Student Loan Repayment: Finding the Best Plan for You

Student Loan Repayment: Finding the Best Plan for You Working in Skilled Trades

Pursuing a career in skilled trades, such as plumbing, electrical, or welding, can be a smart decision as these fields are in high demand and often offer good salaries. However, many students in these fields may be burdened with student loan debt, which can be a challenge to manage. Fortunately, there are several repayment plans available to make managing the debt easier.

The first step is understanding what type of loans you have. Skilled trades students usually encounter student loan options such as federal student loans, state-based loans, private loans, and institutional loans. Knowing the type of loans you have will help you determine which loan repayment plan would be best for you.

Federal Student Loan Repayment Plans

Federal student loans offer several repayment plans that can help you manage the repayment of your student loans. These repayment plans may vary based on the type of loans you have, and usually, you will choose the repayment plan that is best suited to your financial situation.

1. Standard Repayment Plan

The standard repayment plan is the default repayment plan for federal student loans, meaning this is the plan that most borrowers will be on until they choose to change it. Under this plan, you will make fixed monthly payments for ten years until your loan is fully paid off.

2. Extended Repayment Plan

The extended repayment plan allows you to extend the repayment term to up to 25 years. You can choose to have fixed or graduated payments under this plan, but the longer the repayment term, the more interest you will pay.

3. Income-Driven Repayment Plans

Income-driven repayment plans (IDRs) are based on your income and family size. Under these plans, your monthly payment amount will be a percentage of your discretionary income. Some of the popular IDR plans include PAYE (Pay As You Earn), REPAYE (Revised Pay As You Earn), and IBR (Income-Based Repayment). These plans are designed to accommodate low-income borrowers who cannot keep up with their monthly payments.

State-Based Repayment Plans

In addition to federal student loans, many states offer their own repayment plans for students who attend schools within their states. These plans may vary, but many offer income-based repayment options and the ability to make interest-only payments to help reduce the overall amount of interest paid over the life of the loan.

Private Loan Repayment Plans

If you have private student loans, your repayment options may vary widely depending on your lender. However, most private lenders offer some type of forbearance or deferment options if you find yourself struggling to make payments. You may also be able to refinance your private student loans to secure a lower interest rate or extend the repayment term.

Institutional Loan Repayment Plans

Individual schools may also offer their own repayment plans for students who borrowed institutional loans. These plans are usually based on a student’s income and family size, but each school will have its own set of repayment terms and plans.

Bottom Line

Managing your student loan debt can be challenging, but it is important to understand the options available to you. Speak to your loan servicer to gain insight into your repayment options and choose a plan that works best for your financial situation. Review each of the listed repayment plans, and determine which ones you qualify for or pay the most competitive interest rates. This decision will have a significant impact on your financial future, so take the time to research each one carefully.

Photo of the Remarkables mountain range in Queenstown, New Zealand.
Photo of the Remarkables mountain range in Queenstown, New Zealand.

> For one on one or group assistance with personal finance, STR recommends that you check out the following resources:

> Inaccuracies with Bureau of Labor Statistics (BLS) data: Many of our blog posts will quote BLS data. has been able to identify that data quoted specifically for Skilled Trades can be as much as 50% LOW in many USA labor markets. For more information on these inaccuracies please visit the STR national labor survey page at the link below. On this page there is a video containing the latest information at the top of the page as well as other information. If you currently work in skilled trades, PLEASE consider participating in our national labor survey.

CLICK HERE for more Information

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