Federal and Alternative Student Loan Repayment

It’s not easy to pay student loans when jobs for recent college grads are on the decline. It may take you several months to find a job once you graduate, and even then the salary may not be what you expected. Here is some information that may help to successfully repay student loans:

Federal student loan repayment

Deferment & Forbearance – Federal loans come with deferment and forbearance options that you can exercise under various circumstances, including during times of economic hardship. Both of these options allow you to temporarily postpone or reduce your payments.

Repayment Plans – Various federal loan repayment options may be available. Some of the most common ones include Standard, Graduated and Income-Sensitive. If you have difficulties with repayment of your federal student loans, consider speaking with your lender or servicer about switching to a different repayment plan.

Alternative student loan repayment

Deferment & Forbearance – Each lender decides whether they will offer deferment and forbearance options to postpone payments during times of economic hardship. For example, the CLC Alternative Loan offers 2 years of in-school deferment and up to1 year of lender option forbearance.

Repayment Plans - Each lender can create its own repayment terms and programs for alternative college loans. Some alternative college loans may have longer payment terms (up to 30 years). Remember that although your monthly payments may look lower and easier to manage, you will pay significantly more in interest on a 30-year term than you would on a 10-year term.

College Loan Corporation offers existing borrowers two alternative student loan repayment plans: Standard and Graduated. The Standard alternative student loan repayment program features the same payment each month throughout the term of your loan. If you qualify for a Graduated repayment plan, this option allows you to make interest-only payments for two years. Your loan is then re-amortized for the remaining term which will result in higher monthly payments.