Financial Toolkit- Student Loan Repayment Worksheet

We all know the financial goal is an intention we plan to save or plan our expenditure. The only way it differs from any other goal is that it is expressed completely based upon money. It varies from person to person for instances retirement planning, debt reduction, credit improvement etc.

Writing your financial goals is essential. Written goals bring transparency to your financial situation and make you focus. By reviewing your goals throughout the year, you will be definitely able to secure your future. A goal in written is a powerful reminder that you can track to achieve greater success in your financial life.

It is always advised you should take the least amount of debt possible so that you can start replaying for the student loan as soon as you get your graduation. Higher debt amount may impact your credit score. So is it worth paying it off early? Again your money grows with investments. It will be wise not put all your money towards debt payments. Like many experts, I recommend debt payments should be under 10% of your total monthly income.

Student Loan Repayment Options

1. Revised Pay As You Earn (REPAYE)

The REPAY student loan repayment plan is an up gradation of the formerly called Pay As You Earn (PAYEE) plan. The Revised Pay As You Earn plan eliminates certain restrictions with loan repayment in the PAYEE plan and includes a number of additional benefits for students to pay off their loans while earning a consistent income.

The REPAYE plan cops your monthly payments at 10% of your discretionary income and offers loan forgiveness after 20 years of making qualified payments (for undergraduate loans). The same plan provides forgiveness after 25 years for graduate loans.

Qualifying student loan types under this plan:

  • Federal Direct Loans
  • Stafford
  • Graduate Plus Loan

2. Pay As You Earn (PAYE)

The Pay As You Earn (PAYE) plan was passed by President Obama to try and improve the existing restrictions and guidelines of the Income-Based Repayment (IBR) option.

The PAYE plan caps your monthly payments at 10% of your discretionary income and reduces the loan forgiveness term from 25 years (IBR) to 20 years in the PAYE.

3. Income-Based Repayment

The Income-Based Repayment is a much older plan and offers lesser benefits as compared to the REPAYE and PAYE plans. Being one of the most popular student loan repayment options available, the IBR plan provides some of the strongest benefits to the borrower.

The IBR plan provides loan forgiveness on the first three years of any unpaid interest from the Income-Based Repayment enrollment time for the subsidized portion of your loan.

Students can take advantage of the IBR option, if and when:

  • You are facing a financial hardship.
  • You qualify for a zero loan payment or payment of less than the monthly interest payment on the loan.
  • You do not see a large shift in your income in the near future.
  • If you can see yourself making zero qualified payments always.

4. Standard Repayment

In the standard repayment loan option, the loan payment is calculated just like any other normal loan. The term of the loan is based on the size of the loan and the calculation of the payment is based on both the term and size of the loan taken. The standard repayment option can be used when:

  • If you have less than 30 years left on the term.
  • You wish to pay off your student loan debts as soon as possible.
  • Your loan amount is small, in which case you can continue paying a minimal amount over a shorter period of time than elongating the time period for your payments.

5. Graduated Repayment Plan

Very similar to the standard repayment plan, the Graduated Repayment plan works with a small difference. Students under the graduated repayment loan need to pay interest only on the loan, due to which you will have to pay smaller amounts as compared to the standard repayment loan option. For the first three years, you can pay interest only on the loan, after which the payment increases depending on the size and term of your loan. A graduated repayment plan can come to use when:

  • Your income is high enough for you to make the payments.
  • If you don’t qualify for the IBR repayment plan.
  • You want to start with paying minimal amounts initially and increase payments once your income increases in the future.

The biggest drawback of this student loan repayment option is that the total amount that you will have to pay at the end of it all will be much higher than that of a student repayment plan.

6. Income Contingent Repayment

The Income Contingent Repayment takes into consideration a number of income-based factors to determine your payment during a student loan repayment. The – Adjusted Gross Income (AGI that excludes your loan size) and AGI (that includes your loan size and value). You can opt for an Income Contingent repayment plan when:

  • You need financial relief
  • You wish to be legible for student loan forgiveness.
  • You do not see a higher income for yourself in the future.


By selecting any of the above key student loan repayment plans, you can easily secure your education and have a successful financial situation. Don’t be pressed for money when it comes to your graduation or post-graduation. In cases of excessive confusion, you can contact student debt relief organizations to understand the best loan repayment option for you.

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