There is a lot to consider when paying off student loans, and it pays to know your options. Since we know that knowledge is power and that knowing your options can save you a whole lot of money and stress, we wrote this guide to help you proactively make informed decisions when paying off your student loans.

This guide will cover everything from the basics of student loans, to how to avoid defaulting on your loan. We will go into depth on the subject of Income-Driven Repayment Plans (including a student-loan calculator that will help you compare them) and discuss how and when to consolidate or refinance your loans. After identifying two great strategies that will help you quickly pay off your student loans (if you have the ability to pay a little extra every month), we will talk about the in’s and out’s of all the available student loan forgiveness programs, including teacher and military forgiveness. We will finish off by discussing deferment, forbearance, and how to resolve any disputes that might arise.

Whether you know a lot or a little about student loans right now, when you finish reading this guide you should be ready to make the best possible decisions as you pay off your student loans.

The Basics of Student Loans

For those of you who already have student loans, some of this information may be redundant. However, it’s important to understand the different types of student loans, as certain methods of repayment only apply to specific types of loans. We will only touch on the basics in this guide; read this article for an in-depth look at student loans.

There are two major types of student loans:

Federal Student Loans
Federal student loans are the most common, preferred method used to pay for a college education. They are offered by the U.S. Government and come with distinct advantages, but also with restrictive guidelines. There are several different types of federal loans that are available to specific types of students in certain situations.

We will give a brief rundown of each type of federal student loan below, but for now, here are the basic types:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans (undergraduate)
  • Direct Unsubsidized Loans (graduate)
  • Direct PLUS Loans
  • Perkins Loans

Private Student Loans
Private student loans are far less regulated, but they often come with a much higher interest rate. They are offered by private banks and are often used to supplement educational expenses not covered by federal student loans. There are two basic types of private student loans: variable rate and fixed rate.

For a quick reference guide to student loans, take a look at this table:

*Reflects the current rates for disbursement between July 1, 2016, and July 1, 2017
**Refers to whether the interest is paid by the government while the student is enrolled in school

Available to: Interest Rate:* Subsidized?** Loan Origination Fee
Perkins Undergraduates (With Financial Need) 5% Yes none
Direct Subsidized Undergraduates (With Financial Need) 3.76% Yes 1.069%
Direct Unsubsidized Undergraduates 3.76% No 1.069%
Direct Unsubsidized Graduates or Professionals 5.31% No 1.069%
Direct PLUS Parents and Graduates or Professional Students 6.31% No 4.276%
Private Variable Rate Anyone (qualification based on credit score) Varies (Can be over 10%) No Varies
Private Fixed Rate Anyone (qualification based on credit score) Varies (Can be over 10%) No Varies

Applying for Student Loans

The first, most important step is to fill out a FAFSA and deliver it to your school’s financial aid department. Once that’s completed, many other options open up to you, depending on your specific situation.

The Basics of Repayment

Whether you are just starting college, or you are getting ready to start paying on your student loans, it’s important to understand what’s involved with repaying your student loans – the sooner you understand the basics of repayment, the better.

Loan Servicers

Your loan servicer is the third-party organization assigned by the federal government to handle the “servicing” of your student loans. Basically, your loan servicer is the one-stop shop for all your federal student loan needs.

Loan Servicers provide the following services, they:

  • Send out statements
  • Receive payments
  • Facilitate repayment plans
  • Resolve billing errors
  • Answer general questions

If you haven’t yet been assigned a servicer, one will be assigned to you after the first “disbursement” (when the money is actually paid to the school or you) of your loan. Expect to receive a welcome letter in the mail. If you can’t remember who your loan servicer is, you can log-in to My Federal Student Aid to find out.

Contact your loan servicer if you have any loan related questions, or if you are unable to make a loan payment. You should also contact your servicer if you experience any major life changes such as:

  • A School transfer
  • Quitting school  (including dropping below “half-time” enrollment)
  • A Name, address, or phone number change
  • Graduation
The following table lists the contact information for the various loan servicers:
Name Phone Number
CornerStone 800-663-1662
FedLoan Servicing (PHEAA) 800-699-2908
Granite State Management and Resources 888-556-0022
Great Lakes Educational Loan Services, Inc. 800-236-4300
Edfinancial Services 800-337-6884
Higher Education Servicing Corporation 877-768-0001
MOHELA 888-866-4352
Navient 800-722-1300
Nelnet 888-486-4722
OSLA 866-264-9762
VSAC Federal Loans 888-932-5626

When to Start Paying

Traditionally, students take out all the loans they need to afford their college education, and give no thought to repayment until they graduate. This could be a big mistake, and if you avoid it, you may be able to save yourself some serious money.

Grace Periods

A grace period is the period of time given to you by the federal government between your graduation and when your first payment on your student loans is due. This time period (typically six months) is designed to give you time to get a job, become financially stable, and select a repayment plan (note: applying for an Income-Driven Repayment Plan will not end your grace period early). However, it is important to note that unsubsidized loans will still be accruing interest during this time.

Not all federal student loans come with a grace period:
  • Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period before your first payment is due.
  • PLUS Loans don’t have a grace period. As soon as your loan is fully disbursed (paid out), your loan enters the repayment stage.
  • If you have a Perkins Loan, check with your school.
There are three situations which may affect your grace period:

Being called to active military duty: Should you be called to active duty military service for a period of time greater than 30 days before the end of your original grace period, your grace period will reset to the full six months when you return home.

Returning to school: If you return to school (more than half-time) before the end of your grace period, you will receive the full six-month grace period when you graduate or drop below half-time enrollment

Consolidating your loans: If you choose to consolidate your loans (more on that below), then your grace period is immediately forfeited. You will begin the repayment of your new loan after it is disbursed. Your first payment will typically be due about two months after you consolidate.

Subsidies and Capitalization

If you have a subsidized federal loan, the government will be paying your interest for you while you are in college. If all of your loans fall into that category, then you don’t need to worry about paying off your student loans until you finish college (it’s still wise to spend some time learning about the process of repayment, however).

If your loans aren’t all subsidized, then all the interest accrued on any unsubsidized loans while you were in college will be “capitalized” (added to your principal) when your payments become due. This means that you will be paying interest on a higher amount after college. We’ll talk more about this in a minute, but for now, know that if your student loan interest is capitalized, you will end up paying more in the long run.

Note: Many students graduate college with several different types of loans. It’s important to handle each loan separately and understand the nuances of each. If you assume that what you know about one type of loan applies to all the others, you may wind up with some serious misconceptions.

Interest-Only Payments

Thankfully, there is an option available to those that want to avoid the extra cost of capitalization: you can make “interest-only” payments while you are still in college. While this might mean getting a small side job (many students have one of those already) and diverting some of your extra spending money, it can end up saving you a decent amount of money in the long term. If you are considering making interest-only payments, make sure to contact your loan servicer so they can provide you with the exact amount of interest accrued each month.

Example: To give an example of what this would look like, let’s suppose there are two students who each borrow a total of $20,000 ($5,000 a year) in direct unsubsidized loans at 3.76% for a four-year college degree.

“Student A” graduates college, and after the 6-month grace period, starts paying on his student loans. The interest from his student loans during his 4 years of college is capitalized and added to the principal.

“Student B” makes interest-only payments while he is in college and during the 6-month grace period. He avoids any interest being added to the principal of his student loans.

Take a look at this table to see how much “Student B” saved overall:
Interest Student A’s Payment Student B’s Payment
Year 1: $188 $0 $188 (paid $16 a month)
Year 2: $376 $0 $376 (paid $31 a month)
Year 3: $564 $0 $564 (paid $47 a month)
Year 4: (+ Grace Period) $939 (Total: $2,067) $0 $939 (paid $62 a month)
New Principal Amount: $22,067 $20,000
*Total Repayment Cost: (Including Interest) $27,665 $25,074
**Total Savings: $-524 $524

*This amount changes based on the type of repayment plan. 

**This amount changes based on the type of repayment plan. The savings for Student B averaged between $500 – $600 between the various repayment plans. The total savings is found by subtracting Student B’s repayment cost from Student A’s, and then subtracting the total amount of interest that was paid by Student B in college.

While Student B saved $524 in this example, that potential savings could be somewhat less or quite a bit more depending on the loan amounts and interest rates in play, as well as how quickly the loan is paid off. Also, notice that the amount paid per month by Student B was not very high, and, although the total savings was only $524, Student B graduated college with about $2,600 less to repay than Student A overall.

Overall, there are both pros and cons to making interest-only payments in college:

Pros:

  • It reduces the amount of money paid overall for student loans
  • Allows you to pay off your student loans faster
  • Doesn’t cost too much in college to be feasible

Cons:

  • Requires you to have a job while in college
  • Adds another bill to an already financially stressful period in your life

At the end of the day, choosing whether to make interest-only payments in college has a lot to do with each person’s unique situation. While this tactic has the potential to save you a hefty chunk of money, you also shouldn’t stretch your budget or your time too thin while making these payments. However, chances are good that you won’t regret making interest-only payments in college, while a few years down the road you might regret not making those payments. To set up interest-only payments, contact your loan servicer.

Making Payments

The actual business of making payments isn’t too complicated. Once you select a repayment plan (more on that next), you simply need to decide which method of payment you will setup with your loan servicer. Go to the loan servicer’s website (there’s a handy list above) and create an account to see what options are available to you.

