Did you know that more than 50% of students leave school with debt? Choosing the career you want, getting into an education institution, finding a job and handling student loans can all be very intimidating, and adult life can be scary. We at Degree Solutions want to make your life as successful yet peaceful as possible, which is why we are going to break down the different types of federal student loan repayment programs so that you can choose what better suits your needs and feel the weight lifted off your shoulders.
The total student loan debt is $1.75 trillion and constantly increasing, which means that many people carry their debt well into their middle age! This is why understanding student loan repayment programs is so important. Repayment programs can be divided into two categories, traditional repayment programs and income-driven repayment programs. Each of these have their own particular requirements, as well as pros and cons. Let’s begin with the traditional repayment programs.
Traditional Repayment Programs.
These can be further divided into a few subcategories, Standard, Graduated, and Extended.
The Standard Repayment Program is perhaps the shortest option, offering fixed payments over a 10 year period. Because payments don’t change and have a specific period of time, you will pay less interest as you would in other repayment programs. Additionally, the fixed monthly payments, though they can be somewhat higher than in other programs, offer a stability in amount that allows you to budget accordingly. Now, a very important thing to keep in mind is that if you are aiming to access loan forgiveness programs, the Standard Repayment Program is not for you, since Public Service Loan Forgiveness offers forgiveness after 120 payments, and with the Standard Program you will have paid by then.
As you can infer by the name of this program, the Graduated Repayment Plan offers monthly payments that are gradually increased every two years. This offers flexibility by starting with lower initial payments, which allows you to budget comfortably as you start in entry-level jobs. As you grow professionally and your income increases, so will your monthly payments. The period is 10 years, which also allows you to save on interest while still enjoying the flexibility of gradual increase in payments. The period can increase to 30 years if you access loan consolidation. It’s important to mention that if your income doesn’t grow as your monthly payment does, you run the risk of being burdened with unsustainable payments. When compared to the standar plan, you will pay a little more in interest, as these accrue during the years where you pay less.
The Extended Repayment Plan offers an extended payment period of up to 25 years. Besides the longer repayment period, the Extended Repayment Plan also offers the option of fixed or graduated payments that are generally lower than those of the previous plans mentioned. In order for you to be eligible for the Extended Plan, you must owe more than $30,000 in outstanding federal student loans, which inevitably leaves out some individuals. Now, just like shorter period payments have the advantage of paying less interests while the disadvantage of higher monthly payments, for the Extended Repayment Plan it is almost the other way around. The extended payment period allows for lower monthly payments, but it means that you will end up paying more interest over the 25 years (minimum) of the repayment period. Another important factor to keep in mind, especially if you are interested in student loan forgiveness, is that this plan does not allow you to access any Public Service Loan Forgiveness options.
Having explained the traditional repayment plans, here is a quick recap:
Income-Driven Repayment Plans.
Besides the already discussed traditional programs, you have the option of income-driven repayment programs, which, dare we be reiterative, base their monthly payment in your income and family size. With these programs you will be paying from 10% to 20% of your income during a payment period of 20 to 25 years. Once the payment period has been completed, any remaining debt can be forgiven. Let’s dive further into each of the IDR plan options.
Revised Pay As You Earn (REPAYE)
This plan offers a 20 year repayment period if your loans are for undergrad studies. If you have loans for graduate studies, your repayment period increases to 25 years. Whatever your period is, the plan sets your monthly payment at 10% of your discretionary income.
If your loans are substantial and your monthly income is not enough for you to pay interest payments, you can access government subsidizing. A very attractive quality of this plan is its flexibility. Basing monthly payments on income means that if income decreases, payments decrease. Additionally, the plan offers the opportunity to access loan forgiveness at the end of the repayment period. If you find that this plan is the best for you, keep in mind that you need to rectify income and family size every year in order for you to not be removed from the plan. As with most things, being organized is key. Another thing to keep in mind is that depending on your specific income and family size, you might be better off paying your loans under the Standard Plan for a lower monthly bill.
