Repayment is coming: Do you know your options?

Editor’s note: Over the next couple weeks we’ll be talking about repaying your student loans — from types of plans to repayment strategies. Make sure to let us know if you have specific questions through comments!

Repayment is on its way, college seniors. You’ll be entering this new phase of your financial life in a few short months. If you need to learn about your options, we’re here to help.

Repayment plans for federal loans

If you’ve taken out federal student loans, there are a few different types of repayment plans:

  • Standard — All federal loans are set up on this plan by default. It’s arranged so that each monthly payment is the same and that the loan will be paid off within 10 years. Monthly payments must be a minimum of $50. With this option, you pay the least amount of interest over the life of the loan.
  • Extended — With this plan, you’ll stretch your payments out longer than the standard 10 years, up to a 25-year maximum. Payments may be the same amount each month, or they can start out lower and increase over time. This option may fit your budget better, if you can’t make the standard monthly payment based on 10-year repayment, but you may pay more interest over the life of the loan.
  • Graduated — This plan lets you start out with lower monthly payments that gradually increase over time. It’s different than extended repayment, in that you’re still paying off the loan within a 10-year timeframe, but starting with lower monthly payments may better fit your budget right out of college. Again, with this plan you may end up paying more interest over the life of the loan.
  • Income-sensitive — With this payment plan, your monthly payment will be adjusted each year based on your expected gross income from all sources. On this plan, you’ll still repay your loan over a 10-year timeframe and you may pay more interest over the life of the loan, but it may be a better fit for your post-college budget to begin with lower monthly payments. You’ll need to request this option annually. Each year you will need to decide if it still meets your repayment needs.
  • Income-based — This option caps your monthly payments at a percentage of your discretionary income (based on income and family size). The monthly payment amount is adjusted each year based on these factors. This repayment options is available to federal loan borrowers, excluding PLUS loans for parents and Federal Consolidation Loans that include PLUS loans for parents. Your repayment period can exceed 10 years under this plain, and it may cost you more interest over the life of the loan.

Repayment plans for private student loans
If you’ve taken out private student loans, check with your lender about your repayment options. If you have a private student loan from Wells Fargo, head to our website or give us a call to talk through your options. Be sure to stay in contact if you think you’re going to have trouble repaying your loan.

Consolidation options
Consolidating your loans lets you combine multiple loans into one new loan with one monthly payment. If you have more than one private student loan (whether they’re from Wells Fargo or other lenders), you can simplify repayment by consolidating. Again, you may pay more over the life of the loan with this option.

If you’d like more details about any of these repayment plans, click here. And don’t forget, if you have a specific question about repayment, please ask us!

Caroline Hanson

About Caroline Hanson

Caroline is a communications consultant for Wells Fargo Education Financial Services. Although she has been known to forget her own ZIP code, she has memorized the lyrics to every bad 1970s pop song ever written. Unfortunately, she also loves karaoke. Caroline spends her spare time at Target®. She also likes biking slowly and has participated in RAGBRAI. Caroline is a graduate of Iowa State University and has worked in journalism and public relations for the past 14 years. She lives in Iowa with her husband and has a 19-year-old stepdaughter and 2-year-old son.
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6 Responses to Repayment is coming: Do you know your options?

  1. Kathleen McDade says:

    Yesterday, my son left a blog on your site regarding his outrage with Well’s Fargo and the denial of deferment for those in the military. I would like to add my comments by saying that your company is pathetic. American Education Services who is servicing the loan explained to us that Wells Fargo just recently made a decision to deny further deferments for anyone in the military. My son will be leaving for the Marine Corp on June 3rd. We submitted extensive documentation including a letter from his commanding officer regarding the intense training he will endure over a ten week period. He is not asking for a six month deferment, he is only asking for time to complete this intense training and collect his paycheck. He will not have access to paying bills at this time. This is not my only concern. I think it is absolutely outrageous that your company can sleep at night when making these decisions. My son will be fighting for YOUR FREEDOM while you are comfortable in your little world. THIS IS A DISGRACE. I will tell everyone and anyone through various types of media (facebook, newspaper and our local news) about these decisions and to never do business with Wells Fargo. I am sure you have plenty of people who never pay you a cent and here is a kid who will be having a job in the Marine
    Corp, collecting a pay check by the middle of July and no allowance for deferment. I will not stop let this go. I would greatly appreciate your comments via e-mail.

    Moderator’s note: We removed personal and account information from this comment in accordance with our Comment Guidelines. Nothing else has been changed in any way.

    • Barbara Raus says:

      @Kathleen and Christopher – Thank you both for commenting and you, Christopher, for serving our country. I’m very sorry you’ve had a negative experience up to this point, and I’ve been working behind the scenes to better understand your situation. I’ve been talking with our Executive Office, who I know has reached out to you via phone to try to resolve your concerns personally. I hope they’ll be able to work with you to find a resolution that meets your needs. Again, thank you.

  2. Julie Poor says:

    We co-signed a student loan for our daughter with Astrive who has now gone out of business so Wells Fargo now owns the loan. I called them to ask what her payment is going to be and they said they had to adhere to the terms she agreed with Astrive and the payment would be about $50 per month. We just got a statement from AES and it says the payment will be close to $80 per month? Are AES and Wells Fargo affiliated and how do we know which amount is correct?

    Thank you,
    Julie Poor

    • Barbara Raus Barbara says:

      Hi Julie – Would you send us some more details on your situation through the Ask the Expert tool? Account numbers would be very helpful to help us research your situation.

  3. KS says:

    AES/Well’s Fargo has denied my application for military deferment, even with documentation from the Personnel Officer and Commanding officer. My Direct Loans have been in military deferment since September 2011. Even though both entities are Federal loan servicers, Well’s Fargo has denied my military deferment. Very upsetting and that is why I will not do any further servicing with Well’s Fargo or its subsidiaries

    • Barbara Raus Barbara says:

      KS — I’m sorry to hear about your experience. Would you please use Ask The Expert on the right side of the page to email us with more information? I’d like to escalate your situation to our Executive Office.

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