Here are a few tips to optimizing the payment process for you to consider:

  • Change the payment due date for your convenience
  • Set up recurring payments online
  • Elect to receive statements electronically

Repayment Plans

Choosing a repayment plan is a very important part of paying off your student loans. Choosing a plan that is too ambitious could lead to defaulting on your loans, while choosing a plan that stretches out your payments over too long a period of time can result in paying more interest than necessary. A good plan will strike a balance between those two extremes. Utilize the knowledge you gain in this section to choose the plan that’s right for you.

Note: Repayment plans are only available for federal student loans. Private student loans are all different and you must work directly with the lender to establish a plan to repay them.

There are two major types of repayment plans and one outlier:

Traditional: There are three available repayment plans of this type: standard, graduated, and extended. They are traditional in the sense that they do not require an application, and they don’t change based on your personal situation.

Income-Driven: There are four income-driven repayment plans for Federal Direct Loans. Each plan is similar, in that the amount of your payment is affected by how much income you earn, and they all require you to fill out an application to determine if you are eligible. Each plan has slightly different eligibility requirements and term lengths, but they all offer loan forgiveness (more on that in a minute). While not the right fit for everyone, there are many people that can see their payments reduced to a manageable amount under these programs.

These are the four income-driven repayment plans:

  • Revised Pay as You Earn Repayment Plan (REPAYE)
  • Pay as You Earn Repayment Plan (PAYE)
  • Income-Based Repayment Plan (IBR)
  • Income-Contingent Repayment Plan (ICR)

Income-Sensitive Repayment Plan: Only those holding loans from the Federal Family Education Loan (FFEL) program are eligible for this program. The FFEL program has been discontinued and no new FFEL loans have given out since 2010. This plan is somewhat of an outlier, as the FFEL program was funded by a partnership of the federal government and private banks. This means that the exact details of this repayment plan can vary depending on who owns your loan and what your situation is.

For further information contact either your loan servicer (if your loan is owned by the government) or your lender (if your loan is owned by a private bank). If you aren’t sure who owns your loan, you can find out by using the National Student Loan Data System website.

Traditional Repayment Plans

Standard Repayment Plan

The Standard Repayment Plan will save you the most money overall, because it will pay your loan off in the least amount of time (that means you pay less interest). However, this plan will require the highest monthly payments of any of the repayment plans (except the ICR and REPAYE plans under certain circumstances). It is also the default repayment plan that your loan servicer will assign to you. This plan schedules your student loans to be paid off within 10 years (between 10 and 30 for consolidated loans). If you can afford the payments, this plan may be right for you.

Summary:
  • The default payment plan
  • The lowest overall cost
  • The highest monthly payment
  • A 10-year term

Graduated Repayment Plan

If you select the Graduated Repayment Plan, your monthly payments will start out smaller, and then slowly increase as time goes by. Usually, your payments will increase every two years. You will end up paying more overall with this plan because your loan’s principal will decrease more slowly at first which results in more interest being assessed. This plan’s term is typically 10 years (between 10 and 30 for consolidated loans). If you make a lower amount of income now, but expect to gradually increase your earnings as time goes on, this plan could be right for you.

Summary:
  • Payments start small, increase every two years
  • A slightly higher overall cost
  • A 10-year term

Extended Repayment Plan

This plan requires you to pay a lower monthly payment, but extends the term of your loan to a maximum of 25 years. You can select a fixed or graduated payment schedule. This plan requires you to pay much more interest over the life of your loan. Only those that received loans after 1998 and have more than $30,000 in outstanding Direct Loans are eligible for this plan. If you have a high loan balance and need to make lower payments over a longer period of time, this plan may be right for you.

Summary:
  • Payments are spread out over a longer term (up to 25 years)
  • Fixed or Graduated payments
  • Must have $30,000 in outstanding Direct Loans
  • A considerably higher overall cost

Income-Driven Repayment Plans

The four Income-Driven Repayment Plans all share the following features:
  • Payment Amounts: Each plan’s monthly payment is determined, and can change, every year when you recertify your annual income and family size.
  • Recertification: You are required to “recertify” your income each year by filling out another Income-Driven Repayment Plan Application. (Note: There are serious penalties for different plans if you don’t recertify by the deadline.)
  • Loan Forgiveness: Each of these repayment plans qualifies you for Loan Forgiveness after making 20 or 25 years of qualifying payments, depending on the plan. (Note: You may be required by the IRS to pay taxes on any amount that is forgiven.)
  • Interest Benefit: Since your payment could be as low as $0, there may be times when your monthly payment does not cover the interest you owe for that period. In that situation, the government may step in to cover some or all of the remaining interest owed. (Note: the ICR plan does not offer this feature.)Revised Pay as You Earn (REPAYE)

Eligibility Requirements: There are no income restrictions to enter this plan, and all Direct Loan borrowers are accepted. All types of Direct Loans can be repaid using this plan except for PLUS Loans given to parents and consolidation loans repaying Plus Loans made to Parents.

Payment Amount: The amount of your monthly payment under the REPAYE plan is generally 10% of your discretionary income with no cap on the amount that you can pay.

Loan Forgiveness: If all of the loans that you are repaying under the REPAYE plan were received for undergraduate study, then after 20 years of qualifying payments your remaining loan balance will be forgiven. If any of the loans that you are repaying under this plan were used to pay for graduate studies, then you must make 25 years of qualifying payments before receiving loan forgiveness.

Interest Benefit: Under this plan, the government will pay the remainder of the interest owed on subsidized loans for the first three years. For unsubsidized loans, and for subsidized loans after the 3 years of full payment, the government will pay half of the interest owed. Any interest not paid by you or the government can be capitalized if you are removed from the plan for failing to recertify your income by the deadline, or if you voluntarily leave the plan.

Pay as You Earn (PAYE)

Eligibility Requirements: Direct Loan borrowers who were new borrowers on or after October 1st, 2007, and who received a loan disbursement on or after October 1st, 2011 are eligible for this plan if they meet the income requirement of partial financial hardship. All types of Direct Loans can be repaid using this plan except for PLUS Loans given to parents and consolidation loans repaying Plus Loans made to Parents.

Payment Amount: Your monthly payment will generally be 10% of your discretionary income. However, it will never be more than you would pay on the standard 10-year repayment plan (based on what you owed when you entered the PAYE plan).

Loan Forgiveness: Any amount that you still owe after 20 years of qualifying payments will be forgiven.

Interest Benefit: Any of the interest on your subsidized loans that your monthly payment does not cover is paid by the government for the first three years. If you voluntarily leave the plan, or if you no longer qualify to make payments based on your income (when your income determines that your monthly payment is greater than or equal to what you would pay on the standard plan), any interest not paid by you or the government can be capitalized. However, the amount of interest that can be capitalized due to your increased income is limited to 10% of the original loan balance when you entered the PAYE plan.

Income-Based Repayment Plan (IBR)

Eligibility Requirements: All Direct or FFEL Loan borrowers that meet the income requirement of partial financial hardship are eligible. All types of Direct and FFEL Loans can be repaid using this plan except for PLUS Loans given to parents and consolidation loans repaying Plus Loans made to Parents.

Payment Amount: If you are a “new borrower” as of July 1, 2014 (those without any student loan balances when they received a direct loan on or after July 1, 2014), you will generally pay 10% of your discretionary income. If you don’t fall into the “new borrower” category, you will generally pay 15% of your discretionary income. The payment amount will never be more than you would pay on the standard 10-year repayment plan (based on what you owed when you entered the IBR plan).

Loan Forgiveness: If you are a new borrower (defined the same as above), any outstanding loan balance will be forgiven after 20 years of qualifying payments. If you are not a new borrower, your outstanding loan balance will be forgiven after 25 years of qualifying payments.

Interest Benefit: Any of the interest on your subsidized loans that your monthly payment does not cover is paid by the government for the first three years. If you voluntarily leave the plan, or if you no longer qualify to make payments based on your income (when your income determines that your monthly payment is greater than or equal to what you would pay on the standard plan), any interest not paid by you or the government can be capitalized. There is no limit on the amount of interest that can be capitalized.

Income-Contingent Repayment Plan (ICR)

Eligibility Requirements: There are no income restrictions to enter this plan, and all Direct Loan borrowers are accepted. All types of Direct Loans can be repaid under this plan except for PLUS Loans given to parents. Consolidation loans made after July 1, 2006 that repaid PLUS Loans given to parents may be repaid using this plan.

Payment Amount: The amount of the monthly payment when using this repayment plan is the lesser of the following two options:

  • 20% of your discretionary income
  • What you would pay on a fixed 12-year repayment plan multiplied by a percentage that is based on your income (referred to as the “income percentage factor”).

Keep in mind that there is no cap on the monthly amount that you could pay – it could be greater than the amount you would pay under the standard 10-year repayment plan.

Loan Forgiveness: Any amount that you still owe after 25 years of qualifying payments will be forgiven.

Interest Benefit: If your monthly payment amount does not cover all of the interest you owe for that period, you are still responsible to pay for it. In that case, any interest that accumulates is capitalized annually. However, the amount capitalized cannot exceed 10% of the original loan balance when you entered the ICR plan.

