The best thing about student loan repayment plans is that they generally don't require repayment until after the student has left school. This includes leaving the school early as well as fully graduating. Since the government is taking a chance on the education of a student, they are figuring that the student is serious about their education and wish to finish their entire schooling. School can be stressful as it is, and most students don't earn a lot of money while attending school. So the repayment plans allow the student to not have to worry about paying back the money borrowed until they have the chance to look for a good job. Nothing is required during the time attending school.
Another good thing about student loan repayment is that the interest rate is generally better than most other forms of loan. The federal government knows that in order to boost the economy, payments for student loans has to be within the reasonable ability of the student to pay it back. By using the lowest interest rate possible, the student will have a greater chance of being able to pay it back with ease. This is a perfect win-win situation since the government still makes enough money to justify loaning the money, while the student is able to save enough money to make the loan an attractive option for completing school.
Student loan repayment allows for a loan settlement option, if things seem to get too difficult to handle. The loan can still be difficult to get control of, even with its superior options. Even people with the best intents, who are in a better position, can find repaying a loan tough. So the government allows for the option to settle the loan. What this means is that after being late for a certain amount of time, the student can offer to pay off the entire loan at a reduced rate. This is normally about 20-30% of the original amount of the loan. This will make the student's credit rating go down a bit, but it will complete the student loan repayment process.
When deciding to continue with higher education, it may be a good idea to look into the options available for student loan repayment plans. Payment usually isn't required to begin until several months after the student completes school. The interest rate for a student loan is usually much lower than most other types of loans. If things get too hard to handle, the government will normally work with the student in order to agree on a loan settlement. These all combine to make the option of securing a student loan repayment plan a very attractive idea.
Justin Z Smith has made a study of various loan repayment options available.
