Iowa College Aid Advises Iowans to Make Plans for Student Loan Repayments During Forbearance


DES MOINES, Iowa– President-Elect Joe Biden, has promised to extend the nearly year-long pause on federal student loan payments. However, Iowa College Aid wants local borrowers to be prepared for when those payments resume. 

There are three different options for student loan repayments. 

The first is what’s called a fixed plan. This means monthly payments stay the same until a loan is completely paid off.

The second is the graduated plan. During the graduated plan a monthly payment will increase at specified times, usually every two years. 

The third plan is income based, meaning payments will be a percentage of an annual income.

The spokesperson for Iowa College Aid, Elizabeth Keest Sedrel, said a graduated plan is the best for those who have a steady income with a guarantee of a salary increase. Keest Sedrel said an income-based plan makes the most sense for those whose income has been impacted by COVID-19. 

Keest Sedrel said Iowans should also take advantage of the interest rate being set at zero percent.

“If you have not had any interruption to your income and your interest rate has temporarily been set to zero, you can pull ahead, you can come out ahead in the long run if you continue making those payments,” Keest Sedrel said. 

Borrowers have the option of extending a loan repayment period to lower the cost. However, Keest Sedrel warns this could cost an individual more in the long run due to interest rates. 

The state agency says if someone is still facing financial barriers when payments resume, they should reach out to their loan server as soon as possible. 

“Don’t wait for them to contact you, going into default on a student loan not only damages your credit rating, but it also cuts off this possibility of changing to an income-driven repayment plan, and it cuts you out of potential loan forgiveness programs down the line,” Keest Sedrel said. 

Borrowers are allowed to change their plans at any time. If you wish to do so, contact your loan server. If you are unsure who your loan server is, visit the Federal Student Aid’s website


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