Student Loan Guide: Federal Stafford Loan Repayment Options Made Simple

Federal student loans, primarily the Stafford loans offer students of all ages and levels of study the chance to invest in education and pay later. These loans are generally available to everyone, regardless of credit, income or employment.

Stafford loans do even become due until six months after the student graduates or finishes their studies. And when they do, there are options to fit any budget or lifestyle.

Stafford Loan Repayment Option #1: Standard Repayment
The standard repayment option of federal Stafford loans has a set annual payment with a set interest, with a repayment period not lasting over ten years. This is a good repayment option for those who are financially stable (perhaps landing the ultimate post-college job!) and able to make higher payments. Over time with the standard Stafford loan payoff, the student will end up paying less because there will be less interest accrued.

When a student gets ready to graduate or withdraws from school, he or she must complete an exit interview either online or at the school's financial aid office. At that time, the student chooses which repayment plan option they want. If they do not select a repayment option, the standard repayment plan will be automatically chosen. However, the borrower may change their repayment plan to one of he other three options listed below.

Stafford Loan Repayment Option #2: Graduated
The graduated student loan repayment option is a good option for students who are starting entry-level jobs, with room for advancement. Like the standard repayment option, the graduated plan also lasts ten years, but the payments start out lower and increase every two years. So, this allows a person to get used to shelling out a student loan payment. And, as the income increases the increased loan payments should become more comfortable.

Stafford Loan Repayment Option #3: Extended
For people wanting to have a lower payment, the extended repayment plan for paying back the Stafford loans is ideal. Borrowers can have up to 25 years to repay the student loans, with a more affordable payment. However, the borrower will pay a higher total over time as more interest will accrue.

Stafford Loan Repayment Option #4: Income Sensitive
A fourth option of repaying federal Stafford loans is by applying for an income sensitive repayment. The borrower's payment will be based on his or her income. This is an especially favorable option for people who may not be working in their chosen field yet, or who have many other expenses.

Forbearance and Deferment
If a borrower ever runs into a tight spot, the federal Stafford loan program offers the option of applying for a forbearance or deferment to place a temporary reduction or vacation period from the loan.