Attention May Graduates: It’s Payback Time!

Didn’t get your dream job right out of college? Worried about your student loan debt? Don’t fear the bill that’s coming in November!

The average Albertus graduating student borrowed $25,181 in federal student loans in the 2012/2013 academic year. These students received student loan bills for $290 a month, but you don’t have to! Standard repayment may not be the best fit for you.

There are seven different repayment plans available, and you have the ability to change your repayment plan each calendar year. What may work for you one year, may not in the next. If you find yourself in the position where a $290 payment would cause a financial hardship, here are three income-driven repayment options that you may want to look into:

 

To help you better understand the plans, here are some advantages and disadvantages:

Income-Based Repayment (IBR):

Advantages: Monthly repayment amounts are 15 percent of your Adjusted Gross Income and will never exceed the monthly Standard Repayment Plan. Interest that accrues in excess of your monthly payment will not capitalize. Any loan balances that remain after 25 years of qualified repayments will be forgiven. If you work full-time for a public service organization and make 120 full, monthly payments (10 years), you may be eligible for loan forgiveness.

Disadvantages: Reduced monthly payments extend the length of the loan and increase the amount of interest you are responsible for repaying. Documentation of your family size and income must be submitted annually to your loan servicer. If you fail to submit documents, or no longer qualify, your payment converts back to Standard Repayment Plan and any unpaid interest will begin to capitalize. You may have to pay taxes for any loan amounts that are forgiven.

Income-Contingent Repayment (ICR):

Advantages: Monthly payment amounts are no more than 20 percent of your Adjusted Gross Income. Monthly payments are made for a maximum of 25 years. There is a 10 percent cap on interest capitalizing. Any loan amount that remains after 25 years of qualified repayment will be forgiven. If you work full-time for a public service organization and make 120 full, monthly payments (10 years), you may be eligible for loan forgiveness. Your spouse’s income and student loan debt may also be considered as a factor in determining monthly repayments.

Disadvantages: Reduced monthly payments extend the length of the loan and increase the amount of interest you are responsible for repaying. Documentation of your family size and income must be submitted annually to your loan servicer. If you fail to submit documents, or no longer qualify, your payment converts back to Standard Repayment Plan and any unpaid interest will begin to capitalize. You may have to pay taxes for any loan amounts that are forgiven. Your spouse’s income and student loan debt may also be considered as a factor in determining monthly repayments.

Pay As You Earn:

biolab_041Advantages: Monthly repayment amounts are 10 percent of your Adjusted Gross Income and will never exceed the monthly Standard Repayment Plan. There is a 10 percent cap on interest capitalizing. Any loan amount that remains after 20 years of qualified repayment will be forgiven. If you work full-time for a public service organization and make 120 full, monthly payments (10 years), you may be eligible for loan forgiveness.

Disadvantages: This plan is only for qualified Direct Loans. Reduced monthly payments extend the length of the loan and increase the amount of interest you are responsible for repaying. Documentation of your family size and income must be submitted annually to your loan servicer. If you fail to submit documents, or no longer qualify, your payment converts back to Standard Repayment Plan and any unpaid interest will begin to capitalize. You may have to pay taxes for any loan amounts that are forgiven.

Don’t forget: we’re always here to help! Stop in or call anytime.

Copy of 2014_04_10_IMG_20140320_133641_057

We in the Financial Aid Office know how difficult it is to finance a private education (75 percent of us are graduates of Albertus Magnus College!). Because of this, our goal is to help finance your dreams through education by providing access to financial aid and promoting financial knowledge. We are invested in your future: Literally.

Location: Aquinas Hall, Room 107
Hours: Monday: 8:30 a.m. – 4:30 p.m.
Tuesday, Wednesday and Thursday: 8:30 a.m. – 7:00 p.m.
Friday: 8:30a.m. – 4:30p.m.

Phone: (203) 773-8508
Fax: (203) 773-8972
Email: financial_aid@albertus.edu

Leave a Reply