Student Loan Debt
Get free help to manage your student debt
For many Americans, managing their student loan debt is stressful and expensive. That’s why United Way has teamed up with Savi to help people freely and easily access student loan debt relief.
Savi’s platform can help you better understand your debt, optimize your repayment options, and enroll in the best plan for your financial situation. The goal is to help you enroll in government programs that can lower your monthly payments and potentially forgive your debt. The average Savi user reduces their loan payment by $156 per month, with some users paying as low as $0 per month.
Go to unitedway.bysavi.com and create your account today!
As an added bonus, users who create their Savi account during 2021 and earn less than $80,000 a year will receive free access to personalized support from Savi’s student loan experts included through 2022.
Understanding your student loan debt options
If you have student loan debt, you must first understand whether it’s from federal loans, private loans, or both.
If you have federal student loans, visit the National Student Loan Data System to find out your loan balances and terms.
When it comes to federal student loans, there are different ways to pay them back. All student loans start on Standard Repayment Plan, where you will owe equal monthly payments over a ten-year term. If that monthly amount is too much, you may qualify for one or more of the following plans:
- Graduated Repayment Plan—monthly payments are lower at first, but increase every two years.
- Extended Repayment Plan—monthly payments can be fixed (the same) or graduated for up to 25 years. This makes the monthly payment smaller than the standard or graduated repayment plans.
- Pay As You Earn Repayment Plan (PAYE) —payments will be 10 percent of discretionary income. Payments are recalculated every year based on updated income and family size information. You must have high debt in relation to your income to qualify. The maximum payment is capped at the same monthly amount as the Standard Repayment. Anything not paid in full after 20 years may be forgiven.
- Revised Pay As You Earn Repayment Plan (REPAYE) —payments will be 10 percent of discretionary income. Payments are recalculated every year based on updated income and family size information. Anything not paid in full after 20 years for undergraduate loans or 25 years for graduate loans may be forgiven. Similar to the PAYE, but:
- This plan is available for any Stafford loan, graduate PLUS loan, and/or any direct loan consolidation that does not contain a Parent Plus loan. PAYE was limited to loans made or disbursed on or after October 1, 2011.
- This plan does not cap the maximum payment. As your income increases, so will your payment, with no upper limit to the amount of your monthly payment.
- Income-Based Repayment Plan (IBR)—monthly payments are limited to 10 to 15 percent of your discretionary income. Payments are recalculated every year based on updated income and family size information. You must have high debt in relation to your income to qualify. Anything not paid in full after 20 for undergraduate loans or 25 years for graduate may be forgiven.
- Income-Contingent Repayment Plan (ICR)—payments are based on the lesser of 20 percent of discretionary income or a fixed payment calculated over 12 years.
With many of these options, you may:
- End up paying more interest than you would have under the standard repayment plan.
- Have to pay income tax on any part of the loan that is forgiven.
To qualify for any of the payment plans, your loan must be in good standing. This means you are current with your payments. If your loan is in default, you will have to rehabilitate it first. A student loan is considered to be in default when there has been no payment for 270 days. To rehabilitate a loan, you must agree in writing to:
- Make 9 consecutive monthly payments
- Make each payment within 20 days of the due date
- Make a payment equal to 15 percent of your discretionary income. You can ask for a lower amount if this is a hardship. In some cases, your payment could be a low as $5 per month.
Once the rehabilitation period is complete:
- The default status of your loan will be removed.
- You will be eligible for deferment, forbearance, choice of repayment plans, and loan forgiveness.
- You may be eligible for additional federal student aid.
- The credit reporting agencies (Equifax, Experian, and TransUnion) will remove the record of your default from your credit history. Late payments reported before the loan defaulted will not be removed from your credit history, however.
If you have private student loans, you must contact your lender directly to find out:
- Your loan balances
- Your monthly payment amount
- How long until you pay off the loan
- If you can negotiate a different payment amount or other terms
- If you cannot remember who holds your student loan, check your credit report. Your creditors will be listed here. Unlike federal student loans and aid, there is no central database of this information.