If you have loans through the Federal Family Education Loan (FFEL) Program and need to make lower monthly payments, the income-sensitive repayment plan could be your best option. This plan is available to the following federal student loans:
- Subsidized and Unsubsidized Federal Stafford Loans
- FFEL PLUS Loans
- FFEL Consolidation Loans
This repayment plan is intended for borrowers who make less money, and your monthly repayment amount will change based on your annual income. The repayment period can last up to 10 years. When thinking about this plan, it is important to consider that there is no forgiveness option. This means that if you have lower payments at the beginning of your loan, they will eventually rise so that you can pay off your loan within the 10 years. If you continue experiencing financial difficulties, you may want to think about choosing another repayment plan.
You will need to contact your lender to determine your eligibility for this plan. If your FFEL loans are owned by the U.S. Department of Education, you can look up your loan servicer using the National Student Loan Data System.
Remember, if you have problems making payments on your loans, you can change your repayment plan one time each year. Do not ignore payments because you cannot afford them, or else you will run the risk of defaulting, which will negatively affect your credit history for years. Contact your loan provider or servicer to learn about all your repayment options.