If your federal student loan payments are becoming difficult to make, there are some payment plans and options you may want to consider. Comparing student loan options can reduce stress and lower your student loan payments.

This May, the Committee of Education and Labor explained some new changes:

Beginning July 1, for the first time, students and borrowers will be able to participate in a new Income-Based Repayment program that caps their monthly loan payments at just 15 percent of their discretionary income.

Any current or future borrower whose loan payments exceed 15 percent of their discretionary income will be eligible. After 25 years in the program, borrowers’ debts will be completely forgiven.

For those those who have been laid off or have seen a huge decrease in their family income, here are some options to consider with your federal student loans:

• Choose another repayment plan. You can ask from a graduated payment plan where the initial 24 payments are lower and slowly increases. As mention above, an income based payment plan can also ease the burden while you get back on your feet. 
• Apply for a deferment. This option allows you to temporarily stop making payments on your student loan(s). You have to speak with a customer service representative to see if you qualify.
• Apply for a forbearance.  You can temporarily make smaller student loan payments. 

You can change your payment plan online at contact Federal Direct Loans. With deferments and forbearances, please call Federal Direct Loans at (800) 848-0979.

Put your education to good use and learn about your options.

Student Loan Interest Rates Change July 1, 2009

You may also want to be aware that student loan rates may drop quite a bit and consolidating your loans may be a way to lower your payments. Fin-Aid mentions that for loans from July 1998 to June 2006, you may see rates as low as 2.48% based on their projections.

It wouldn’t hurt to check in July what the interest rates will be. These are for federal student loans, so they do not apply to private loans. 

How Much Could You Save on Student Loans?

FastWeb ran the numbers on the lower rates and here’s what they calculated:

For example, if you had a $20,000 Stafford loan with standard 10-year repayment plan and a 6.8% interest rate, you could expect to pay $230 a month and $7,619 over the life of the loan in interest.

But, if you locked in the 2% interest rate available after July 1, you’d pay $184 a month and only $2,083 in interest over the life of the loan. That’s a 20% lower monthly payment and total interest savings of $5,536 (73%).

How About You?

I hope this helps some as they are trying to lower their bills.

Have you already consolidated your loans? Have you received a deferment or forbearance? 

Photo Credit:  jennifercw 

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