Income-Driven Repayment Plans Table

To summarize the major points, take a look at this table that partially illustrates the differences between the Income-Driven Repayment Plans:

Eligibility Requirements Payment Amount Loan Forgiveness Interest Benefit
REPAYE All Direct Loans eligible except PLUS made to parents 10% of discretionary income; no cap on payment amount 20 years(undergraduates); 25 years (graduates) Full payment for 3 years for Subsidized Loans;

50% for everything else

PAYE All Direct Loans eligible except Parent PLUS; “partial financial hardship” required 10% of discretionary income – never more than standard repayment plan 20 years Full payment for 3 years for Subsidized Loans
IBR All Direct and FFEL Loans eligible except Parent PLUS; “partial financial hardship” required 10% of discretionary income for new borrower;

15% for the rest – never more than standard repayment plan

20 years(new borrowers); 25 years(everyone else) Full payment for 3 years for Subsidized Loans
ICR All Direct Loans eligible except Parent PLUS loans (Some Consolidated Parent PLUS loans are accepted) The lesser of:

20% of discretionary income;

12-year Repayment Plan (cost x income percentage)

25 years None

Repayment Plan FAQ’s

How do loan servicers calculate what portion of my income is considered “discretionary income?”

Discretionary income is defined as the difference of your AGI (Adjusted Gross Income) and 150% of the U.S. Department of Health and Human Services (HHS) Poverty Guideline amount for your family size and state.

Note: Under the ICR plan, discretionary income is the difference of your AGI and 100% (rather than 150%) of the HHS Poverty Guideline for your family size and state.

Example: If your AGI is $40,000, your family size is “3,” and you live in one of the contiguous 48 states, your discretionary income is $633.33 a month. (Under the ICR plan, your discretionary income in this example would be $1,533.33 a month.)

[40,000 – (21,600 x 1.5)] / 12 = 633.33

What is considered a qualifying monthly payment?

Generally, a qualifying monthly payment for any of the income-driven repayment plans is a payment made under:

  • Any income-driven repayment plan (whether based on your income or the 10-year Standard Repayment Plan amount)  
  • The 10-year Standard Repayment Plan
  • Any other repayment plan (if the payment amount is at least equal to what the payment amount would be under the 10-year Standard Repayment Plan)

Note: Payments that were deferred due to economic hardship deferment generally count as qualifying payments. However, payments that were not paid while in a period of forbearance do not count as qualifying monthly payments.

How do loan servicers determine if I qualify as having “partial financial hardship?”

To determine if you qualify for a particular repayment plan due to partial financial hardship, loan servicers will determine your potential monthly payment under that plan. If the monthly payment is equal to, or greater than, the monthly payment amount owed on the standard 10-year repayment plan, then you technically don’t have partial financial hardship. Conversely, if the payment you would owe on the repayment plan is lower than the amount owed on the standard plan, then you qualify as having partial financial hardship.

How does my spouse’s income and student loans affect my eligibility and payment amount?

The answer to this question depends on the plan:

REPAYE Plan: Whether you file a joint tax return or not, your spouse’s income is generally factored into your monthly payment amount unless you are separated or you can’t reasonably access your spouse’s income under this plan. If your spouse has eligible student loans also paid using the REPAYE plan, your servicer will usually automatically adjust your payment amount proportionally, based on each spouse’s share of the total loan debt.

PAYE and IBR Plans: If you and your spouse file separate income tax returns, your loan servicer will generally not consider your spouse’s income when determining eligibility or calculating your monthly payments. However, if you file joint income tax returns, your spouse’s income will be factored into eligibility and monthly payments unless you are separated or you can’t reasonably access your spouse’s income.

If you file a joint federal income tax return with your spouse, your loan servicer will use your combined eligible student loan debt when determining your eligibility. It will also automatically adjust your payment amount proportionally, based on each spouse’s share of the total loan debt. If you file separate federal income tax returns, only your student loan debt will be used when determining your eligibility for the plan, and there will be no adjustment to your payment amount, even if your spouse also has student loans.

ICR Plan: If you and your spouse file separate income tax returns, your loan servicer will generally not consider your spouse’s income when determining eligibility or calculating your monthly payments. However, if you file joint income tax returns, your spouse’s income will be factored into eligibility and monthly payments unless you are separated or you can’t reasonably access your spouse’s income.

If your spouse also has eligible student loans, you may choose to repay your loans jointly with the ICR repayment plan. If you choose that option, your servicer will calculate separate payments for each spouse adjusted proportionally to each spouse’s share of the overall debt.

What do I do if my income or family situation changes dramatically before the annual recertification date?

If your income or family situation changes drastically you may, but are not required to, request a different payment amount by submitting a new Income-Driven Repayment Plan request and selecting the option that indicates you are requesting a recalculation due to a change in your circumstances. Keep in mind that this will change the annual date on which your servicer certifies your annual income and family size. You can also elect to wait until your servicer requests your updated annual income and family size to provide any new information.

What loan types can be repaid on which repayment plans?

For a full list of which loans can be repaid on which Income-Driven Repayment Plans, reference the table below:

REPAYE PAYE IBR ICR
Direct Subsidized Loans Eligible Eligible Eligible Eligible
Direct Unsubsidized Loans Eligible Eligible Eligible Eligible
Direct PLUS Loans made to students Eligible Eligible Eligible Eligible
Direct PLUS Loans made to parents Not Eligible Not Eligible Not Eligible Eligible (if consolidated)
Direct Consolidation Loans that did not repay any PLUS loans made to parents Eligible Eligible Eligible Eligible
Direct Consolidation Loans made on or after July 1, 2006, that repaid PLUS loans made to parents Not Eligible Not Eligible Not Eligible Eligible
Subsidized Federal Stafford Loans (made under the FFEL Program) Eligible (if consolidated) Eligible (if consolidated) Eligible Eligible (if consolidated)
Unsubsidized Federal Stafford Loans (made under the FFEL Program) Eligible (if consolidated) Eligible (if consolidated) Eligible Eligible (if consolidated)
FFEL PLUS Loans made to students Eligible (if consolidated) Eligible (if consolidated) Eligible Eligible (if consolidated)
FFEL PLUS Loans made to parents Not Eligible Not Eligible Not Eligible Eligible (if consolidated)
FFEL Consolidation Loans that did not repay any PLUS loans made to parents Eligible (if consolidated) Eligible (if consolidated) Eligible Eligible (if consolidated)
FFEL Consolidation Loans that repaid PLUS loans made to parents Not Eligible Not Eligible Not Eligible Eligible (if consolidated)
Federal Perkins Loans Eligible (if consolidated) Eligible (if consolidated) Eligible (if consolidated) Eligible (if consolidated)

Additional Questions:

Note: For additional information or for answers to questions that were not covered here contact your loan servicer or review the Federal Student Aid Income-Driven Repayment Plans Q&A Sheet.

Summary of Income-Driven Repayment Plans

While Income-Driven Repayment Plans aren’t right for everyone, they can help make your payments more affordable by basing them on your income and family size, rather than on how much you owe. To help decide if an Income-Driven Repayment (IDR) Plan is right for you, take a look at the pros and cons and remember to utilize our Student Loan Calculator to estimate your monthly payments.

Pros

  • Affordability: If you can’t afford your monthly payments, you risk getting behind on them which can lead to default. IDR plans are, by definition, affordable, since they are tied to your income.
  • Loan forgiveness: If you are still carrying a balance on your student loans after 20 or 25 years of qualifying payments, the government will forgive the remainder of your student loan debt.
  • Public Service Loan Forgiveness: Payments you make on any IDR plan will count toward the 120 payments you need to qualify for the Public Service Loan Forgiveness Program.
  • Interest benefit: Three of the plans (the ICR plan excluded) come with an added benefit – the government will pay some or all of the interest you owe each month if your monthly payment doesn’t fully cover it.

Cons

  • Longer repayment period: Since all of the IDR plans are based on a 20 or 25-year term, you could potentially be paying on your student loans for 20 to 25 years after you graduate.
  • More interest paid: Also due to the longer repayment schedule, you could end up paying much more interest than you would have if you paid on the standard 10-year plan.
  • Income Tax: You may be required to pay income tax on any amount that is forgiven under any of the IDR plans.

How to Apply

If you think that an Income-Driven Repayment Plan may be right for you, you can apply either online or with a paper copy (there are certain situations that require a paper copy, but usually online is best). There is a single application for all the Income-Driven Repayment Plans. You can select which plan you are applying for, or you can have your loan servicer decide which you are eligible for, and then place you in the plan with the lowest monthly premium. The second approach is not usually optimal, as there are many other factors to consider other than just which has the lowest monthly payment.

Note: You must fill out a new application and send it into each servicer if you have more than one.

Renegotiating Your Student Loans

There comes a point in time when it might make sense for you to renegotiate your student loans by either refinancing or consolidating them. However, you must exercise extreme caution – especially when refinancing. There are many factors to consider beyond simply finding the lowest interest rate possible.

Consolidating Your Student Loans

If you have multiple student loans, you can get one big loan that repays all of the other smaller loans. This process is referred to as “consolidating.” When you consolidate your student loans you are no longer bound by the terms of your previous loan, rather you are bound by the terms of your consolidation loan.

You can consolidate federal student loans with a Direct Consolidation Loan. You can also consolidate federal student loans or private student loans with a private consolidation loan. However, you cannot consolidate private student loans with a federal Direct Consolidation Loan.

When it makes sense

There are several scenarios in which consolidating your student loans makes a lot of sense and can be very beneficial for you.

Simplifying your finances: For some people who may have 6 or 7 student loans, being able to make a single monthly payment (rather than 7) might be very desirable. Consolidating your student loans isn’t always the best financial decision, but it’s usually the simplest.