Pay As You Earn (PAYE)
Not to be confused with REPAYE, PAYE offers monthly payments of 10% of your discretionary income for a period of 20 years. Because of its monthly payment limits, regardless of your specific characteristics, you will never pay more than what you’d pay under the Standard plan. This makes it a good plan for those with high loans, as it offers longer payment periods, access to PSLF and monthly payment caps. Another benefit being that if income decreases, so do monthly payments. However, not just anyone is eligible to pay under PAYE, since this program requires borrowers to have received their first federal student loan on or after October 1st, 2007, as well as an additional loan on October 1st, 2011.
Income-Based Repayment (IBR)
To pay under the IBR means you will have monthly payments of 15% of your discretionary income. The period, however, changes depending on when you borrowed your first federal loans. For borrowers that got their loans on or after July 1st, 2014, the repayment period is 20 years. For borrowers that got their loans before July 1st, 2014, the repayment period is 25 years. Regardless of your repayment period, you will never pay more than what you’d pay under the Standard Repayment Program,which also makes this plan ideal for those with high loans that want lower monthly payments.
Income-Contingent Repayment (ICR)
On the more expensive side of repayment plans, the Income-Contingent Repayment plan sets a monthly payment of 20% of your discretionary income for a period of 25 years, or what you’d pay on a plan with fixed payments over 12 years. It’s very important to note that under the ICR, discretionary income has a slightly different meaning than it does for other repayment plans. In order to be eligible for the ICR, those interested must be Parent PLUS loan borrowers.
Income-Sensitive Repayment (ISR)
This program is specially aimed towards low income borrowers with Federal Family Education Loan (FFEL) Program loans, making it a requirement for eligibility. The repayment period is 10 years, but the monthly payment is determined by the lender for each individual based on their annual income. The second requirement for ISR is that the monthly payments are more than 20% of your income. Keep in mind that though monthly payments are determined by the lender, they are still based on income, which means that if income decreases, so will the monthly payments.
Let’s see a recap of Income-Driven Repayment Plans (IDR):
Choosing the student loan repayment plan that is right for you is an important decision that, if done correctly, will save you from many headaches. Considering your specific needs, income and overall situation before deciding on your repayment plan is a must, and information is better understood when it is served to you in an easy-to-digest manner. This is exactly what we want, for you to get the right information, quick and easy. Once you better understand how to handle your student loans, furthering your education becomes an even more exciting journey towards better opportunities.
A study by the International Workplace Group (IWG) found that around 70% of people globally work remotely at least once a week, but have you ever wondered what qualities and skills make a good remote worker? Let’s focus on those who have mastered the art of online work: remote students. The 2023’s ninth annual Online Education Trends Report by BestColleges showed that 95% of online students recommend online learning, while 43% of school administrators plan to continue offering online options. This means that remote learning and working is here to stay. And here’s the thing, in a world where remote jobs are gaining popularity, remote students have undeniable advantages. With this, a compelling thesis arises: online students possess qualities that make them exceptionally well-suited for remote work. The ability to work remotely has become a highly sought-after skill, and it so happens that online students are inherently better prepared for an online job. These skills include better adaptability to changing environments, more autonomy and proactivity that has risen from their experience in online learning, a better understanding of the particular dynamics of relationships through the digital realm and more flexibility that helps with mental health. Let us dive deeper and tell you how.
Better Work/Home Adaptability.
The first key challenge when working from home is the need to find a harmonious balance between personal and professional responsibilities, knowing how and when to divide your time and efforts between your professional and personal lives. While remote jobs offer the opportunity to break free from the confines of a traditional office, meaning workers can choose their preferred work environments, this flexibility gives rise to unique challenges, such as managing household chores, looking after children or pets, and other common obligations while remaining productive in their job. In order to successfully manage these two incredibly important aspects of life, individuals must have the talent of adaptability, time management skills, and a strong sense of responsibility.
