And in some cases involving an income-driven repayment plan, Public Service Loan Forgiveness could cancel the remaining debt after 120 qualifying payments, or 10 years or more of payments. But not everyone qualifies and the rules are complex.
And what about students who are stuck in low-paying jobs for years and years? They're deferring making higher payments each month, while the interest is building and building under an income-driven plan.
Opting for the standard repayment plan for federal loans would trigger slightly higher payments than income-driven plans. Yet over the long run, you'd pay off your loan sooner and pay the least amount of interest.
College graduation season should remain a time of happiness and hope. But the reality is most grads really need to think about paying off those student loans nearly minutes after they take off that cap and gown. ___ ABOUT THE WRITER Susan Tompor is the personal finance columnist for the Detroit Free Press.