Many Wisconsin students finance their education by taking student loans, either backed by the federal government or private banks. No guarantee exists that after completing their education, these students would secure high-income jobs in their chosen fields of study. If a student is unable to repay loans after graduation, filing for bankruptcy is not an option to relieve student loan debt.

Various forms of student loan repayment options exist, under which a student may file for debt relief. The first option for student loan repayment is paying the monthly payments as required. Standard repayment means paying more than original principle, usually with low interest rates making the overall payment less in the long run. The repayment schedule is limited to 10 years under the standard plans. Another option for student loan repayment is gradual repayment. Under this option, monthly installments begin low and increase with time, tapping into the idea that students will be successful and have greater income in the future.

Income-based student loan repayment may be another option available to students. Under this plan, the loan repayment amount is calculated based on the income of the individual. A debtor’s annual income or the combined income of a marital home becomes the factor for determining the monthly amount of an income-based repayment plan.

A student may also opt for consolidation of all loans for facilitating debt relief. Consolidating the debt may also help lower monthly installments by grouping the loans as well as extending the period of repayment of the loans. Extending the repayment period may also lead to greater interest payments. One may consider consolidating loans may be a good idea if consolidation lowers the interest rate and the monthly repayment to an affordable amount, even if the term of the loan is longer.

Source: FindLaw.com, “Student Loan Repayment Options,” accessed on Aug. 28, 2014