Repayment & Debt Management
Manage Your Debt Wisely
With careful planning and consideration, you can responsibly pay on your loans.
The federal government offers advice and tools to help you manage your federally-funded student loans.
Sample Repayment and Repayment Types
You can use the following table as a reference to estimate your monthly loan repayment amount assuming that your borrow the Federal Direct Subsidized and Unsubsidized Loan for all 4 ½ years you are enrolled at Kettering University as a dependent student using the Standard Repayment Plan. You should use this as a reference only. For more specific repayment examples go to the U.S. Department of Education's Direct Loan Program.
|
Federal Direct Subsidized Loan |
Federal Direct Subsidized Loan |
|
| Grace Period | 6 months | 6 months |
| Repayment Term | 10 years | 10 years |
| Interest Rate | 6.8% | 6.8% |
| Principal $ Borrowed | $21,750 | $9,000 |
| Estimated Monthly Payment | $250.30 | $103.57 |
| Estimated Total (Principal + Interest) | $30,036 | $12428.40 |
Repayment Types
Standard Repayment Plan
Eligible Loans
- Direct Subsidized
- Direct Unsubsidized Loans
- all PLUS loans
Monthly Payment and Time Frame
-
Payments are a fixed amount of at least $50 per month.
-
Up to 10 years
Comparison
- You'll pay less interest for your loan over time under this plan than you would under other plans.
Graduated Repayment Plan
Eligible Loans
- Direct Subsidized
- Direct Unsubsidized Loans
- all PLUS loans
Monthly Payment and Time Frame
- Payments are lower at first and then increase, usually every two years.
- Up to 10 years
Comparison
- You'll pay more for your loan over time than under the 10-year standard plan.
Extended Repayment Plan
Eligible Loans
- Direct Subsidized
- Direct Unsubsidized Loans
- all PLUS loans
Monthly Payment and Time Frame
- Payments may be fixed or graduated.
- 12-25 years
Comparison
Your monthly payments would be lower than the 10-year standard plan but you'll pay more for your loan over time than under the 10-year standard plan.
- If you are a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. If you are an FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans.
- If you have borrowed through a Direct Loan program and through FFEL your qualification is based on the loan amounts for each. For example, if you have $35,000 in outstanding FFEL Program loans, and $10,000 in Direct Loans, you can use the extended repayment plan for your FFEL Program loans, but not for your Direct Loans.
- For both programs, you must also be a new borrower as of Oct. 7, 1998.
Income-Based Repayment Plan (IBR)
Eligible Loans
- Direct Subsidized
- Direct Unsubsidized Loans
- All PLUS loans made to students
- Consolidation Loans (Direct or FFEL) that do not include consolidated PLUS loans made to parents
Monthly Payment and Time Frame
- Your maximum monthly payments will be 15 percent of discretionary income, the difference between your Adjusted Gross Income and 150% of the poverty guideline for your family size and state of residence (conditions apply).
- Up to 25 years.
Comparison
- Your monthly payments will be lower than payments under the standard plan but you'll pay more for your loan over time than you would under the 10-year standard plan.
- You must have a partial financial hardship to qualify for this repayment option. If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments and 25 years have passed, any outstanding balance on your loan may be canceled.
Income-Contingent Repayment Plan
Eligible Loans
- Direct Subsidized
- Direct Unsubsidized Loans
- Direct PLUS Loans made to students
- Direct Consolidation Loans
Monthly Payment and Time Frame
- Payments are calculated each year and are based on your annual income,* family size, and the total amount of your Direct Loans for up to 25 years.
*If you are married, your spouse's income is included.
Comparison
- Your monthly payments will be lower than the standard repayment plan but you'll pay more for your loan over time than under the 10-year standard plan.
- If you do not repay your loan after 25 years under this plan, the unpaid portion will be forgiven but you may have to pay income tax on the amount that is forgiven.
Pay As You Earn Repayment Plan (PAYE)
Eligible Loans
- Direct Subsidized and Unsubsidized Loans
- Direct PLUS loans made to students
- Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents
Monthly Payment and Time Frame
- Your maximum monthly payments will be 10 percent of discretionary income.
- Payments are recalculated each year and are based on your updated income and family size.
- If you're married, your spouse's income or loan debt will be considered only if you file a joint tax return.
- Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years.
Comparison
- You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.
- You must have a high debt relative to your income.
- Your monthly payment will never be more than the 10-year Standard Plan amount.
- You’ll pay more over time than under the 10-year Standard Plan.
- You may have to pay income tax on any amount that is forgiven.
- Good option for those seeking Public Service Loan Forgiveness (PSLF).