Students who choose to pay for school through federal student loans need to pay them back with interest.
Doing so might be stressful and complicated. After understanding the process of repaying student loans, you will be able to choose from several types of programs that will help you complete the payment and be free of debt.
If you have graduated from college with the help of federal student loans, it is important to understand the Loan Repayment Process. This guideline will show you who to contact for repayment as well as the options that are available to you when reimbursing your loans.
If you need to make lower monthly payments theIncome-Based Repayment (IBR) may be right for you. This plan helps you manage your loan debts by reducing the monthly payments, if your student loan debt is higher than your income.
Under this plan, your monthly payments are:
- based on your income and family size;
- adjusted each year, based on changes to your annual income and family size;
- usually lower than they are under other plans;
- never more than the 10-year standard repayment amount; and
- made over a period of 25 years.
The State of Texas and the Federal Government offer different types of Loan Forgiveness programs for students interested in careers as teachers, in health and public service. If you work in one of these fields or plan to work in one of these fields, some of these student loan forgiveness programs may be right for you.
The Texas Student Loan Forgiveness Programs consist of several programs offered by the State of Texas. These programs are mainly in the education, nursing and other health professions fields.
The Public Service Loan Forgiveness (PSLF) allows you to cancel the remaining balance of your direct loans (a federal student loan that allows you to combine one or more federal student loans into one new loan) after serving full time at a public service organization for at least 10 years while making 120 qualifying monthly payments.
If you are a teacher or planning to be a teacher, you could also qualify for Loan Forgiveness Programs. There is one State Loan Forgiveness Program for Teachers and two types of Federal Loan Forgiveness Programs for Teachers:
- The Teach for Texas Loan Repayment Assistance Program recruits teachers for an academic year in fields and communities having a shortage of teachers in Texas. The maximum amount of student loans that can be forgiven is $20,000. You cannot serve for a maximum time of five years. Designated shortage campuses and fields change annually.
- The Federal Teacher Loan Forgiveness recruits full-time teachers for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families. The maximum amount of student loans that can be forgiven is $17,500.
- Federal Perkins Loan Teacher Cancellation cancels your Federal Perkins Loan (a federal student loan, made by your school for undergraduate and graduate students who demonstrate financial need) of up to 100 percent if you teach full-time at a low-income school, or in certain subject areas.
Search for schools that qualify for the Federal Loan Forgiveness Programs:
Teacher Cancellation Low Income Directory.
You can’t find your school? Use AskTED to find its official name!
You can also earn money to repay your college loans if you plan to pursue a career in Public Service areas such as AmeriCorps, Peace Corps, National Health Service Corps, and Teach for America.
AmeriCorps is a one year federal government program that gives you the opportunity to serve in your community. Students receive an Education Award of up to $5,550 to pay for additional college or graduate school courses, fund further education or pay off existing student loans. There are three types of programs in AmeriCorps; State and National, National Civilian Community Corps (NCCC), and the Volunteers in Service to America (VISTA).
Peace Corps is a two year federal government program that gives you the opportunity to serve abroad in poor communities. Professionals or students receive deferment and cancellation of student loans and $7, 425 to help with the transition with life back home. You also get professional and career benefits. There are three types of programs in Peace Corps; Peace Corps Response, Grad School, and World Wise Schools.
National Health Service Corps is a federal government program that gives you the opportunity to primary health care services in underserved communities during a maximum period of four years. Students will receive scholarships or three loan repayment options with continued service. The three loan repayment options are; NHSC Loan Repayment Program, Students to Service Loan Repayment Program, and State Loan Repayment Program.
Teach for America is a non-profit organization that gives you the opportunity to teach in low-income communities for at least two-years throughout the United States. Students receive an Education Award of up to $5,550 to pay for additional college or graduate school courses, fund further education or pay off existing student loans.