Not Every Federal Student Loan Borrower Can Pay Extra Toward Their Debt, and That’s Okay, Says

ROHNERT PARK, Calif.May 18, 2018 /PRNewswire/ — Student loans can cause substantial financial stress to countless borrowers of all ages and debt levels. Some online sources tell young borrowers that they can easily get through their debt simply by paying a little extra each month. While charts showing how much they can save and how quickly they can get through that debt may be appealing, many borrowers simply do not have the funds to pay extra — or even to cover their minimum payment. Ameritech Financial, a document preparation company that helps federal student loan borrowers with federal repayment plan applications, reminds borrowers that the Department of Education offers a variety of repayment options that are intended to benefit a variety of situations.

“Not every borrower can put extra money toward their loans, and suggesting that it’s easy can cause extra stress for those whose financial situation is anything but easy,” said Tom Knickerbockerexecutive vice president of Ameritech Financial. “There are several repayment options available for federal student loans, and they are not one-size-fits-all as online advice might suggest.”

All federal student loan borrowers begin repayment in the Standard Repayment plan, which bases payment amounts on a 10-year payoff schedule. The plan features the lowest cumulative interest payments out of all available plans. Individuals who get a well-paying job or are in a financial situation with few other expenses might find the most success in the Standard plan.

The Extended Repayment plan is similar to the Standard plan in that it calculates payments based on a set payoff period, but the period is longer to reduce payments for borrowers who need lower payments. Alternatively, the Graduated Repayment plan features lower starting payments that increase every two years and end in complete payoff in 10 years.

Federal income-driven repayment plans might be the most flexible of available federal plans. Such plans calculate payments as a percentage of discretionary income, which uses income and family size information, and can end in forgiveness of any remaining balance after 20 to 25 years of enrollment. IDRs require yearly recertification for continued enrollment but may benefit borrowers with low income, high balances and/or large families.

Paying extra toward student loans can benefit borrowers in any repayment plan, but it’s not a one-size-fits-all-solution even for those who can afford to do so. For example, borrowers hoping to receive Public Service Loan Forgiveness should be aware that paying extra may disqualify future payments and set them back in their progress.

“At Ameritech Financial, we help borrowers understand IDRs in the context of their own situation and apply for them if a consumer is interested,” said Knickerbocker. “Our hope is that such programs can reduce payments and allow borrowers to focus on reducing their financial stress or working toward other financial goals that they might not have been able to focus on otherwise.”

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional customer service.

Ameritech Financial Newsroom


To learn more about Ameritech Financial, please contact:

Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928

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