Repayment plan eligibility: If you have older FFEL loans (as well as certain other types of federal student loans), you may not be eligible for certain desirable repayment plans. Many times if you choose to consolidate those loans with a Direct Consolidation Loan, you are then eligible for those plans. (See the table above for a complete description of which plans you may be eligible for with a Direct Consolidation Loan.)

Longer repayment period: For federal student loans, your repayment period could go from 10 years to 30 years when consolidating your student loans. This makes your payments a whole lot more affordable every month, but it does mean you will pay a whole lot more interest in the long run. For private student loans, you may be able to get a longer term by consolidating several private student loans, but the same downside remains – a much higher overall cost due to more interest being paid over the longer term.

Securing a fixed rate: Whether you have private or federal student loans that have a variable interest rate, it might be worth it to consolidate those variable rate loans with a fixed rate loan. Typically, variable rate loans start off with an enticingly low interest rate, only to have your rate jump to a much higher interest rate later on. If that’s your situation, you may want to consider consolidating multiple variable rate loans with a single fixed rate consolidation loan.

How it could hurt you

Consolidating doesn’t always make sense. In fact, there are certain situations in which you might lose a whole lot more than you gain by consolidating your student loans.

Eliminating possible repayment strategies: You could lose the ability to utilize several great repayment strategies if you choose to consolidate your student loans. For instance, the Debt Avalanche (paying off the loan with the highest interest rate first) and the Debt Snowball (paying off the loan with the smallest amount first) strategies both rely on your ability to pay extra on certain loans, while making the minimum payment on others. This obviously would not be possible if you consolidate all your student loans.

Losing benefits: You could lose out on some great borrower benefits you may not have considered if you choose to consolidate your student loans. This is especially true if you consolidate your federal student loans with a private loan; there are very few scenarios where that approach pays off in the long run. We’ll cover many of the benefits of federal student loans below, but here’s a few you could lose out on:

  • Loan Forgiveness, Cancellation, and Discharge
  • Deferment
  • Forbearance
  • Income-Driven Repayment Plans

Summary

Student loan consolidation is great for some, but you should understand exactly what you are giving up if you choose consolidation. If you simply cannot afford the monthly payments on your federal student loans, but aren’t eligible for an Income-Driven Repayment Plan due to your loan type, you may want to seriously consider applying for a Direct Consolidation Loan. For a more detailed look at student loan consolidation, read our Student Loan Consolidation Guide.

Refinancing Your Student Loans

Refinancing your student loans simply means that you take out a loan with more advantageous terms to pay back a loan that you currently hold. What this allows you to do, is to get out of a loan that may have a high interest rate or other negative features.

When it makes sense

Refinancing usually makes the most sense with private loans. There are many students that have had to supplement their educational funding with one or more private loans. Many times when a student takes out a private loan, they might not have the best credit resulting in a high interest rate.

Either way, it often becomes advantageous to refinance your private student loans when:

  • You can secure a much lower interest rate due to better credit or the economic climate
  • You can refinance a volatile, variable rate loan into a stable fixed rate loan

When to avoid it

You’ll want to think long and hard before refinancing a federal student loan with a private student loan. Like we talked about earlier with consolidation, there are a lot of benefits you will miss out on if you do.

It’s also important to note that refinancing to a lower interest rate with a much longer repayment term can still cost you more money overall if you only make the minimum payments.

Summary

If you currently hold one or more private loans, it would definitely be worth your while to look into refinancing them to get a better rate. The higher your current interest rate, the greater the chance that you could save some serious money by refinancing. For more information and to help you decide if financing is right for you, read our guide to refinancing your student loans.

How to Pay Off Your Loans as Quickly as Possible

If you’ve already consolidated or refinanced your loans (or if that wasn’t a good option for you), and you don’t want to be paying on student loans for what seems like the rest of your life, there is another option – take an aggressive approach to paying off your loans as quickly as possible. There are several strategies we recommend that can eliminate your student loans a lot more quickly than otherwise possible, all while saving you quite a bit of money.

Before you put an aggressive strategy into play, make sure it makes financial sense.

While paying off your student loans early is a great way to save some money, you want to be sure that you don’t jeopardize your financial stability to do so. Paying your other bills, setting up an emergency fund, and starting to save for retirement might take precedence over paying off your student loans early.

Also keep in mind that it doesn’t make a whole lot of sense to pay a bunch extra on your student loans that have interest rates in the 3% – 5% range, while making minimum payments on a credit card with $5,000 of debt and a 18% interest rate. Remember, student loans (especially federal student loans) are likely to have a more favorable interest rate than other forms of credit (a mortgage or car payment can be an exception).

All that being said, there are some great ways to minimize the amount of interest you pay, thereby minimizing the total overall cost of your student loans.

Identify Your Available Resources

The first thing you need to do is to figure out how much extra cash you can afford to put towards your student loans every month. Even just paying a few extra dollars a month can really add up over time.

To illustrate this concept, let’s suppose there are three loans:

  • Loan A: A $10,000 loan at a 3.8% interest rate with a 10-year term
  • Loan B: A $15,000 loan at a 4.5% interest rate with a 15-year term
  • Loan C: A $20,000 loan at a 5.0% interest rate with a 20-year term
The following table shows how putting a little extra toward your monthly payment can really pay off in the long run:
Monthly  Payment Time Spent (months) Total Cost Monthly Payment Time Spent(months) Total Cost
Loan A: $100 120 (10 yrs) $12,036 $110 (+10) 108 (9 yrs) $11,828
Loan B: $115 180 (15 yrs) $20,655 $135 (+20) 144 (12yrs) $19,454
Loan C: $132 240 (20 yrs) $31,678 $162 (+30) 174 (14.5yrs) $28,177
Grand Totals: $347 20 years $64,369 $407 14.5 years $59,459

Here’s how much we saved:

  • Loan A: We only added $10 to the monthly payment and a whole year was taken off the loan’s term, saving over $200 overall.
  • Loan B: For this loan, we added $20 a month, and we saved three years and $1,200.
  • Loan C: We added $30 a month to the last loan’s payment, and we saved five and a half years and $3,500.

As you can see, even paying just a few dollars extra can get your loans paid off much more quickly and save a lot of money!

It’s also wise to identify other possible savings. Certain lenders or loan servicers will offer small discounts on your interest rate if you do things like set up automatic drafts from your bank account or pay your payment on time every month over a certain period of time.

Choose a Strategy

There are two main strategies to choose from. Which you choose will depend on what is more important to you: seeing immediate results, or saving the most money possible over the long term.

In order to use either of these strategies, you must have:

  • Multiple loans: Most college students have multiple loans from various sources, both federal and private. If that’s your situation, you can take advantage of one of the following strategies.
  • Not consolidated: If you consolidated your loans, the following strategies won’t help you out. However, you can still pay extra and see good savings as we illustrated earlier.

Strategy #1: Prioritize the Loan with the Highest Interest Rate

This tactic, also known as the “Debt Avalanche,” pays down the loan with the highest interest rate as quickly as possible, while making only the minimum payment due on the other loans. Once you pay off the loan with the highest interest rate, you move on to the loan with the next highest interest rate, and so on and so forth.

To see what this looks like, let’s use our three loans from before:

  • Loan A: A $10,000 loan at a 3.8% interest rate with a minimum payment of $100
  • Loan B: A $15,000 loan at a 4.5% interest rate with a minimum payment of $115
  • Loan C: A $20,000 loan at a 5.0% interest rate with a minimum payment of $132

The sum of the three minimum monthly payments is $347. Let’s say that we want to pay $200 extra a month to get these debts down as quickly as possibly. This means a grand total of $547 will be paid every month until all the loans are repaid. Using this tactic we will apply that extra $200 to the loan with the highest interest rate, which is Loan C. (We will use a Debt Avalanche calculator to calculate our totals.)

We will pay off our debt in 3 stages:

Stage 1: We still pay the minimum payment on Loans A & B, but we pay $332 (200 extra) on Loan C. After 70 months, Loan C is repaid and we move on to Stage 2.

Stage 2: In stage two, we no longer have to pay Loan C, so we pay the minimum payment on Loan A, and put the $332 we were paying to Loan C together with the minimum payment from Loan B, and we get a total payment of $447. It then only takes 25 months to finish off Loan B.

Stage 3: In stage three, we simply put our grand total toward Loan A and we have the remainder paid off in just 5 months. Overall we only spent 100 months (about 8 years) paying off the three loans.

The following table shows how much you could save using the Debt Avalanche strategy:
Monthly Payment Time Spent (months) Total Interest Total Cost
Loan A: $100 (Stage 1)

$100 (Stage 2)

$547 (Stage 3)

70 (Stage 1)

25 (Stage 2)

5 (Stage 3)

Total: 100 months

$3,077 $7,000

$2,478

$2,464

Total: $11,942

Loan B: $115 (Stage 1)

$447 (Stage 2)

70 (Stage 1)

25 (Stage 2)

Total: 95 months

$3,828 $8,042 (Stage 1)

$10,787 (Stage 2)

Total: $18,829

Loan C: $332 (Stage 1) 70 (Stage 1) $1,942 $23,077 (Stage 1)
Grand Totals: $547 100 months (8 yrs) $8,848 $53,848

As you can see by comparing this table with the table above, these three loans were paid off 12 years faster, and almost $11,000 was saved overall, simply by investing an extra $200 a month and by paying the loan with the highest interest rate first.

Strategy #2: Pay off your smallest loan first

This Strategy, known as the “Debt Snowball” method, pays the smallest loan off first, then moves to the loan with the next lowest balance, until all the loans are paid off.