What’s particularly intriguing is that research has unveiled the remarkable ability of remote workers, including online students, to navigate this balancing achievement without any detrimental impact on their work performance. Thanks to distance learning programs, online students quickly learn how to balance multiple commitments, while also meeting their objectives and deadlines. Online students are able to seamlessly integrate their coursework with their daily responsibilities better than brick and mortar students are. For online students, productivity is a mindset that they can set themselves in regardless of their surroundings in a way that is faster and more natural than for traditional students. This skill translates effectively into remote work environments! Having the skill of prioritizing and scheduling activities efficiently, distance learners are able to navigate the different aspects of their life with minimal disruption to either side.
A perfect example of this phenomenon is supported by a study by John B. Henke, Samantha K. Jones and Thomas A. O’Neill published in Frontiers in Psychology, which found the skill sets that are particularly useful and necessary for remote work.
Autonomy and Self-Efficacy.
Key factor for the success of remote work is the ability to operate autonomously and efficiently! Remote workers do not have their boss next to them, micromanaging what they are doing or reviewing progress every second of the day. Remote workers are, in fact, sometimes not even seen by their boss unless they have a virtual meeting. This means that the best remote workers are efficient and proactive without needing someone to guide them every day. It’s unsurprising that online students possess a natural advantage thanks to their unique educational experience. Online students, by the very nature of their learning environment, often develop a keen sense of autonomy and self-efficacy. They navigate their educational journey independently, effectively managing their time, tasks, and resources, prioritizing activities and due dates, without getting distracted by their environment. They know how and when to work, and do so efficiently. Online students did not have a teacher hovering over them and making sure they were doing their school work, meaning they do not need their hands held step by step. This is a fabulous quality for remote workers. This self-driven approach to education translates to remote work environments, where autonomy and self-efficacy are highly prized attributes!
Research has shown that remote workers that are autonomous and self-efficient thrive in remote work environments where they require minimal supervision and show a strong sense of responsibility for their work, regardless of the supervision they might or might not have. In fact, a research on the Perceived Challenges and Opportunities for a Sustainable Work Environment found that remote workers tend to have better feelings of autonomy and work-life balance than regular office workers, a characteristic further polished when the remote workers have self-management skills, like online students do.
This is further corroborated by the self-efficacy theory’s explanation for effectively managing remote workers in virtual organizations. According to the Encyclopedia of Human Behavior, the Self-Efficacy theory emphasizes the importance of the individual’s perceptions of their capabilities as key determinants of successful outcomes, meaning that everyone is capable of success as long as they have the opportunities to pursue their goals. It reinforces the notion that online students, with their well-honed autonomy and self-efficacy, can thrive in remote work settings.
Understanding of Digital Dynamics.
While autonomy and self-efficacy are important, they do not stand alone as the sole determinants of success in remote work. The role of employer support and workplace culture cannot be underestimated. Employers must cultivate an environment that encourages autonomy and independence, motivating employees to take ownership of their work and outcomes. The advantage for online students here relies on the fact that online students have experienced virtual or digital relationships in an online environment, which means they deeply value the support, guidance and communication from their instructors. They not only are able to recognize such support systems beyond their computer screens, but as the actual intrapersonal relation that they are. It can be said that online students thrive in the freedom granted by their superiors, while other more traditional workers might feel abandoned or forgotten.
Now, beyond the fact that online students are better accustomed to the dynamics of virtual relationships, employer support directly influences job satisfaction and performance. A 2017 research by the University of Birmingham found that workers that perceived higher levels of autonomy reported a bigger sense of job satisfaction. Similarly, a 2013 Taiwanese study on job autonomy by Health Promotion International proved that higher levels of autonomy meant lower likelihood of workers leaving their positions. This support goes beyond simple logistical assistance and includes open lines of communication that online students are already familiar with, whether that is online check-ins, emails or virtual meetings. In other words, online students who are already accustomed to managing their education independently, are well-poised to thrive in workplaces that provide the autonomy and the support they are familiar with.
