• Home
  • GET THE BOOK
  • Start Here
  • Blog
  • Free Resources
  • Shop TBM
  • Courses

The Budget Mom

Real Women. Real Life. Real Finance

  • Home
  • Products
    • Live Rich Planner
    • Budget By Paycheck
  • Blog
  • FREE RESOURCES
  • COURSES
  • GET THE BOOK
  • Shop TBM

A life you love on a budget you can afford.

Here on TBM®, I provide you with simple, easy-to-follow solutions to help you budget your money, pay off debt, save more, and crush your financial goals. But more than that, I give you the tools to start doing the things that matter most to you, on a budget that actually works!

7 Ways to Pay Off Student Loans When You Can’t Afford the Payments

February 17, 2016
DEBT & CREDIT

Share1
Pin134
Share
Tweet
Email
135 Shares

Make sure to explore all options for paying off your student loans. Here are 7 repayment options you need to know.

This is a sinking boat I think a lot of us have been in. It’s a scary and frustrating thing. We go to school, work and study hard, graduate, and then we are handed a lovely GIGANTIC bill in the mail to congratulate us. I will not lie, I still struggle with this. Every single second, student loan debt in America grows by $2,726. Every second people! I don’t know about you, but this blew my socks off. Guess what, I have contributed to this “Student Loan Debt Epidemic.” When I graduated college, I was not able to afford my student loan bills. In fact, I was completely clueless on how to even keep up. That's when I discovered the Income Repayment Plan. This saved me from missing payments, lowered my monthly bill to an amount that was realistic to my current circumstance, and allowed me to keep my head above water until I could actually afford my regular bill. There are options out there that can not only lower your monthly payment, but can actually give you peace of mind.

Watch the seconds tick away as the student loan debt grows!

 

| StartClass


That bill you got in the mail might not be set in stone. It says you have to pay a certain amount every month, but there are ways to alter this lovely monthly payment. As I have posted about before (The Day My Son Leaves Home), if you have federal student loans, there might be a way for you to get back on track!

There are currently 8 different repayment options for your federal student loans. That’s 8 ways to make a huge difference in your budget. Each one is unique, and it is up to you for you to determine which one is the best solution for your circumstances. I will not go into all 8 options, but I will list the ones I think might help you if you are failing to make your payments.

  • The Standard Plan – This plan is meant to save you money over time. Why do you ask? Your payments will be a bit higher than other options, but you will pay off your loans the fastest with this option. Since you pay it off sooner, this means less interest you have to pay. This is the plan that is the “default” option. This means that if you don’t choose  a prepayment plan option, you automatically get slapped with this bill in the mail. So do you see why it might be scary to see your first student loan bill? You might be in the default plan because you didn’t say otherwise. This plan is not a great solution if you are saying to yourself “Help, I can’t pay my student loans.”

 

  • The Graduated Repayment Plan – If you just graduated and are in a low paying position to start off, this might be a great option. Under this option your payments will be low in the beginning, but over time they will increase. The increase in payment will happen every two years and will never be less than the amount of interest that accrues between your payments. This payment option will never be more than 3 times greater than any other payment.

 

  • The Extended Repayment Plan – If you are truly stuck in a low paying job for a long period of time. You hit the jackpot with this option. You will make lower monthly payments over a longer period of time. There are eligibility requirements for this option. I will not list all the requirements, but here are a few. You can’t have an outstanding loan balance on a Direct Loan as of 10/7/1998, or on the date you obtained the Direct loan after 10/7/1998, and you have to have more than $30,000 in outstanding Direct Loans. If you are interested in this option please see the link at the bottom of this post for a more detailed explanation.
  • Read: Should You Consolidate Your Student Loans?

This is the Important Section!

Detailed below are the repayment options I am suggesting all people who are struggling to make student loan payments look at. These plans are designed to make your student loan payments more manageable and are called income driven repayment plans. If you want to possibly start any of these plans, heads up, you will have to apply.

  • Revised Pay As You Earn Repayment Plan– Under this plan your payments will be based on about 10% of your discretionary income. What is discretionary income? This is your income that is left over for you to spend, invest or save after taxes, and personal expenses (the 3 basis – food, shelter, and clothing) have been paid.

 

  • Pay As You Earn Repayment Plan – Your payments are generally 10% of your discretionary income, but it will never be more than the 10 year Standard Repayment monthly plan amount.

 

  • Income-Based Repayment Plan – This is also generally 10% of your discretionary income. However, people who they consider new borrowers who borrowed money on or after 6/1/2014 will get the 10% figure. This will also never be more than the 10 year Standard Repayment monthly plan amount. If you are an old borrower, who borrowed money on or after 7/1/2014, then it is generally 15% of your discretionary income.