For comparison, let’s use the same three loans from before:

  • Loan A: A $10,000 loan at a 3.8% interest rate with a minimum payment of $100
  • Loan B: A $15,000 loan at a 4.5% interest rate with a minimum payment of $115
  • Loan C: A $20,000 loan at a 5.0% interest rate with a minimum payment of $132

We will use the same $200 extra dollars, but this time, we will throw it at the smallest loan, Loan A. (This time we are using a Debt Snowball calculator for our totals.)

We will pay off our debt in 3 stages:

Stage 1: Loans B & C get the minimum payments, but we will put the extra $200 toward Loan A for a total of $300. In just 36 months our first debt will be repaid and we can move on to the other two.

Stage 2: In stage two, we no longer have to pay Loan A, so we pay the minimum payment on Loan C, and put the $300 we were paying to Loan A together with the minimum payment from Loan B, and we get a total payment of $415. In 33 months, Loan B will be finished.

Stage 3: In stage three, we simply put our grand total toward Loan C and after another 34 months it will be repaid. Overall, we only spent 103 months (about 8 and a half years) paying off the three loans.

The following table shows how much you could save using the Debt Snowball method:
Monthly Payment Time Spent (months) Total Interest Total Cost
Loan A: $100 (Stage 1) 36 (Stage 1) $585 $10,585
Loan B: $115 (Stage 1)

$415 (Stage 2)

36 (Stage 1)

33 (Stage 2)

Total: 66 months

$2,664 $4,355 (Stage 1)

$13,242 (Stage 2)

Total: $17,597

Loan C: $132 (Stage 1)

$132 (Stage 2)

$547 (Stage 3)

36 (Stage 1)

33 (Stage 2)

34 (Stage 3)

Total: 103

$6,252 $4,752 (Stage 1)

$4,394 (Stage 2)

$18,210 (Stage 3)

Total: $27,356

Grand Totals: $547 103 months

(8.5 years)

$9,501 $55,538

While the totals are slightly less impressive than those obtained with the Debt Avalanche method, you can see that we still saved over 11 years and almost $9,000 compared to what we would have paid making only the minimum payments.

Which strategy is best?

The Debt Avalanche will always save the absolute most amount of money, but the difference may not be very large between that method and the Debt Snowball method, depending on your situation. If you are simply going by the numbers, the Debt Avalanche method has the slight edge.

Although the Debt Avalanche saves you the most money, there is a psychological effect that should not be discounted. Unless your highest interest rate also happens to be on your smallest debt, it will take a lot longer to pay off the first debt using the Debt Avalanche method. Seeing your first debt being repaid more quickly gives you a psychological boost that can keep you focused and intent on repaying your debt.

This table compares the grand totals from the previous tables:
Monthly Payment Time Spent Total Interest Paid Total Cost
Minimum Payments $347 20 years $19,369 $64,369
Debt Snowball $547 8.5 years $9,501 $55,538
Debt Avalanche $547 8 years $8,848 $53,848

This table shows how closely matched the Debt Snowball and the Debt Avalanche strategies are. For a more in-depth look on which method is superior, read our article on the topic. Safe to say, whichever you choose, it will be vastly superior to simply paying the minimum payment each month.

Summary

After making sure you’re financially stable and are working toward responsible goals, aggressively attacking your student loans is a great way to save a whole lot of the money that you would have paid to your lender due to interest. Identify how much extra you can realistically pay each month towards your student loans, and choose a strategy. Finally, follow through with your plan and you will be well on your way to quickly paying off your student loans.

Forgiveness, Cancellation, & Discharge

If you have federal student loans, you may be able to have some or all of your student loans forgiven or canceled, should certain conditions be met. This section talks about the different ways you can “get out” of paying your student loans.

The following table gives an overview of the various scenarios in which your loans may be forgiven, canceled, or discharged and which types of loans are eligible:
Type of Forgiveness, Cancellation, or Discharge Direct Loans FFEL Loans Perkins Loans
Closed School Discharge Eligible Eligible Eligible
Total and Permanent Disability Discharge Eligible Eligible Eligible
Death Discharge Eligible Eligible Eligible
Discharge in Bankruptcy Eligible Eligible Eligible
False Certification of Student Eligibility or Unauthorized Payment Discharge Eligible Eligible Not Eligible
Unpaid Refund Discharge Eligible Eligible Not Eligible
Teacher Loan Forgiveness Eligible Eligible Not Eligible
Public Service Loan Forgiveness Eligible Not Eligible Not Eligible
Perkins Loan Cancellation and Discharge (including Teacher Cancellation) Not Eligible Not Eligible Eligible
Borrower Defense Discharge Eligible Eligible Not Eligible

Dischargement of Loans

If you think any of these apply to you, make sure to contact your loan servicer (unless otherwise specified) to find out more and to apply for a discharge.

Closed School Discharge

If either of the following applies to you, you may be eligible for a 100% discharge of your student loans.

  • Your school closes while you are enrolled, and you did not complete the program due to the closure of the school. (An approved leave of absence counts as enrollment.)
  • Your school closes within 120 days after you withdraw.

You do not qualify for the Closed School Discharge Program if:

  • You withdraw more than 120 days before the closure.
  • You are completing a comparable program at another school (either by a “teach-out” agreement or by transferring your credits).
  • You have completed all of the coursework for the program, even if you didn’t receive a diploma or certificate.

Note: You may attend a new school and transfer your credits, and still qualify for the Closed School Discharge Program, only if the program of study at the new school is completely different than the program of study at the school that closed.

Total and Permanent Disability Discharge

In addition to removing your responsibility to repay your student loans (Direct, FFEL, or Perkins), the Total and Permanent Disability Discharge also relieves you from your TEACH Grant service obligation. If you are disabled, before you can stop paying your student loans, you must provide proof of your disability to the U.S. Department of Education (ED). ED will evaluate your claims and make a decision as to whether you qualify for discharge of your student loans or TEACH Grant service obligations.

There are three ways to show that you are totally and permanently disabled:

Veterans: If you are a veteran who has experienced a service-connected disability, you can prove your disability by submitting documentation from the U.S. Department of Veterans Affairs (VA) that shows that the VA has determined that you are unemployable due the service-connected disability.

Social Security Disability Insurance: If you are currently receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, you can prove your permanent disability status by providing documentation from the Social Security Administration (SSA) showing that you are:

  • Receiving Benefits
  • Scheduled to have your disability status reviewed within 5 to 7 years from your last disability determination

Physician’s Determination: You can submit documentation from a physician that certifies that you are totally and permanently disabled. The documentation must contain the physician’s certification that you are not able to engage in any substantial gainful activity because of a medically determinable physical or mental impairment.

This impairment must:

  • Be expected to result in death
  • Have lasted for a continuous period of at least 60 months or be expected to last for a continuous period of at least 60 months

You can use this website to apply for a discharge of your student loans due to a total and permanent disability. For more in-depth information go to this Federal Student Aid website.

Death Discharge

In the event of your death, the federal student loans that you still owe will be discharged. If you are a parent who has taken out a PLUS loan on behalf of your student, your loans are eligible for discharge if you, or the student you took out the loan for, dies.

Discharge in Bankruptcy

Filing for bankruptcy does not automatically mean that your student loans will be discharged – you must prove to the bankruptcy court that repaying your loans will cause you or your dependents “undue hardship.” After filing Chapter 7 or Chapter 13 bankruptcy, this will be determined in an adversary proceeding in bankruptcy court. This means that your creditors may be present to challenge your assertion of undue hardship.

There are three requirements that must be satisfied to qualify the repayment of your loans as undue hardship:
  • You would not be able to maintain a minimal standard of living if you were forced to repay the loan.
  • There is evidence that this period of hardship would continue for a significant portion of the loan’s repayment period.
  • You have made “good-faith efforts” to repay the loan prior to filing bankruptcy (typically this means that you have been paying on the loan for a minimum of five years).

Note: If you do not meet every one of those qualifications, your loan will not be discharged. If your loan is discharged, all collection attempts will stop and you will regain eligibility for federal student loans if you had previously lost it.

False Certification of Student Eligibility or Unauthorized Payment Discharge

If you meet one of the following four qualifications, your loan may qualify for discharge.

Ability to Benefit: If your school falsely certified that you were able to benefit from the training it provides, you may be eligible for a discharge from your student loan responsibilities.

If you did not receive a high school diploma or GED, the school must certify that you can benefit from the education it provides. False certification of ability to benefit can occur when a school fails to test your ability to benefit from its training.

Unauthorized Signature or Unauthorized Payment: If the school signed your name on the application or promissory note without your authorization, it endorsed your loan check, or signed your authorization for electronic funds transfer without your knowledge, you may be eligible for a discharge, unless the funds that were signed for were delivered to you or applied to charges owed by you to the school.

Identity Theft: If your loan was falsely certified because you were the victim of identity theft, your loan may be eligible for discharge.

Disqualifying Status: If you are disqualified from employment in the occupation for which you were trained, but the school certified your eligibility, your loan may qualify for discharge. Reasons for your disqualifying status may include:

  • Physical or mental condition
  • Age
  • Criminal Record

Unpaid Refund Discharge

You may qualify for a partial discharge if you withdrew, but the school you attended did not properly refund the money it owed to the lender or the U.S. Department of Education. Only the amount that was not properly refunded is eligible to be discharged. Check with your school to find out how refund policies apply to federal student loans.

