Legal Tidbits: Federal student loans/repayment plans

You struggle to get through college. You weren’t a scholarship student, meaning that you didn’t necessarily have the grades – let alone the athletic skill – to earn a “full-ride” scholarship that pays for your tuition, books, lab fees and meal plans.

You borrowed a lot of money to pay for your education. Are you on the hook for the rest of your life to pay the loans back? Hardly. The good news is that you can get the loans forgiven under certain circumstances.

Student loans can be repaid through a variety of repayment plans. Let’s consider some of them.

* A Standard Repayment Plan usually sets an amount of at least $50 per month and former students have 10 years to retire the debt. You could pay less in interest under this plan than you might under other plans.

* An Extended Repayment Plan gives you as long as 25 years to pay back the loan. Your monthly payments would be less than they would be under a Standard plan.

* An Income Based Repayment Plan is based on the income you earn once you get a job. You would pay 15 percent of your discretionary monthly income. Your monthly rate of payment fluctuates with your income and, as in the Extended plan, you’re on a 25-year timetable to pay back the loan.

* A Pay as You Earn Repayment Plan allows you to pay back the loan at a rate of 10 percent of your monthly income. You have 20 years to pay it back. But get this: If you haven’t repaid the loan in full after 20 years, your loan may be forgiven.

* An Income-Contingent Repayment Plan is similar to the Pay as You Earn plan, in that the unpaid balance could be forgiven if the borrower makes a good-faith effort to repay the loan in the 20-year time limit allowed.

Student loans aren’t necessarily a life sentence. Lenders have come to realize the difficulty that college graduates occasionally face in earning sufficient incomes to repay their loans in full – and on time.

Don’t fret if you can’t throw a football 60 yards or if you aren’t a National Merit Scholar in high school. There’s money out there through a variety of federal student loan programs. The lenders will work with you, but only if you do your part to make good on the debt you’ve accrued.