 

  • Income-Contingent Repayment Plan – Under this plan, they calculate your monthly payment a little differently. What you pay will either be based on 20% of your discretionary income or what you would pay on a fixed payment plan over a 12 year period that is adjusted to your income – whichever is less.
  • Read: Pay off Debt With the Debt Snowball Method

To be redirected to the repayment plan estimator click HERE. This estimator is provided by https://studentaid.ed.gov and gives you a free comparison of estimated monthly payment amounts for all federal student loan repayment options.

  • Thinking of consolidating your student loans? Check out Credible. 
Share1
Pin134
Share
Tweet
Email
135 Shares

Filed Under: Tagged With: DEBT, LOANS, SCHOOL, STUDENT LOANS

Previous article:
« The Day My Son Leaves Home
Next article:
4 Budgeting Myths You Should Ignore »

Hello, I'm Kumiko, but everyone just calls me Miko. Welcome to my blog, The Budget Mom. I am an Accredited Financial Counselor® , and mom to a rambunctious boy. Come along with me as I strive to live a life I love on a budget that I can afford. Read more about me.

RECENT YOUTUBE VIDEO

Today, I am showing you how I use visual financial trackers in my life. I have a lot of these trackers available in my Free Resource Library (https://bit.ly/2PDmTHz), in my TBM Shop (https://bit.ly/42S0DAi), or you can find them over at DebtFreeCharts.com.

CHAPTERS
00:00 Intro
00:37 Why you should use financial trackers
04:37 Savings Goals
08:32 Graphic Tracker for Debt
13:16 Lined Tracker for Debt
20:43 Tips & Recommendations

➡️ HOW I TRACK MY SPENDING: https://bit.ly/3aIe89I
➡️ HOW TO USE A BUDGET CALENDAR: https://bit.ly/2IzF2Vj
➡️ FINDING YOUR WHY: https://bit.ly/3aJUryj
➡️ THE BUDGET MOM'S FINANCIAL FREEDOM STEPS: https://bit.ly/3cfJXsp
➡️ HOW TO GET STARTED WITH THE CASH ENVELOPE METHOD: https://bit.ly/2vQJaO5
➡️ HOW TO CREATE A PLAN OF ATTACK TO PAY OFF DEBT: https://bit.ly/2wDETxF
➡️ HOW TO CLOSE OUT YOUR BUDGET: https://bit.ly/2Uz0UUW

ABOUT ME

Kumiko Love is a single mom who empowers women everywhere to regain control of their financial lives. An Accredited Financial Counselor with over nine years of experience in the finance industry, she founded The Budget Mom, a community of millions of women on a path to financial fulfillment.

She's also the creator of the wildly popular Live Rich Planner® and Budget by Paycheck® Workbook. Love has been featured on Good Morning America, the Today show, CNN, CBS, ABC and in USA Today, US News, World Report, Huffington Post, Money Magazine, Parents Magazine, the Washington Post, and Real Simple. She lives in Spokane Valley, Washington.

YOU CAN FIND ME AT:

📝 WEBSITE: https://www.thebudgetmom.com
📘 FACEBOOK: https://www.facebook.com/thebudgetmom/
📸 INSTAGRAM: https://www.instagram.com/thebudgetmom/
📌 PINTEREST: https://www.pinterest.com/thebudgetmom/

GET STARTED

➡️Start Here: https://www.thebudgetmom.com/start-here/
➡️Courses: https://courses.thebudgetmom.com/
➡️Free Resources: https://bit.ly/2PDmTHz
➡️GET 10% OFF my popular Budget-by-Paycheck Workbook - Coupon Code TBMYOUTUBE https://bit.ly/3FEdZFp

Soundstripe Music License Code: WIKRJYHFAEB3H6B3
Load More... Subscribe
Free Resource Library

Recent Posts

  • Building a College Fund for Kids: Invest in Their Future Today
  • HELOC to Pay Off Debt: Is it a Lifeline or a Trap?
  • Budget Tune-Up: Know When to Adjust Your Limits
  • Freeze Your Credit: How It Works and When It’s a Smart Move
  • Bounce Back from Fraud: How to Protect Your Family’s Finances and Move Forward

Blog Categories

Amazon Associates Disclosure

The Budget Mom, LLC is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

  • Cart
  • Shop Policies

Start With My Friday Newsletter

Every Friday I send you a short helpful email with my popular Friday freebie. Join my 500k+ subscribers!

About

  • Home
  • ABOUT TBM
  • Contact
  • Start Here

Important

  • DISCLAIMER
  • PRIVACY POLICY
  • Subscribe

Favorites

  • YouTube
  • Blog
  • Live Rich Planner
  • Budget by Paycheck

Start With My Friday Newsletter

Copyright ©2023, The Budget Mom®
This website contains affiliate links, which means that if you click on a product link, I may receive a commission. This website is a participant in the amazon services llc associates program, an affiliate advertising program where I earn advertising fees by linking to amazon.com.
  • How financially fulfilled are you? Take this 2 minute quiz to get your score!
    Click Here to Start