Student loans can have a great effect on a student’s financial life especially in the long term if not properly planned. Understandably these loans are important to college students because they provide financial support especially in covering the cost of tuition and other related materials. Most students won’t be able to afford college and further their professional career without these loans. However, with loans comes the burden of repayment especially when dealing with a hefty amount like $70,000. However, before searching out options to help you repay your loan, there are factors that may affect your repayment options which you must be aware of.

Factors affecting student repayment

Student loan repayment can, to a great extent, affect a student’s financial life as such there are necessary factors you must consider before taking the step to pay off your loan. These factors will assist students to manage their repayment more effectively.

Interest Rates

Interest rate is the percentage of the loan amount which you will be charged by the U.S. federal government for the amount you borrowed. The interest rate paid on a loan greatly affects the repayment amounts and the total amount you will be required to pay per month over the loan’s term. Typically, federal students have a fixed rate on their loans, this rate remains constant throughout your loan repayment term. However, private loans could have fixed or variable interest rates which fluctuate based on the market conditions. Note that higher interest rate results in greater monthly repayment and overall, greater cost during the loan term.

Loan Term

The duration of your loan term, that is, the time you’re expected to pay back the loan can significantly affect your monthly repayment amount. Shorter loan terms result in greater repayment amounts while longer terms can significantly reduce the amount you’re required to pay each month as repayment for your loan. To manage your loan repayment more effectively, you need to choose a loan term or duration based on your financial condition. 

Repayment Plan

There are several repayment plans which offer varied flexibility and subsequently affect your interest rate, loan term and monthly repayment amount.

Loan Forgiveness Programs

There are loan forgiveness programs that students can take advantage of such as Public Service Loan Forgiveness (PSLF) which can have a great impact on your loan repayment plan. Such programs can reduce or completely eliminate your loan balance, relieving students of the financial repayment burden. However, you will be expected to meet certain requirements like working in a public service office or making your payment via an income driven plan.

Financial Situations and Economic Conditions

Any change in your financial condition such as loss of job can significantly affect your repayment options. Economic conditions such as inflation can affect your ability to repay your loan.

Monthly repayment for a $70,000 student loan

To accurately calculate your monthly repayment for a $40,000 student loan, you need a repayment plan.

Standard Repayment Plan

The standard repayment plan is one of the most common methods of replying student loans as it requires fixed monthly payments over a 10 year period. The interest rate is varis based on the type of loan, loan disbursement date.

Examples for a $70,000 loan:

• Interest Rate: 3.73%

Monthly Payment: $690.59

• Interest Rate: 5%

Monthly Payment: $743.36

• Interest Rate: 6.28%

Monthly Payment: $804.53

This plan is more beneficial to those who can manage consistent payments and prefer to pay off their debt within a decade.

Graduated or Income-Driven Repayment Plan (IDR)

Graduated and income – Driven (IDRs) offer more flexibility, especially for students with a dynamic income or low income earners. Your repayment amount is based on a percentage of your current income. This type of repayment option starts off lower and increases every two years.

For example, if you earn an income of $50,000 every year and are single, your payment could start for as low as:

• Monthly Payment: $200 to $300

As your income increases, your monthly payment will be adjusted accordingly. IDRs are beneficial for students with variable incomes or who are just starting their careers.

Extended Loan Repayment

The extended loan repayment plan is for students who need lower monthly payments. This means that your loan term will be extended to suit your monthly repayment amount which can be up to 25 years. However, this increases the student’s interest rate. 

Examples for a $70,000 loan at different interest rates:

• Interest Rate: 5%

Monthly Payment: $407.12

• Interest Rate: 6.28%

Monthly Payment: $457.83

This plan is advantageous for students who need to lower their monthly financial burden.

Check how much you have to pay according to the amount of the student loan:

• What is the monthly payment on a $10,000?
• What is the monthly payment on a $20,000?
• What is the monthly payment on a $30,000?
• What is the monthly payment on a $40,000?
• What is the monthly payment on a $50,000?
• What is the monthly payment on a $60,000?
• What is the monthly payment on a $70,000?
• What is the monthly payment on a $80,000?
• What is the monthly payment on a $90,000?
• What is the monthly payment on a $100,000?
• What is the monthly payment on a $110,000?
• What is the monthly payment on a $120,000?
• What is the monthly payment on a $130,000?
• What is the monthly payment on a $140,000?
• What is the monthly payment on a $150,000?
• What is the monthly payment on a $160,000?
• What is the monthly payment on a $170,000?
• What is the monthly payment on a $180,000?
• What is the monthly payment on a $190,000?
• What is the monthly payment on a $200,000?