Standard & Extended

The standard payment plan is what you’ll be placed on initially. Under this plan, you’ll pay a certain amount each month based on how much you owe in total. The entire loan is repaid within ten years under this plan so you could be facing pretty hefty monthly payments if you owe a lot of money. No matter what happens the payments will not change but they will be at least $50 per month.

The extended payment plan is similar. However, you get to pay off your loan over 25 years instead of 10 years. That does mean you’ll end up paying a lot more in interest but you will have lower monthly payments. Another nice thing about the extender repayment plan is that you can choose between a fixed amount or a graduated amount. The latter is discussed in more detail.

Graduated

Whether you choose a 10 or 25 year repayment plan, graduated payments are an option. Basically, this means the payments will start out lower and will gradually increase in amount over the repayment period. The idea behind this approach is that you’ll be earning a lot less when you begin paying back your student loans than when you near the end of repayment, hopefully.

Income Contingent

The newest option for federal student loans is the income contingent plan. This plan looks at your specific family income levels based on your federal tax returns and determines your monthly payments. You can use a number of online calculators to determine how much you would pay using this method. One of the best things about this plan if you don’t anticipate earning a lot of money at any time during your career is that if you do not pay the entire loan within 25 years the balance will be discharged. You will, however, be expected to pay taxes on any amount that is discharged.

Remember that no matter which repayment option you choose now, you can always switch by contacting the holder of your loans. If you have trouble making your payments, deferments and forbearances are also options available to help you.

Even before my bankruptcy I had been deferring my student loans (hardship deferment) while I was trying to get back on my feet. I made over $600 in payments this week on them, and it felt really good!

Maybe it’s just me, but I really love paying bills. To me, it’s incredibly satisfying when I actually have the money to pay what I owe. I know that’s probably a normal thing for most people, but for the past year that hasn’t been the case for me. It feels really good.

Here’s my student loan charts (with a 0 balance being the eventual goal!)

Sallie Mae Forbearance Process

I called the 1-888-272-5543 number listed on the website, and also the number given when you click the “postpone payments” link on your account page. After a 4 minute travel through touchtone heaven I arrived speaking to “Katrina” (obviously not her real name…”Katrina” had an Indian accent, but not too bad). She verified some info, asked me why I was applying for forbearance, then gave me a direct number: 800-538-2632 and transfered my to that #. After a 20 minute wait, I talked with male customer service rep who was very helpful, asked the same questions, but actually had the authority to approve the forbearance. This CSR was definetly in the US somewhere. The problem?

A $150 FEE to apply for forbearance. Apparently the fee is $50/per loan. Well, I have three loans. After explain the riduculousness of a forbearance fee, I was told there is no way to get out of it. Crap. I though for a minute, and had to go forward with it, using my debit card to pay $150 of precious cash to this Sallie of the Mae’s. At least it is done. Don’t waste your time calling the general # if you are applying for forbearance, call the 800-538-2632 number. $150 my butt. And that is only for 6 months. My first payment is now due in July. I had to do this though, it pushed back a $500+ payment I was already late on. So, although it hurt 150 times more than I was expected, it was needed, and now done.

Citibank Student Loan Forbearance

I was expecting this process to be much more difficult than the Sallie Mae process. But after pressing “0″ to get to an service rep, I got a nice southern-accent speaking lady after only about 2 minutes. I had already sent in a form for this, and that is all they can do at Citibank. So, when they receive my form that I mailed today, they will approve the forbearance (so I am told) for 6 months, which can then be reapplied for in 6 months for a 12 month max. Oh yeah, no FEES. I was totally expecting a fee here after the Sallie Mae fiasco (maybe that is too strong a word).

So, Student loans are out of the way at the moment. Now onto the credit cards!