Living Frugal
Student Debt Options







Yes, there are student debt options.

These days, it's tough to pay those student loans when everything else in your world is falling down around you. If you've recently graduated from college, you know first hand how hard it is to get a job. Unfortunately, those Federal student loans are real loans that you have to pay back regardless of whether or not you received the education or job you expected.


However, there are student debt options instead of defaulting.


Depending upon your income, you may be eligible for an Income-Based Repayment Program (IBR). If you qualify, your monthly payments are based on your income and the payment plan is extended to 25 years instead of the typical 10 year repayment plan. If you have a family, this is also taken into consideration when it is determined how much your payments will be each month.

















Could I be eligible?
IBR is only available for federal loans. It is not available if your loan is private.


The loans that the IBR covers are:

  • Grad PLUS Loans
  • Direct Stafford Loans
  • Consolidation Loans (Federal Family Education Loans, FFEL, combined with direct loans)

If you are turned down for IBR, you can and should apply every year if your financial situation warrants it and you need an extension or help with payments. If you make payments on time, the loan is forgiven after 25 years. IBR is for those who can't make the financial commitment to pay the payments on the typical 10 year payment plan.


The IBR minimum payment is $50.00 and most times higher. The payments are based on your income. However, loan payments are capped at 15% of your income.


If defaulting on your federal loans has crossed your mind, don't do it. Take every possible step to prevent this from happening. Reach out to the Department of Education and explain your situation and see what your student debt options are. If you aren't eligible for any programs, work with the department to avoid a default.



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