Teacher Loan Forgiveness and Cancellation

There are two types of teacher forgiveness programs:

  • Teacher Loan Forgiveness: a program for teachers with Direct or FFEL Loans
  • Teacher Cancellation: a program for teachers with Perkins Loans

Teacher Loan Forgiveness

The Teacher Loan Forgiveness program is designed to encourage students to enter and continue in the teaching profession by forgiving some or all of teacher’s loans after five years of qualifying service teaching at certain schools. The total benefit that can be received is $17,500 . All Direct or FFEL loans (does not include PLUS Loans) qualify for repayment.

The eligibility requirements are as follows:

Borrowed after 1998: To be eligible for this program, you must not have had a balance on a Direct or FFEL loan on October 1, 1998, or on the date that you obtained a loan after October 1, 1998.

Default: If you are in default on any of your loans, you must have made satisfactory arrangements to repay your loan with the loan holder to qualify for this program.

Borrowing time frame: Your loan must have been made before the end of your five academic years of teaching to be eligible for forgiveness.

AmeriCorps: If you were teaching to receive benefits from AmeriCorps, that time teaching cannot count towards the required five years of teaching that qualifies you for Teacher Loan Forgiveness.

Five years of teaching: To be eligible for this program, you must have been employed as a full-time teacher for five complete and consecutive academic years. (One of those years must have been after the 1997-98 academic year.)

Note: Any time spent teaching at an eligible education service agency after the 2007-08 academic year may count toward the required five years of teaching.

School Requirements: To qualify for Teacher Loan Forgiveness, you must have taught for at least one academic year at an elementary or secondary school that meets the following requirements:

  • It is in a school district that qualifies it to receive funds under Title I of the Elementary and Secondary Education Act of 1965.
  • The U.S. Department of Education has determined that more than 30 percent of the school’s total enrollment is made up of children who qualify for services provided under Title I.
  • It is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits.

Note: All elementary and secondary schools that are either operated by the Bureau of Indian Education or operated on Indian reservations by Indian tribal groups under contract with the bureau ,qualify the teacher for the Teacher Loan Forgiveness program, even if they aren’t listed in the above directory.

There are separate benefits and requirements for teachers whose five consecutive and complete years of qualifying teaching service began before or after October 30, 2004.

Before October 30, 2004: If your five years of qualifying teaching service began before October 30, 2004, you may receive up to $5,000 in Teacher Loan Forgiveness benefits if the chief administrative officer of the school at which you were employed certifies that you met either of the following requirements:

  • Demonstrated knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum while teaching full-time at an elementary school
  • Taught in a subject area that was relevant to your academic major while teaching full-time at a secondary school

You may receive up to $17,500 in Teacher Loan Forgiveness benefits if the chief administrative officer of the school at which you were employed certifies that you met either of the following requirements:

  • You were a “highly qualified” full-time mathematics or science teacher in an eligible secondary school.
  • You were a “highly qualified” special education teacher whose main responsibility was to provide specialized education to children who had disabilities. The children you taught must have had disabilities that corresponded to your specific area of special education training, and you must have demonstrated knowledge and teaching skills in the content areas of the curriculum that you taught.

After October 30, 2004: If your five years of qualifying teaching service began on or after October 30, 2004, you may receive up to $5,000 in Teacher Loan Forgiveness benefits if you were a “highly qualified” elementary or secondary school teacher.

You may receive up to $17,500 in Teacher Loan Forgiveness benefits if the chief administrative officer of the school at which you were employed certifies that you met either of the following requirements:

  • You were a “highly qualified” full-time mathematics or science teacher in an eligible secondary school.
  • You were a “highly qualified” special education teacher whose main responsibility was to provide specialized education to children who had disabilities. The children you taught must have had disabilities that corresponded to your specific area of special education training, and you must have demonstrated knowledge and teaching skills in the content areas of the curriculum that you taught.
Highly Qualified Teachers

The standard requirements for being classified as a highly qualified teacher are the following:

  • You must have received full state certification as a teacher or have passed the state teacher licensing examination and must hold a license to teach in that state.
  • You must not have had certification or licensing requirements waived on an emergency, temporary, or provisional basis.
  • You must at least hold a bachelor degree.

New elementary school teacher: An elementary school teacher who is new to the profession, in addition to the standard requirements, must have demonstrated subject knowledge and teaching skills in reading, writing, mathematics, and other areas of the basic elementary school curriculum by passing a state test.

New middle or secondary school teacher: If you are a middle or secondary school teacher who is new to the profession, you must, in addition to the standard requirements, have demonstrated a high level of competency in each subject that you teach by passing a state academic subject test, or by successfully completing any of the following in each area that you teach:

  • A graduate degree
  • Course work equivalent to an undergraduate academic major
  • Advanced certification or credentialing

A teacher who isn’t new: An elementary, middle, or secondary school teacher who is not new to the profession, in addition to the standard requirements, must meet the same applicable standards as a teacher who is new to the profession and demonstrate competency in every subject the teacher teaches by completing a standardized state evaluation.

Inability to Complete an Academic Year

A year that you were unable to complete may still be counted as a “completed year” for the purposes of the Teacher Loan Forgiveness program if you completed at least one-half of the year and your employer considered you to have completed your contract’s requirements for the academic year in regard to salary increases, tenure, and retirement.

Your reason for not completing the year must be one of the following:

  • To re-enroll in college (or another postsecondary education option), on at least a half-time basis, in an area of study that corresponds to your teaching service
  • Because of a condition covered by the Family and Medical Leave Act
  • You are a member of an army reserve force and you were called to active duty for more than 30 days

Teacher Cancellation

If you have a Federal Perkins Loan, you may qualify for the cancellation of 100% of your Perkins Loan if you have served full-time by teaching in a public or nonprofit elementary or secondary school system as one of the following:

  • A teacher in a school with students from low-income families
  • A special education teacher (including teachers that work with infants, toddlers, children, or youth with disabilities)
  • A teacher of mathematics, science, foreign languages, or bilingual education
  • A teacher in a field that has a shortage of qualified teachers in your state as determined by a state education agency

Note: If you are performing a teaching service that qualifies you for cancellation, you may also qualify for deferment while performing that service. Contact the school that holds your loan for more information and to apply for deferment.

Length of service: To qualify for cancellation, you simply have to teach full-time for one full academic year (or two consecutive half years). However, even though the cancellation can add up to 100% of your Perkins Loan, the cancellation takes 5 years, and is completed in three stages:

  • 15% canceled the first and second year
  • 20% canceled the second and third year
  • 30% canceled the fifth year

Summary

To find out more information or the answers to any questions you may have, refer to the Department of Education’s article on Teacher Loan Forgiveness. To apply for Teacher Loan Forgiveness fill out this form. For those with Perkins Loans, contact the school that holds your loan to apply for Teacher Cancellation.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program was created to motivate individuals to find employment with, and continue in, jobs with organizations that provide a public service. The program forgives the remaining balance of a direct loan after an individual has made 120 qualifying payments on that loan while working for a qualifying employer. You must work for a qualifying employer at the time that the forgiveness takes place.

Note: Any loan amount forgiven under the PSLF program is not taxable by the IRS.

Qualifying Employment

Only those who work for certain types of employers are eligible for this program. Payments made toward the necessary 120 payments for loan forgiveness do not count unless they were made while working full-time (30+ hours a week) for a qualifying employer.

Government Jobs

Being employed by any federal, state, local, or tribal government agency qualifies you for the PSLF program. Here are a few other qualifying employers:

  • Public schools of all types
  • Public colleges and universities
  • Public child and family service agencies
  • Public Transportation
  • Housing Authorities

Go here for a list of most of the governmental agencies.

The U.S. Military

Being employed by the U.S. Military (even as a civilian) automatically qualifies you for the PSLF program should you meet the other requirements. This should not be confused with the other loan forgiveness programs offered by individual branches of the military.

Not-For-Profit Organizations

There are two types of non-profit organizations that can qualify you for the PSLF program:

  • Non-profit and tax-exempt organizations under section 501(c)(3)
  • Non-profit organizations that are not tax-exempt

Note: Most non-profits that are tax exempt qualify you for this program. However, there are a few exceptions such as labor unions and partisan political organizations. Also, if you are employed by a qualifying organization, but part of your job involves performing religious duties like religious instruction or proselytizing, you may not be eligible depending on what portion of your time is devoted to religious activities.

A non-profit that is not tax exempt must perform one of the following public services to qualify employees for the PSLF program:

  • Emergency management
  • Military service
  • Public safety
  • Law enforcement
  • Public interest law services
  • Early childhood education (this includes licensed or regulated child care, Head Start, and state-funded pre-kindergarten)
  • Public services for the elderly and individuals with disabilities
  • Public health (including nurses and full-time professionals engaged in healthcare practitioner occupations and healthcare support occupations)
  • Public education
  • Public library services
  • School library or other school-based services

Eligible Loans

Only Direct Loans (including PLUS Loans) that are not in default are eligible for the PSLF program. However, if you have a loan through the FFEL program, you can get a direct consolidation loan which does qualify. It’s important to note, however, that only payments made after the loan is consolidated will count towards the necessary 120 payments.

Qualifying Repayment Plans

To count toward your necessary 120 payments, a payment must be paid under a qualifying repayment plan which includes any income-driven plan, the standard 10-year plan, or any other plan with payments that are at least equal to what you would have paid under the standard 10-year plan.

