Extended repayment on student loans?
I am in a 5 year degree program and I am an independent student. My parents are deceased, so ever since I’ve been in school I”ve been funding this on my own. This means I’ve taken out quite a bit in student loans to help cover my living expenses while I go to school. Well, I’m about 2 1/2 years into my program and I’ve already taken out $16,000 in loans. Now that I’m transferring to a University, I’m looking at about a total loan debt by the time I graduate of close to $50,000 – $60,000.
I just went to student loan exit counseling yesterday because I’m transferring and they said the average monthly repayment on a $30,000 in a 10 year repayment plan was like $350.00 a month. Well, if I take out $60,000, then that would make my monthly payments almost $700.00 a month?! This is not going to be realistic considering I’m only looking at making about $35,000 a year out of college.
Are extended repayment options available?
Most lenders offer extended repayment options of up to 15, 20, or 25 years depending on your total loan debt ($50K would qualify you for the max).
If it makes sense to consolidate once you are out of school, you could even go up to 30 years.
Some lenders even offer “graduated” repayment plans where the payments start off small then increase gradually every 1-2 years. Remember though, the less your monthly payment the more interest you pay in the long run, so its always good to pay as much as you can afford to pay the loan down.
Most graduates with large debt will sign up for the longest payment plan, so the monthly payments are lowest. You can always pay more under these plans if you are able. You can always switch plans to suit your needs too – as you go on in your career you’ll make more money and afford higher payments.
