Most college students today have significant loan debt when they graduate. For federal student loans, the government offers several flexible repayment plans that can make it easier to pay back the debt:
Consolidation and Direct Loans
Under the Student Loan Reform Act of 1993, you may have the option to consolidate your existing student loans into a single direct loan from the government. This plan offers you a more flexible repayment schedule with the same interest rate.
If your original lender refuses to give you an "income-sensitive" repayment option (a plan that adjusts the monthly payments for the loan's capital, but not the interest, to your annual income), you may be eligible for a direct government loan.
With a direct government loan, the monthly payments are contingent upon your income and withdrawn from your wages. As your wages increase, the percentage withdrawn from your pay will also rise, allowing you to pay off your loan more quickly.
For more information about federal student financial aid programs, contact the Federal Student Aid Information Center at 1-800-433-3243.