Note: Since you have to make 10 years of qualifying payments to be eligible for the PSLF program, the standard 10-year plan wouldn’t usually result in any actual loan forgiveness. However, if you made several payments using the 10-year plan, and then switched to an income-driven plan, the payments made under the 10-year plan would count toward your required 120 payments. Because of this fact, Income-Driven Repayment Plans make the most sense if you are seeking to take advantage of the PSLF program.

Qualifying Payments

In order for your payment to count as a “qualifying payment,” it must meet the following requirements:

  • Made after October 1, 2007
  • Wasn’t received more than 15 days after the due date
  • Covered the full amount due that month
  • Paid under a qualifying repayment plan
  • Made while you were a full-time employee of a qualifying company

Note: Your payments do not have to be consecutive. Also, if your required payments are “$0” under an Income-Driven Repayment Plan, you do not have to make a payment and it will still be counted as a qualifying payment for that month.

Summary

To see if your employer qualifies you for this program, you can fill out the PSLF Employment Certification Form. As there can be no PSLF benefits paid out until 2017 (since your payments had to be made after 2007), the application is not yet released. For further information or answers to other questions, read the Federal Student Aid’s PSLF Question and Answer Sheet.

Military Service Loan Forgiveness

Most of us are familiar with the GI Bill and the idea that you can get a good portion of your college education paid for by joining the armed forces. But what if you already have student loans? That’s where the military’s various student loan forgiveness programs come into play.

While those who serve in the military qualify for the Public Service Loan Forgiveness program (if they meet the other requirements), there are additional programs offered by each branch of the military.

Active Duty Health Professions Loan Repayment Program

You are only eligible for this program if you are a fully qualified health professional that is also in active duty. You can receive $40,000 per year (for a total of $120,000 over three years) to help pay off your student loans if you serve on active duty on one of the following corps:

  • Dental
  • Medical
  • Allied Health
  • Nurse
  • Veterinary

If you serve on one of the previous corps while in the reserves, you can qualify to receive $50,000 over three years in loan forgiveness.

Note: One of the benefits of this program is that it’s not just limited to federal student loans – private student loans may be eligible as well. Visit GoArmy.com for more details.

Air Force Judge Advocate General (JAG) Corps Student Loan Repayment Program

While serving your country as a legal professional, the JAG repayment program offers to repay $65,000 of your student loans over three years. While this program can repay a large chunk of your student debt, it’s has a competitive, rigorous selection process. For more information, visit AirForce.com.

Air Force College Loan Repayment Program

Before you enlist in the Air Force, you can sign up for the Air Force College Loan Repayment Program which could forgive up to $10,000 of your current student loan balance. Speak to an Air Force Recruiter for more information.

Note: You may have to give up eligibility for your post-911 GI Bill benefits to take advantage of this program.

Army Student Loan Repayment Programs

There are two basic repayment programs for those serving as active duty military.

Cancellation of Federal Student Loans

This program specifically applies to Federal Perkins Loans. For soldiers in hostile fire or imminent danger pay areas, 100% of your Perkins Loan may be canceled. You must serve in combat situations for at least one year to qualify.

College Loan Repayment Program (LRP)

For soldiers who enlist with student loan debt, the LRP program will repay 33 ⅓% of qualifying student loans or $1,500, whichever is greater, after each year of service for a total of three years (up to $65,000 minus taxes).

Private loans cannot be repaid under this program. Qualifying loans include:

  • Direct Loans
  • FFEL Loans
  • PLUS Loans
  • Supplemental Loans for Students (SLS)

Additional eligibility requirements include:

  • You must agree to a three-year term of service.
  • You must decline eligibility for the Montgomery GI Bill.
  • You must have the LRP guaranteed in writing in your enlistment contract.
  • This must be your first term of enlistment with the Army.
  • You must have a high school diploma and score a 50 or higher on the Armed Services Vocational Aptitude Battery (ASVAB).
  • You must enlist in one of the critical Military Occupational Specialties (recruiters have access to this list which changes quarterly).

For more information on either of these programs go to GoArmy.com.

Navy Loan Repayment Program

The Navy’s version of the Loan Repayment Program (LRP) also repays up to $65,000 of eligible student loan debt to enlisted servicemembers serving their first enlistment in eligible Navy programs. For your loan to qualify for repayment, it cannot be in default.

For more information, consult a Navy Recruiter.

National Guard Student Loan Repayment

If you are determined to be eligible for this program, you can receive up to $50,000 over the course of multiple years. Only federal student loans qualify for repayment. There are different eligibility requirements for non-prior service soldiers, prior service soldiers, and current guard members. For example, take a look at the requirements for non-prior service soldiers.

Eligibility Requirements for Non-Prior Service Soldiers
  • Enlist for a minimum of six years
  • Enlist for a critical skills vacancy (grade of E4 or below)
  • Enlist into a qualifying position in a MTOE or medical TDA unit only
  • Score a minimum of 50 on the Armed Forces Qualifying Test
  • Cannot enlist as a 09R SMP cadet
  • Cannot be enlisting in the RFP or Active First Program
  • Must not enlist as a glossary non-prior service soldier

To see the other eligibility requirements, or for answers to other questions, visit the National Guard website.

Summary

While serving in the military has its disadvantages, it also has some incredible advantages for those that are struggling with a massive amount of student debt. If you are considering joining the military to take advantage of one of these programs, make sure to consider the pros and cons and talk to a recruiter for the most up-to-date information about how to take advantage of Military Student Loan Forgiveness.

Perkins Loan Cancellation and Discharge

You may qualify for a partial or full cancellation of your Perkins Loan if one of the following describes you:

  • A volunteer in the Peace Corps or ACTION program (including VISTA)
  • A Teacher
  • A Member of the U.S. Armed Forces (if you serve in an active combat situation)
  • A Nurse or medical technician
  • Law enforcement or corrections officer
  • Head Start worker
  • Child or family services worker
  • Professional provider of early intervention services

As there is no standard application for a Perkins Loan Cancellation, you must contact the school where you received your loan. For more information, consult the Federal Perkins Loan Cancellation and Discharge Summary Chart.

Borrower Defense Discharge

If you attended college and received federal student loans, and believe that your school defrauded you, misrepresented its services, or in some way violated applicable state law, you may submit a claim to have your student loans discharged.

Example: A situation that might result in a Borrower Defense Discharge, is if a school were to grossly misrepresent its job placement rates (such as the situation with the Corinthian Colleges).

If you believe you were a victim, you may submit a claim via email to FSAOperations@ed.gov. Be sure to include pertinent personal information like your dates of enrollment. Also elaborate on any details about the conduct of the school that you believe violated the state law, including:

  • The state and applicable law
  • Specific acts (including failures to act) of alleged misconduct committed by the school
  • How the alleged misconduct affected your decision to take out a loan to pay to attend the school
  • The injury you suffered as a result of the school’s alleged misconduct
  • All other information or documentation that would help the U.S. Department of Education process the your claim

Note: The Department of Education cannot review claims as a defense against repaying your loan that have to do with injuries not pertaining to your loan, including things like sexual harassment.

If the Department of Education decides to review your case, any federal loans will be placed in forbearance and all collection attempts will cease while the case is being reviewed. However, interest will still accrue during this period.

For more information, review the information available on the Department of Education’s website.

Summary

For all cases of potential forgiveness, discharge, or cancellation, be sure to keep paying your loans until you have received notice that your loans are either in forbearance, or have been completely forgiven. Failure to do so could result in default, which could complicate or eliminate the chance for forgiveness, discharge, or cancellation.

Overall, it’s definitely worth your while to see if you could qualify to have your loan balance partially or completely forgiven. If you don’t yet have a loan, consider the possibilities for loan forgiveness and make decisions accordingly.

When You Can’t Afford Your Payments

Even if you aren’t having trouble affording your payments right now, life is unpredictable, so it’s always wise to know what your options are in the event that you need some extra help. If you are having trouble making your monthly payments, or you anticipate that you will have trouble in the near future, contacting your loan servicer to see what your options are should be your first step. You may be eligible for a period of deferment or forbearance which can help you through a time of difficulty, and prevent your loan from sliding into delinquent or default status.

Note: Only federal student loans are eligible for these benefits. If you have a private student loan and are having trouble making your payments, contact your lender to find out what your options are.

Deferment

Deferment is a period of time during which you are not required to pay your federal monthly student loan payment. Interest still accrues, but, if you have a subsidized or Perkins loan, the government may pay the interest during the period of deferment. If you have another loan type, the interest may be capitalized (added to the principal of your loan), resulting in a higher payment in the future. To request a deferment or to see if you qualify, contact your loan servicer (for Perkins Loans, contact the school you were attending when you received your loan).

If one of the following scenarios applies to you, you may qualify for deferment:
    • You are enrolled at least half-time in college or career school.
    • You are studying in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled.
    • You are experiencing unemployment or an inability to find full-time employment (for up to 3 years).
    • You are experiencing a period of economic hardship including Peace Corps service (for up to 3 years).
    • You have been called to active duty military service during a war, military operation, or national emergency.
    • You have returned home following the conclusion of qualifying active duty military service (for the first 13 months or until you return to enrollment on at least a half-time basis, whichever is earlier), if:
      • you are a member of the National Guard or other reserve component of the U.S. armed forces, and
      • you were called or ordered to active duty while enrolled at least half-time at an eligible school or within six months of having been enrolled at least half-time.

