Loan Repayment and Loan Forgiveness Programs

Loan Repayment Plans

There are various loan repayment plans available for students who have borrowed through the Federal Direct Lending program. You may choose the plan that best meets your needs based on your financial goals and what you can afford to pay each month. Students will automatically be placed into the Standard Repayment plan, unless you select a different plan when you complete your Exit Counseling. Students may change their repayment plan if necessary.

Options

Payment Structure

Maximum Payment Period

Additional Features

Standard*

Fixed

10 years

Highest Initial Payment
Lowest Total Interest

Graduated*

Tiered

10 years

Interest only payments initially
Payments increase incrementally

Extended*

Fixed or tiered

25 years

Lowest initial payment without considering income
Federal loan debt must be greater than $30,000

Income
Sensitive**

Adjusted annually
Based on total gross
Income

15 years

Payments must at least cover monthly accruing interest
You determine the percentage of your monthly payment, between 4% and 25% of your monthly gross income

Income Based***

Adjust annually based on:
Household AGI
Household size
Poverty guideline
State residence

25 years

Payment is 15% of disposable Income  (portion of AGI that is 150% of HHS poverty guideline)
Monthly payment can be less than accrued interest
Any outstanding eligible loan balance is cancelled after 25 years of being “economically challenged”
(Also see Federal Public Service Loan Forgiveness Program at www.MyFedLoan.org/PSLF)

*Federal Direct Loan Program or Federal Family Educational Loan Program
** Federal Family Educational Loan Program only
*** Federal Direct Loan Program only

Loan Forgiveness

The Federal Public Service Loan Forgiveness program is available for graduates who go into public service employment. This program is available to borrowers who are employed full-time in certain public service jobs, have eligible loan type(s), make 120 qualifying payments under an eligible repayment plan and maintain a full-time employment status while working for a qualifying public service organization.  For details on this program, go to www.MyFedLoan.org/PSLF. 

In New Mexico, there is also the Public Service Law Loan Repayment Program. This program is available to borrowers whose annual salary may not exceed $45,000, student loans are not in default and work for a qualifying organization. For more details on this program, go to http://www.hed.state.nm.us/lpr.aspx.

For more information on loan repayment programs, consolidation information and debt management, go to www.studentloans.gov.