Changing your student loan payment plan may generate lower monthly payments but it could wind up costing you more in the long run.

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You can modify your federal student loan repayment plan as often as your need to and it is encouraged that you do so if you are facing financial hardship—it is better to get out ahead of the issue than defaulting on your federal student loan.

Aside from opting for a lower monthly payment, if you are having trouble paying your monthly loan balance, you may want to also consider other options, like a student loan forbearance or a deferment. For some, postponing payments is all that is needed to get back on track with their regular payment amount.

Keep in mind that if you do opt for a change in your student loan repayment plan with a lower monthly payment requirement it could affect your how much interest you end up paying over the term of your repayment plan. It is important to consider all aspects of changing payment plans, from the increase in interest to the consequences of not being able to afford your current payments.

Options For Lower Student Loan Payments

For the average graduate, you are enrolled in the Standard 10-Year Repayment Plan following the end of your post-graduation deferment period. This plan takes your balance owed, plus interest and divides it over 10 years to calculate your flat, unchanging monthly payment. For some, this plan allows for easy to manage and budget for payments. For others, this repayment option requires more of a payment than can be affordable, so what are your options to avoid defaulting on your federal student loans?

  • Temporary Lower Payments

The Graduate Repayment Plan maintains the 10-year plan of the Standard Repayment Plan but the amounts in the initial years are much lower; however, over the length of the repayment term, the required monthly balance increases. The graduated increases occur every 2 years, so this plan does allow you to plan ahead for the larger payments to avoid being blindsided. By the end of the term, the payments are much higher than that of the Standard Repayment Plan. Often a great selection for someone who expects to make more money as more time in their current employer passes.

  • Consistent Lower Payments

The Extended Repayment Plan is available to borrowers with Direct Loans of $30k or less. It takes your current payment term of 10 years and stretches it across 25 years—making your payments consistently smaller but for much longer. Another option to have lower payments is to consolidate your federal student loans—some terms are 30 years long; the longer terms often correlate to smaller monthly payments.

  • Income-Based Payment Options

There are four options provided by federal student loan providers that fall under the income-based category: Pay As You Earn, Revised Pay As Your Earn, Income-Based, and Income-Contingent. With each of these options, your payment will never be higher than 10-20% of your discretionary income (depending on which of the four you go with). Also, the repayment term is often 20-25 years in length; while this is longer than the Standard Repayment Plan, any remaining balance after this term is forgiven. This category is the repayment plan option you want to be on if you are interested in Public Service Loan Forgiveness.