Home |Student Loan | Should I consider consolidating my federal student loans, which have varying interest rates ranging from 2.5% to 5.05%, now that the grace period is ending and interest rates are starting up again? I've also heard about different repayment plans on FAFSA, like the SAVE plan, but I'm not sure how they work. What would be the best approach for paying off my total student loan debt of $60,000, with $30,000 each from Federal and Private, considering my private loan interest rate is 5.64%?

Should I consider consolidating my federal student loans, which have varying interest rates ranging from 2.5% to 5.05%, now that the grace period is ending and interest rates are starting up again? I've also heard about different repayment plans on FAFSA, like the SAVE plan, but I'm not sure how they work. What would be the best approach for paying off my total student loan debt of $60,000, with $30,000 each from Federal and Private, considering my private loan interest rate is 5.64%?

Abbey Johnson, Helping with Student Loan Documentation
Answered on September 25,2023

FAFSA is the Free Application for Federal Student Aid and it is the thing you fill out to get aid when trying to go to school

For your 30k in federal loans, you can choose the standard (10 year repayment) which should be around ~$300 a month. Or you can do an IDR (income-driven repayment) plan.

The standard plan is a fixed term fixed payment plan set to pay your loans off over 10 years.

IDR plans are generally based on a portion of your discretionary income (meaning they are not set to pay off your loans--although they can--and the amount you pay changes with your income).

SAVE is an IDR plan that will waive the interest that accrues monthly above your minimum required payment --so if you have a $20 payment and accrue $50 in interest, they will waive that $30 difference. If your calculated payment is $50 (or higher) in the same scenario, there is nothing remaining to be waived so you get no interest benefit.

Here is the main page on federal student loan repayment and they do a good job of laying out your options. But in general, refinancing your federal loans to private (which is also covered on this page) is generally not advisable.

Student Loan Repayment

Guide

Ultimate Guide on SAVE Plan - Payment Calculation, Interest, Forgiveness

Under the Saving on a Valuable Education (SAVE) plan, a single borrower who makes less than $15 an hour will not have to make any payments. Borrowers earning above that amount would save mor..
Click here to get a detailed guide

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