Note: If you are a Direct Loan FFEL Program borrower who has a loan that was first disbursed before July 1, 1993, you may qualify for additional deferments. For more information about this or any other question regarding deferment, contact your loan servicer.

Forbearance

If you can’t make all or some of your loan payments, but you don’t qualify for a deferment, your loan servicer may grant you forbearance. Forbearance can grant a period of up to 12 months in which you are not required to make all or some of your payments. During that period, interest will still accrue on your loans, and if you do not or cannot pay it, the interest will be capitalized (added to the principal of your loan) at the end of your forbearance period.

There are two types of forbearance:

Discretionary: Your lender has the right to decide whether to grant you forbearance due to illness or financial hardship.

Mandatory: Your lender is required to grant you forbearance if one or more of the following conditions applies to you:

  • You are serving in a medical or dental internship or residency program (other specific requirements apply).
  • Your monthly payment for all your student loans is 20% or more of the borrower’s total monthly gross income (additional conditions apply).
  • You served in a national service position for which a national service award was received.
  • You are performing a teaching service that would qualify for Teacher Loan Forgiveness.
  • You qualify for partial repayment of student loans under the U.S. Department of Defense Student Loan Repayment Program.
  • You are a member of the National Guard and were activated by a governor, and are ineligible for a military deferment.

Summary

If you are unable to make your monthly payments, deferment or forbearance might be a beneficial option for you. Keep in mind that applying for an Income-Driven Repayment Plan may also be a great option. The bottom line is that it pays to be proactive – so make sure you contact your loan servicer and find out your options as soon as you become aware that you might have trouble making your federal student loan payments.

Default

To “default” on your loan, means that you failed to make the scheduled payments on your student loan according to the terms of your promissory note (the binding legal document you signed when you made your loan).

If you loan goes into default, you are in serious trouble. In fact, you should always avoid it if at all possible. However, if your loan does go into default, there are steps you can take to “rehabilitate” your loan – all is not lost. Keep reading to find out more about default, how to avoid it, and what you can do to get out of it.

How Default Happens

As soon as you fail to make a payment on time, your loan immediately becomes “delinquent.” After 90 days of not making a payment, loan servicers will report your delinquency to the three major credit bureaus. This can harm your credit, which might mean you have trouble borrowing money to do things like buying a house or car. At the very least, you will pay higher interest rates to other lenders when you demonstrate that you can’t be counted on to make your student loan payments on time.

Your loan will go into default after a total of 270 days have passed since your payment was due (330 days for FFEL Loans that are not paid monthly).

Note: The process listed above only applies to student loans. As individual private loans vary, contact your lender for more information.

The Consequences of Default

If your loan does go into default, there are many serious consequences. It can take years to repair your credit and recover from all the negative effects of default.

The following is a list of the consequences of defaulting on your student loan:
  • The entire balance of your loan and any interest is considered to be due immediately.
  • You lose your eligibility for deferment, forbearance, and Income-Driven Repayment Plans.
  • You are no longer eligible for additional federal student aid.
  • Your loan account is taken from your loan servicer or lender and assigned to a collection agency.
  • The Credit Bureaus will be notified and your credit score will take a big hit.
  • Your federal and state tax refunds may be withheld.
  • Your total student loan debt will increase due to fees charged during the collection process.
  • Your wages may be garnished (this means that the government can direct your employer to withhold a certain amount from your paycheck).
  • The agency that holds your loan can take legal action against you (this may result in your inability to buy or sell assets such as real estate).
  • Federal employees may have up to 15% of their disposable pay withheld by their employer.

Note: If you receive a notification that your loan is in default, and you believe there is an error, contact your loan servicer, lender, or the collection agency to find out why and to correct the error. For instance, if you are attending school at least half-time, you can obtain your school records to prove to the agency that your loan entered default by error.

Avoiding Default

If you take make wise decisions now, you can avoid default altogether. This is always the best course of action.

Before you borrow

Before you take out student loans, make sure you are only borrowing what you absolutely must. Making a budget to calculate living expenses is wise and it can help you not to borrow more than you are prepared to repay later. You also need to make sure you read your promissory note and understand exactly what you are agreeing to repay and when.

As you are paying

Make sure you keep good records while you are repaying your loans. This will help you if there is ever an error and you need to document your record of payments. Since many students take out multiple loans, you need to be sure to keep track of each loan. You can keep track of your federal student loans by logging into My Federal Student Aid.

Contact your loan servicer or lender

The first time you receive notification that your loan is delinquent, be sure to contact your loan servicer or lender. Whether you just forgot to pay, or there was an error, choosing to be proactive is the best way to stay out of default. Your servicer or lender will usually work with you to keep your loan out of default as it costs them money if your loan does go into default.

For federal student loans, there are several Income-Driven Repayment Plans that may make your monthly payments affordable. There are also deferment and forbearance options available in certain circumstances. Your loan servicer can help you decide which you qualify for and what will be best for your situation. Remember: If your loan goes into default, you can no longer take advantage of these options.

Pay what you can

Even if you can’t make your full monthly payment for some reason, it’s always best to pay what you can – even if it’s only a few dollars. This will let your loan servicer or lender know that you are serious about making your payments and will make them more likely to work with you.

Getting out of Default

If you have a federal student loan that has entered into default status, there are several ways you can get your loan out of default. Depending on how quickly you act and which option you choose, you may be able to avoid some or most of the negative consequences of default. Important: Ignoring your defaulted loan is never a good option.

Note: The following options apply only to federal student loans. If you have a private student loan, contact your lender or collection agency to see what your available options are.

Repayment in Full

The first option, repaying your loan in full, is not usually viable for most borrowers. However, it is still a legitimate way to get your loan out of default. If this is a possibility for you, consider using it as it’s the quickest and easiest way to resolve a defaulted loan.

Loan Rehabilitation

Direct or FFEL Loans

To rehabilitate a Direct or FFEL Loan you must, agree in writing to make nine payments. The payments must not be more than 20 days after the due date, and be made within a period of 10 consecutive months. Under your loan rehabilitation agreement, your monthly payment will generally be 15% of your discretionary income (the payment could be as low as $5).

Note: Involuntary payments (such as wage garnishment) do not count toward your nine required payments. Also, involuntary payments could continue to be withheld until your loan is actually out of default.

Federal Perkins Loan

To rehabilitate a defaulted Perkins Loan, you must make a full monthly payment, within 20 days of the due date, for nine consecutive months. The payment amount is determined by the current owner of the loan (either your original school, or the Department of Education’s Default Resolution Group).

Benefits of Rehabilitation

If you rehabilitate your loan, the “default status” of your loan will be removed from your credit history (there still could be some residual damage, however, but the impact will be much less), and you will be eligible for the benefits of federal student loans you lost access to.

Note: You can only rehabilitate a loan once.

Loan Consolidation

The final option for getting your loan out of default has to do with consolidating your defaulted loan into a Direct Consolidation Loan. You must do one of two things before you can consolidate your loan.

Option #1: Agree to repay the new loan under an Income-Driven Repayment Plan.

If you choose this option, you must select one of the Income-Driven Repayment Plans that you qualify for, and provide documentation of your income.

Option #2: Make three full payments.

The payments must be voluntary, consecutive, and on-time to count. If you choose this option, you are eligible to repay your Direct Consolidation Loan under any repayment plan you want.

After your defaulted loan is consolidated, you are again eligible for benefits such as deferment, forbearance, and loan forgiveness. You will also regain your ability to secure further federal student aid.

Note: The loan consolidation method does not remove the record of the defaulted loan from your credit history.

Summary

At the end of the day, if your loan defaults, you can’t go back and change the past. You can, however, take steps to get your loan out of default, or better yet, avoid it in the first place. Being proactive and talking to your loan servicer or lender is always the first thing you should do, and the best way to minimize the consequences of having a delinquent or defaulted loan.

For more information about resolving federal loans that are in default, refer to this resource.

Resolving Disputes

If you notice a problem with your student loan, it’s important to take the right steps to fix it as quickly as possible. Prompt, calm communication can go a long way to resolving any disputes that might arise.

Identify Your Problem

The first step is to understand what the cause of your problem is. If it’s payment related, make sure you review your payment history and your payment records to determine where the discrepancy lies. If it’s credit related, consider looking at your credit report.

Contact Your Loan Servicer

If you have a problem with a federal student loan, contact your loan servicer. If your problem is with a private loan, contact your lender. Here are a few tips to help you resolve your dispute:

  • Keep careful notes of your conversations, including the date, the full name of the person you spoke to, and as many details of the conversation as possible.
  • Stay calm. Remember that it’s most likely not the person you are talking to that is the source of your frustration.
  • Be patient. As frustrating as these things can be, disputes can often take weeks or months to resolve and require you to have multiple conversations.
  • Always keep as much documentation as possible. This will help establish your claims and keep it from being your word against theirs.

When to Involve a Third Party

If you can’t resolve an issue after a significant period of time and a lot of effort, it might be worthwhile to involve a third party. After making sure you’ve done everything you can, find out what the mediation process involves from the party that holds your loan. If your problem is with a federal student loan, you can contact the Ombudsman Group. If the dispute is serious enough (such as wrongful default), you may want to contact a lawyer to aid in the resolution of your problem.

Take Action

If you have a lot of student loan debt, you may be feeling overwhelmed and like you have nowhere to turn. Take heart! There are a lot of options out there to help you pay off your student loans as quickly and painlessly as possible. Whatever you do, be proactive and informed – your bank account will thank you.