Flexibility in Mental Health.
It’s not surprising that remote work, while offering multiple benefits and opportunities, has also presented some unique challenges to employees’ mental health. After all, it is a big change that challenges traditional views of what a workplace should look like. Add the physical separation from colleagues and the absence of an office environment, which can lead to feelings of isolation, stress, burnout and just plain confusion. Mental health concerns in the remote work landscape have, understandably, gained increased attention. However, online students have an irrefutable advantage! Since they have already navigated the world of virtual education, online relationships and digital tools, they often show a higher level of resilience and adaptability when it comes to their mental health. A study published in the British Educational Research Association found that individuals that had previous experience with online education reported lower levels of stress when transitioning to remote work compared to their traditional counterparts, who were less, if at all, accustomed to virtual learning and working environments.
Similarly, a study published in the Journal of Educational Technology & Society found that students with prior online learning experience tended to do better during the pandemic, when everything went remote. Not only is this reduced stress a benefit for online students, but it also is desirable in the eyes of the employer, as less stressed employees tend to provide better results and general independence. Online students have been able to develop a strong sense of work-life balance. They have learned to set boundaries between different responsibilities, a skill that translates to their professional lives by being able to compartmentalize and maintain a healthy separation between work and personal time. This not only contributes to their general mental health, but also to their work efficiency and productivity. A healthy employee is a productive employee!
Recently, organizations increasingly value a holistic approach to their employees’ well-being. Such organizations may find that individuals who have previously been online students are not only productive remote workers, but also individuals that contribute positively to the overall mental health culture within the organization, making online students even more valuable in the eyes of an employer.
In summary, the body of research surrounding remote work offers substantial evidence to the thesis that online students are exceptionally well-suited for remote work environments, meaning that not only do they do a better work at it, but have an easier time doing it. Their ability to balance home and work demands, their discipline, proactiveness, well-developed autonomy and self-efficacy clearly speak highly of their suitability as remote workers.
As the workforce continues its transformation, and remote work becomes increasingly prevalent, the strengths of online students in remote work settings become more valuable than ever. Their adaptability, efficient multitasking, and propensity for thriving in autonomous work environments position them as invaluable assets to organizations keen on optimizing their remote work arrangements.
While the studies we’ve spotlighted provide compelling evidence in support of the thesis, ongoing research in this field promises to provide even deeper insights. The ever-evolving nature of work and education suggests that online students will undoubtedly play a pivotal role in defining the future of remote work! If there was any good time to start your online education, this might be it.
Henke, J. B., Jones, S. K., & O’Neill, T. A. (2022). Skills and abilities to thrive in remote work: What have we learned. Frontiers in psychology, 13, 893895. https://doi.org/10.3389/fpsyg.2022.893895
2023 Online Education Trends Report (PDF). BestColleges. June 2023.
Babapour Chafi M., Hultberg A., Bozic Yams N. (2022). Post-pandemic office work: Perceived challenges and opportunities for a sustainable work environment. Sustainability 14:294. 10.3390/su14010294
M.W. Gallagher, in Encyclopedia of Human Behavior (Second Edition), 2012
Wheatley, D. (2017). Autonomy in Paid Work and Employee Subjective Well-Being. Work and Occupations, 44(3), 296–328. https://doi.org/10.1177/0730888417697232
Blossom Yen-Ju Lin, Yung-Kai Lin, Cheng-Chieh Lin, Tien-Tse Lin, Job autonomy, its predispositions and its relation to work outcomes in community health centers in Taiwan, Health Promotion International, Volume 28, Issue 2, June 2013, Pages 166–177, https://doi.org/10.1093/heapro/dar091
Schooley, R. T. (2015). Reply to Christopher and Kortepeter. Clinical Infectious Diseases, 61(9), 1489–1490. http://www.jstor.org/stable/26369011