![]() For example, the “Pay As You Earn” repayment plan caps monthly payments at 10% of your income, extends the term of your loan to up to 20-25 years, and offers loan forgiveness after 20-25 years. Some plans are linked to your income and can significantly lower your monthly payments. Many other plans are available, however, and loan borrowers have the right to choose a plan. ![]() By default, loan servicers will enroll borrowers in the Standard Repayment Plan. When it is time to repay student loans, federal borrowers must choose a repayment plan. The information covered below relates only to federal loans. There is no central database like NSLDS for private student loan information.įor questions about private loans, including how to make repayment more affordable, contact your loan servicer. If you hold a loan that is not listed on NSLDS, then that loan is a private loan. To find out if a loan is federal or private, log on to NSLDS with your FSA ID. The National Student Loan Data System (“NSLDS”) lists all of your federal loans. ![]() Additionally, certain repayment options, such as income-based repayment plans, may be more readily available for federal loans. For example, federal loans are made with a fixed interest rate, while private loans can carry variable interest rates, meaning the interest rate will change over time. This means that the terms of the loan often differ. Federal loans are made by the federal government, while private loans are made by entities such as banks, credit unions, and state-based organizations. Most of the student loan debt in the United States is for federal loans, however many students may have private loans. What’s the difference? Federal Student Loans versus Private Loans Below, learn how to determine which type of loan you have and what your repayment, deferment or forbearance, and consolidation options are. There are two categories of student loans – federal and private – and your rights and responsibilities differ depending on which category your loan falls into.
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