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Can I lower the monthly payment on my federal student loans?

Yes. There are many programs available that could help you lower your payment, depending on which ones you qualify for. When federally backed or issued student loans become due after graduation (or after you leave school), they are put into a ten year, fixed payment plan.

However, young people starting out in the world do not make much initially, and that fixed payment can seem insurmountable. This is especially true if the total debt is high.

Graduated Payment Plans

Graduated Payment Plan. This is a plan whereby you have a ten (10) year term for the loan, but the monthly payment starts out low, and then increases every two years. This allows you to pay it off in the same term, but with the payment increasing (hopefully) with your income.

Extended Graduated Plan. Sometimes the amount borrowed is so high that you need more time to pay it back. Therefore the Department of Education may extend the payment term to 25 years (30 years for loans prior to July 1, 2006) if the total loan debt is over $30,000. As with the graduated plan, the monthly plan starts out low, and then increases every two years.

There is one catch, though, but not a big one. The monthly payment must be in an amount that covers all accrued interest on the loan for that month, or $50, whichever is higher.

You can also look into a payment plan based on your income through the Income Based Repayment and Income Contingent Repayment plans.

So What Do I Do?

If you live in southern New Jersey and would like to consult with me on your loans, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.

If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

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Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.