Direct Loan Repayment

   DIRECT LOAN REPAYMENT

Standard Repayment Plan:

The amount of money you have to pay each month is fixed ($50 minimum) during a period of up 10 years of repayment. The repayment limit period depends on the total amount of money borrowed. You pay more money each month but you finish paying earlier.

Extended Repayment Plan:

This plan allows you to repay the money during a longer period between 12 and 30years, depending on the total amount you owe, and the minimum monthly repayment is $50. The monthly payment can be less than in the Standard Plan, comparing the same amount to repay, but you have to pay more interest because you are taking a longer period to repay the loan.

Gradual Repayment Plan:

The first two years the payments are small and later increase gradually, normally, every two years. The loan term is between 12 and 30 years, depending on the total amount you have to repay. The monthly payment will be equal to the interest accumulated between payments the first two years (minimun $25). During the following years you will have to repay the principal amount and the interest. The monthly payment can be no less than 50 % and no more than 150 % of the monthly payment under the standard repayment plan.

Income-Sensitive Repayment Plan:

The monthly repayments are adjusted by the loan holder annually depending on the expected total gross income, the family size, interest rate and the total amount of the loan. This Repayment plan is very flexible, and the repayments can be increased or reduced depending on your financial circumstances and changes. This means also that the interest you will pay at the end will be more than other repayment plans. At the end of the 25 year period, any remaining balance on the loan will be discharged, but you will have to pay taxes over the amount cancelled.

Payment is sent to the US Education Department.

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