Contact the Indiana Law Financial Aid Office
Phone: (812) 855-7746
E-mail: iulawfa [at] indiana [dot] edu
You have many options to choose from in repaying your student loans. Repayment plans can range from 10 years to 30 years. Other plans are based on income, regardless of your indebtedness. The shorter the repayment plan, the less interest you pay on your loans. There are also deferment and forbearance options available if you are unable to pay on your student loans for a period of time. These various repayment options ensure that your level of indebtedness will not impact your career choices.
In most cases, repayment of your federal student loans begins approximately 6 months after you graduate. You can access calculators on the Web to see how much you would be paying. For more information on all your repayment options please go to the U.S. Department of Education’s Federal Student Aid Web site.
The “College Cost Reduction and Access Act” created two programs which are of great importance to graduates who have high debts and low incomes, particularly for those who are planning a career in a public interest occupation (government and non-government organizations).
Loan Payments capped at 15% of montly discretionary income. Discretionary income is defined to be the adjusted gross income of the student (and spouse, if you file jointly) minus 150% of the poverty level for the borrower’s family size.
For example, a single borrower who owes $100,000 of debt at an interest rate of 6.8% with an adjusted gross income of $40,000 would pay $309 per month. The payment amount increases as earnings increase. This amount is significantly lower than the standard monthly payment of $1,155.
Any loan balance remaining after 25 years of repayment under IBR is forgiven. For more information about this program, please see: Income Based Repayment.
Potential Loan Forgiveness after 10 years of repayment. Borrowers who make 120 Direct Loan IBR payments (on-time) while engaged in a full-time public service occupation, can request that their remaining loan balance be forgiven.
For more information about the Public Service Loan Forgiveness Program, please see PSLF.
Indiana Law also offers a unique “Loan Reduction Assistance Program” (LRAP). The program, which provides grants of $2,000 to $6,000 to assist graduates as they prepare to take their bar exams and to start their careers, can give students an important financial bridge at a time when the funds are most needed.