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Student Loan Repayment Plans

Congratulations! You just graduated from college, and are ready to enter adulthood. A new job, new city, new friends, basically a new life. While all of this sounds so exciting, there’s one thing that you may be forgetting… student loans. In Wisconsin, most students are required to start paying back their student loans six months after they graduate. This allows you a little time between college and “the real world” to get settled. Once you’re making money and settling into a new job, it’s time to pick a repayment plan. We explained a few plans that will help you find whats best for you.

Repayment Plans

There are usually two main types of repayment plans. The first revolves around time, and the second revolves around income. Depending on what factors are important will help determine what type of plan you will want to use.

Timely Repayment Plans

Standard Repayment Plan
If you do not choose a plan, you will automatically be placed on the standard repayment plan. This plan requires paying a fixed monthly payment.

10-30 Years
Least Interest
Fixed Monthly Payments

Graduated Repayment Plan
This plan is for those who expect to have there income increase from year-to-year. Monthly payments will increase every two years.

10 Years
Payments increase every two years

Extended Repayment Plan
This plan benefits those who have a large number of student loans, and are looking to pay them off in a longer period of time. This allows people to have less monthly payments.

25 Years
Greater than $30,000 in student loans
Fixed or Graduated
Greater Interest

Income Repayment Plans

There are several income repayment plans, but we looked at the two most popular plans, the Income-Based Repayment Plan and the Pay As You Earn Repayment Plan.

Income Based Repayment Plan
This plan is typically for those who have more dependents in their family. It allows them to have lower monthly payments over a longer period of time. There are certain restrictions that come along with this plan.

20 Years
10% of discretionary income
Payment < Standard Repayment Plan

Pay As You Earn Plan
Very similar to the Income-Based Repayment Plan, this is best for those who have a family, and are looking for lower monthly payments over a longer period of time. There are certain restrictions that come along with this plan.

20 Years
10% of discretionary income
Payment < Standard Repayment Plan
Direct Loans Only

It’s important to remember that everyone comes out of college with a different amount of student loans. A plan that might work great for you, may not work for someone else. It is also wise to know that you do not have to follow one of these plans, reach out to a banker for different repayment plans that may work better for you. Overall, analyze your student loans, and talk to a banker or financial advisor to help figure out a plan that is best for you.

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