Repayment Options

When it comes time to repay your Federal student loans you'll want a monthly payment that fits your budget. We can help you find the right payment plan, ways to save during repayment, and options when you can't afford your payments.

Repayment Plans

• Standard Repayment: Monthly payments include both principal and interest and are fixed over the life of the loan (a maximum of 10 years). This plan has the highest monthly payment amount, but the lowest total interest cost. Estimate your monthly payments under this plan using the Great Lakes Account Payment Plan Estimator tool.


• Graduated Repayment: This repayment option allows students to have a lower monthly payment for the first few years and then an increased monthly payment thereafter. For example:
  • For the first 2 years monthly payments will be interest-only.
  • For the next 3 years payments will be slightly higher and include interest and some of the principal.
  • For the remaining life of the loan payments will be made on a standard repayment plan.
  Estimate your monthly payments under this plan using the Great Lakes Account Payment Plan Estimator tool.


• Income Sensitive Repayment: Your monthly payment amount is tied to a fixed percentage of your gross monthly income. Your payments must be greater than or equal to the interest that accrues. You must reapply every year (up to 5 years) and payments are adjusted annually to reflect changes in your income.


• New! Income Based Repayment: This new repayment plan will be available beginning July 1, 2009 for all Stafford loan borrowers. It will cap your monthly payments at 15% of the difference between your adjusted gross income and 150% of the applicable poverty level, taking into consideration your income, family size, and your total amount borrowed. As with the Income Sensitive Repayment plan, your monthly payment amount is adjusted annually based on changes in your income and family size. Unlike the Income Sensitive Repayment plan, there is no minimum monthly payment amount, and therefore, the minimum monthly payment amount can be lower than the monthly interest charges. The maximum repayment term is 25 years. After 25 years, any remaining debt will be forgiven.

When You Need a Lower Payment

• Extended Repayment: If you have an outstanding balance of principal and interest in FFELP loans totaling more than $30,000, then you may qualify to extend your repayment term up to 25 years. This will help you significantly lower your monthly payments by stretching them out over 25 years instead of the standard 10 years. Keep in mind, when you lengthen your repayment term you will pay more interest, increasing the total cost of your loan. Estimate your monthly payments under this plan using the Great Lakes Account Payment Plan Estimator tool.


• Consolidation: If you do not qualify for extended repayment because your total loan balance is less than $30,000 you may be able to consolidate your loans. A Federal consolidation loan allows you to combine all of your individual Federal student loans into a single loan with one monthly payment. It also allows you to stretch out your repayment term longer than 10 years to help your lower your monthly loan payment. In order to consolidate your loans you should contact the Direct Loan program. Get more info about Federal consolidation loans.

When You Need to Postpone Payments

• Deferment: A deferment is a way to temporarily postpone your student loan payments. If you are approved for a deferment, your loan principal will be deferred (and your subsidized loans will not accrue interest) during the deferment period. You must meet specific criteria as set by the Federal government to qualify for a deferment. For deferment criteria visit the Federal Student Aid website.


• Forbearance: Forbearance is another way to postpone your loan payments. If you do not qualify for a deferment, you may qualify for a forbearance which has less qualifications. If you are approved for a forbearance, only your loan principal will be deferred. The interest on your loans will still accrue and can be paid monthly or added to the loan balance when the forbearance period ends. For forbearance criteria visit the Federal Student Aid website.

Ways to Save in Repayment

• Discounts: By having your monthly student loan payments automatically deducted from your checking or savings account, Student Lending Works may reduce your interest rate by 0.25% - just contact us for details.


• Early Payoff : By paying your Federal student loans off early you'll pay less interest and lower the total cost of your loans. Plus, there is no penalty for paying your Federal student loans off early.


• Tax Benefits : You may be able to deduct the student loan interest you pay up to $2,500 per tax return. For more information on qualifications and calculating your student loan interest deduction go to IRS Publication 970, Tax Benefits for Education or contact your tax professional.