Standard: provides for fixed annual (substantially equal) payment amounts over 10 years. The amount of payments may be adjusted to reflect annual changes in the variable interest rate. Monthly payment amount cannot be less than $50.
Graduated: installments that are smaller at the beginning of the repayment period and gradually increase over time during the 10-year repayment schedule. No single installment may be more than three times greater than any other installment. The payments may be adjusted to reflect annual changes in the variable interest rate.
Extended: Only for loans made after October 7, 1998. Student must have a minimum of $30,000 in loans. The payment options can be either standard or graduated. Maximum repayment term is 25 years. This is a very good option when interest rates are high at the time you graduate. When interest rates are very low and likely to rise, consolidation may be a better option.
Income Contingent: As the name implies, this plan bases the monthly payment amounts on earnings, family size and loan amount. The monthly payment is adjusted annually to reflect changes in income and family size. This option is very good for those who choose low-paying jobs. Currently, the income contingent plan is only available through the federal government. Students with a Federal Family Educational Loan (all Claremont Students) will need to consolidate their loans into a federal direct consolidation loan to arrange an income contingent payment schedule. The maximum repayment is 25 years. The remaining loan balance, if any, will be forgiven after 25 years.
Income Sensitive: This plan is similar to the Income Contingent plan in that monthly payments are based on earnings. However, this plan is available through your lender and so does not require Consolidation through the Federal government. The maximum repayment period is 10 years. Unlike the Income Contingent plan, the entire balance must be repaid in 10 years.
Consolidation: With a consolidation loan, you can combine any or all of your outstanding federal student loans into a single loan. This new loan will have a longer repayment period, new terms, and a new interest rate. Your monthly payments may be smaller but you will pay more interest over time. Consolidation loans have the option of a standard, graduated or income sensitive repayment schedule. When you consolidate you lose your repayment benefits, but get new (generally not as favorable) ones. You may also lose your grace period.