Fortunately, most student loan programs are flexible and offer a variety of repayment options. Rules for repayment of federal student loans vary according to the type and amount of loan received. This option is the quickest and cheapest plan for borrowers to repay student loans. Borrowers should remember, however, that extending the repayment period will also increase the cost of the total loan due to interest costs. Payments rise as the borrower s income level increases.
Many students receive financial aid from a variety of loan sources.
The Direct Loan Consolidation program can help borrowers simplify the repayment process by allowing the borrower to consolidate several types of federal student loans with various repayment schedules into one loan. In addition to the convenience of making one loan payment, interest rates on a consolidation loan may be lower. Consolidation loans are available from the U.S. Department of Education, and also from banks and credit unions. The AmeriCorps program can also assist students in repaying their loans. The program allows participants, in exchange for a year of service, to earn assistance in paying for their education.