It seems that student loan debt is a fact of life for many of us. Whether you are a new graduate struggling to find a job, have been back to school for a career move or signed for a parent-plus loan. These loans have expensive consequences. There are bills going through congress right now but until these laws pass and some relief from the debt is received the American populace is stuck with the student loan debt they have. 

So what are you going to pay for that student loan you took out before it is all said and done? The national average for student loan debt at graduation is $30,000.00 so we will use that as our base.

If you choose the ‘standard’ repayment plan you will repay approximately $37,311 on that $30,000.00 loan. The standard plan divides the amount borrowed into 120 monthly payments over the next 10 years. The monthly payments are higher in this plan but the savings on interest paid the bonus. 

If you choose the ‘graduated’ repayment plan you will repay approximately $39,161.00 on a $30,000.00 loan. The graduated plan starts with low payments that increase every two years to complete the repayment in 10 years. The additional interest is the payment for lower initial repayment amounts. 

If you choose the ‘extended’ repayment plan the $0,000.00 loan will cost you $50,027.00 before you pay it off. This plan stretches the repayment period to 25 years with either fixed or graduated payments. In order to use this plan, you must have more than $30,000.00 in student loan debt. 

If you choose the ‘income-driven’ repayment plan your total repayment is approximately $37,356.00. This plan determines your monthly payment based upon your income and family size. This plan costs about as much as the ‘standard’ plan but allows a safeguard for borrowers as the payment can be as low as $0.00 and balances are forgiven after 20 or 25 years. 

To decrease your payments even more, you could choose to make payments during the 6-month repayment grace period after graduation. 

Make sure that you understand your type of student loan, the terms of that loan, whether it accrues interest while you are in school and that you understand the repayment plan you choose and the repercussions for not making the payments. 

In the meantime, talk to your congressperson about the bills pending in the U.S. Congress to help relief come sooner. 

Written by Attorney Heather Moseman. 

Excerpted from the August 18, 2019 Plain Dealer Section F, page F-3