Repaying Your Student Loans

Repayment Options

In order to choose the repayment plan that is right for you, it’s best to first understand your repayment options. Listed below are some of the most common repayment plans. Contact a loan advisor at 855-986-2255 to develop a repayment plan that best fits your individual needs.

Payment in Full

If you can afford to pay off your student loan balance in full, you are encouraged to do so as soon as possible. This can save you interest and other fees. Please contact your student loan advisor for your total loan payoff amount.

Standard Repayment

If you have not chosen a repayment plan, your lender will automatically place your account into the standard repayment plan. This is the best choice and the least expensive repayment option in terms of the total interest cost to you. Under the standard repayment plan, you pay a fixed monthly payment over a period of up to 10 years. The Department of Education has a student loan repayment calculator that can help you estimate your monthly standard federal student loan payments.

Graduated Repayment

If you are unable to meet the obligations under the standard repayment plan, a graduated repayment plan may be right for you. This plan gives you up to 10 years to repay your federal student loans. For the first two years, your payments are low, but large enough to cover the cost of the accruing interest; after the first two years, your monthly payments increase about every two years, with payments always large enough to cover the cost of the accruing loan interest.  Interest costs are higher under this repayment plan compared to the standard repayment plan, but it may be the right option if you have limited income and expect to have an increased income in the future.  The Department of Education’s graduated repayment calculator can help you determine your monthly graduated loan payment.

Income-based Repayment (IBR)

The Income-Based Repayment plan (IBR) may be one of the most affordable loan repayment plans, but not everyone qualifies for it. If your loan payments are more than 15% of your “discretionary” income, you may qualify for this repayment option. Under an IBR, your monthly payments may be less than the accruing interest, and you may qualify to pay back your loans over a period of up to 25 years. If you owe a balance after 25 years, the remaining balance of your outstanding federal student loans will be forgiven. The Department of Education’s IBR calculator can help you determine your eligibility and estimate your monthly IBR student loan payment.

Public Service Loan Forgiveness (PSLF)

You may qualify for public service loan forgiveness (PSLF) if you are employed with the government or a nonprofit 501(c)(3) organization. To qualify for PSLF, you must make qualifying payments for a total of 10 years (120 monthly payments). After those 10 years of eligible employment and qualifying payments, any remaining debt will be forgiven. If you qualify for PSLF, we recommend you complete the Employment Certification Form annually and submit it to your SUPPORT+ student financial services advisor, as well as a loan servicer.

Default

Consequences of Default

The U.S. government views repaying your federal student loans as a serious obligation. Should you default on your student loans, or not repay your student loans, you may receive one or many severe consequences. Our SUPPORT+ team of loan advisors is available to help you develop a repayment plan that allows you to repay your loans and avoid default and its consequences:

• Federal Financial Aid Ineligibility
  If you wish to return to school, you will not be eligible for any additional federal student aid until you make arrangements to repay your defaulted student loan.
• Income Tax Refund Seized
  Your federal income tax refunds and other federal payments may be seized to satisfy your outstanding federal student loan debt.
• Wage Garnishment
  Your federal loan servicer may notify your employer to withhold a portion of your pay, which will be applied to your unpaid student loan balance. This also applies to social security benefits.
• Additional Cost
  Outstanding interest is capitalized and collection fees may be added to your outstanding federal student loan debt, resulting in a loan balance higher than the amount borrowed.
• Lifetime Debt
  Your unpaid student loan debt will remain with you until you pay it back. Collection efforts continue until you resolve your defaulted student loan.
• Credit Rating Decline
  Defaulted federal student loans are reported to credit bureaus, causing you, the borrower, to sustain long-term damage to your credit rating. This will likely make it difficult for you to obtain other types of consumer credit, such as a home mortgage or a car loan.
• Lawsuit
  Your loan servicer or the federal government may file a lawsuit seeking a civil judgment against you for the amount you owe.
• Licensure Ineligibility
  If you’re applying for a professional license from your state, your loan servicer may be able to prevent licenses from being issued or revoke current licenses until you start paying your student loans.

Other Options

Although loan consolidation may result in lower monthly payments, and possibly a lower fixed interest rate, you are likely to pay more total interest when you consolidate your student loans because you extend your repayment period by making smaller monthly payments over a longer period of time. The loan consolidation does allow you to bundle multiple federal student loans into one new loan with the benefit of a convenient single monthly loan payment. Loan consolidation is not the best choice for every borrower. Speak with a loan advisor or your federal loan servicer for additional information. The Department of Education has a loan consolidation calculator that can help estimate your monthly loan consolidation payment.

In-School Deferment

If you have outstanding student loans and choose to return to school and are actively enrolled at an eligible institution at least half-time, you may qualify for an in-school deferment. In-school deferment will postpone your federal student loan payments while you are attending school. If you return to school, be sure to notify your federal student loan servicers or your SUPPORT+ student loan advisor to ensure your loans are moved to in-school deferment status.

You do have the option of continuing to pay your monthly student loan while they are in deferment and you are attending school, and we encourage you to do so. Paying your monthly federal student loan payments while you are in school will reduce your outstanding loan debt after you graduate.

Military Deferment

If you are called to active duty in the U.S. Armed Forces, you may qualify for a deferment. To determine if you qualify for a military deferment, please contact your SUPPORT+ loan advisor and your federal student loan servicer.

Loan Servicers

Federal Student Loan Servicers

NOTE: Rasmussen College does not endorse any financial institution; the institutions listed herein are resources only and any lending through these financial institutions will be completed by the student at the student’s sole discretion.

Resources

Videos

Choosing a Student Loan Repayment Plan
Rasmussen College Student Economics Business Analyst, Angel Patel, compares standard, graduated, and income-based repayment options.

Subsidized Vs. Unsubsidized Student Loans
Rasmussen College Director of Student Economics, Adam Steinbrunner, highlights the differences between subsidized and subsidized loans. 

What is Student Loan Deferment?
Rasmussen College Student Economics Business Analyst, Angel Patel, explains deferment and provides an example.

Federal Loan Resources

Studentloans.gov: Helpful tools regarding your federal student loans

Loan repayment plan calculator: Estimate your loan payments under different payment plans

Student Aid on the Web: The Department of Education provides answers to commonly asked questions about student loan repayment.