William D. Ford Federal Direct Loan Repayment Options
Standard Repayment Plan period is 10 years. Repayment on principle begins 6 months after enrollment drops below less than half-time status. Equal monthly payments are made throughout your repayment term, each covering the principal and interest due that month. Your final payment may be slightly more or less than your other payments. Of all the options available, this plan is most likely to result in the lowest aggregated interest costs over the life of your loan. If you are unable to make the standard repayment plans, there are other repayment plans available.
Graduated Payment Plan - Reduces the amount of your monthly payments during the first years of repayment. If you select this option, your monthly payments during the first 2 years will be interest-only payments or higher depending on your loan balance. After the first 2 years of reduced payments, you may have the option to renew the graduated payment plan for an additional 2 years. Although your initial monthly payments are reduced, the aggregated interest repaid over the life of your loan and your later monthly payments will increase. This plan will not extend your repayment term. Minimum loan amounts and other eligibility restrictions may apply.
Income-Sensitive Payment Plan - This repayment option allows you to pay between 4% and 25% of your gross monthly income (not to drop below the monthly accrued interest on your loan(s)). The income-sensitive payment is offered for a year at a time, up to a total of five years over the life of your loan. The remaining terms follow a standard payment plan. Eligibility and income documentation (i.e. pay stubs for the past 2 months) must be verified annually. Additional documentation may be required.
Extended Payment Plan - If you received your first Direct Loan, Supplemental Loan for Students (SLS), or PLUS Loan on or after October 7, 1998, and the outstanding balance of these loans totals more than $30,000, you can opt to repay your loan over a 25-year term instead of a 20-year term.
Civil Legal Assistance Attorney Student Loan Repayment Program (CLAAP)
The "Harkin bill," became authorized by the Higher Education Opportunity Act of 2008, and is now entitled the Civil Legal Assistance Attorney Student Loan Repayment Program (CLAAP). Five million dollars is now available for distribution to qualified civil legal assistance attorneys with federal student loan debt. The Department of Education will commit these funds to eligible civil legal assistance attorneys on a first-come, first-served basis.
To Apply: Please contact Law School Advocacy and Outreach, Equal Justice Works, at equaljusticeworks.org or (843) 441-3656 who can let you know as soon as the application period opens. Those who wish to apply should complete the application as soon as it is available because funds are unlikely to cover all applicants.
As usual, the program includes some complexity. Please see the comprehensive CLAAP webpage. EJW has also scheduled two webinars to help civil legal assistance attorneys interested in the program. Everything currently we known about the program is on that webpage.
Allows students to access their own federal student loan data, complete their Master Promissory Note and find out more information about entrance and exit counseling, consolidation, and repayment options. More Details »