When Federal student loans enter repayment, they are automatically enrolled in standard repayment. Under it, a borrower has 10 years to repay the total amount of his or her loan. The loan servicer (whoever is sending the bill) determines the monthly bill by splitting the loan amount into 120 equal payments (12 payments per year).
Payments pay off the interest building up each month, plus part of the original loan amount. Depending on the amount of the loan, the loan term may be shorter than 10 years. There is a $50 minimum monthly payment.
Read more about this topic: Student Loans In The United States
Famous quotes containing the words standard and/or repayment:
“[The Declaration of Independence] meant to set up a standard maxim for free society, which should be familiar to all, and revered by all; constantly looked to, constantly labored for, and even though never perfectly attained, constantly approximated, and thereby constantly spreading and deepening its influence, and augmenting the happiness and value of life to all people of all colors everywhere.”
—Abraham Lincoln (1809–1865)
“A man’s indebtedness ... is not virtue; his repayment is. Virtue begins when he dedicates himself actively to the job of gratitude.”
—Ruth Benedict (1887–1948)