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College Students and Recent Grads, Reviews

Graduated Repayment Plan Review and Process

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Are you struggling to make the minimum monthly payments on your Federal student loans? Are you aware of all the repayment plan options available to you? Even if you don’t qualify for income-driven payment plans, there’s another plan that may help to make your payments more manageable: the Graduated Repayment Plan.

This plan and the Extended Repayment Plan aren’t based on your income, can be easier to qualify for, and both options lower your monthly payment. If you need a break from trying to make ends meet when it comes to your student loans, read on to find out how the Graduated Repayment Plan can help.

How Does the Graduated Repayment Plan Work?

If you’re familiar with the Extended Repayment Plan, it has a graduated payment option within it that works much the same as the Graduated Repayment Plan itself. Essentially, you pay your loan back on the same 10-year term as you would normally, but your payments initially start out lower, and then increase every two years.

You can also choose to pay your loans back under the Graduated Repayment Plan if you consolidate them (using a Direct Consolidation Loan). In this case, you have up to 30 years to pay back your loans. Curious to know what your repayment term might be under consolidation? Check here for a chart that details what terms you’re eligible for based on your total amount of Federal student loan debt.

According to studentaid.ed.gov, under the Graduated Repayment Plan, your monthly payment “will never be less than the amount of interest that accrues between payments,” and it also “won’t be more than three times greater than any other payment.”

That means your payments will be high enough that you won’t fall behind with interest accruing month after month. For example, if you were paying $10 per month, but $20 in interest was accruing between payments, that wouldn’t be good. The last part is assuring you this payment option will never exceed three times any other payment option available to you. The Graduated Repayment Plan might not offer you the lowest monthly payments, but it will be lower than what you’re paying under the standard 10-year plan.

Which Federal Student Loans Are Eligible?

Only Federal student loans are eligible for the Graduated Repayment Plan. If you have private loans, you’ll have to speak with your lender to see if any repayment assistance options are available to you. Each one offers different programs.

Studentaid.ed.gov provides the following list of loans that are eligible for the Graduated Repayment Plan:

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS Loans
  • Direct Consolidation Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans

There are no additional eligibility requirements you need to meet to make payments under the Graduated Repayment Plan.

How Can I Change My Repayment Plan?

If you’d like to change your repayment plan from the standard 10-year plan to the Graduated Repayment plan, call your student loan servicer and ask if they can make the change for you. You might be able to find the option to change your repayment plan online on your account as well.

Before changing, make sure to ask your loan servicer if you’re eligible for any other repayment plan options that provide a lower monthly payment. You can also check out the U.S. Department of Education’s Repayment Estimator to see what options are available for you.

How Does the Graduated Repayment Plan Compare?

Even though there isn’t a laundry list of eligibility requirements for the Graduated Repayment Plan, that doesn’t mean it’s automatically the best one to choose. If you’ve taken a look at the Repayment Estimator and aren’t sure which plan to choose, here are a few things to consider.

The Graduated Repayment Plan can be compared with the Extended Repayment Plan, as the latter actually has a graduated payment option. The two are quite different, though. The Graduated Repayment Plan is on a term of 10 years – the same as the Standard Repayment Plan. The Extended Repayment Plan offers terms up to 25 years.

With both plans, you’ll pay more money overall throughout the life of your loan than you would under the Standard Repayment Plan. You’ll likely pay more with the Extended Repayment Plan, given the extra 15 years you have to make payments.

If you’re wondering why you’d pay more over the Graduated Repayment Plan when it’s on a 10-year term, it’s because your payments start off lower and increase every two years. When your payments are lower, less is going toward principal and more is going toward interest. Most of the time, initial payments on the Graduated Repayment Plan are interest-only. As a result, your balance isn’t going down very quickly.

Aside from that, to be eligible for the Extended Repayment Plan, you need $30,000 in Direct Loans or $30,000 in FFEL Loans. The Graduated Repayment Plan doesn’t require you to have a certain amount of debt to qualify.

Income-driven repayment plans require proof of financial hardship, and some are based off your annual income, making them harder to qualify for.

Who Benefits the Most from the Graduated Repayment Plan?

Recent graduates just starting out in their career benefit the most from the initial lower monthly payments the Graduated Repayment Plan provides. Depending on how much student loan debt you graduated with, it can be tough to afford your minimum payment under the standard 10-year plan when you’re earning an entry-level salary.

The Graduated Repayment Plan gives you a little breathing room and allows your salary time to grow with your increased monthly payments. However, once your salary catches up, you might want to consider paying extra each month so you’re not paying as much in interest over the life of the loan.

What if I Have Private Student Loans?

As we mentioned, private student loans don’t have access to any of the Federal repayment programs. However, it’s still worth talking to your lender about your options. Some private lenders are willing to work with borrowers, giving them access to forbearance or the option to undergo a loan modification.

Additionally, you can also apply to consolidate your loans, as many consolidations offer extended repayment terms with lower monthly payments. Only do this as a last resort – some lenders charge origination fees to consolidate, and you want to make sure the savings are worth it.

Evaluate All Your Options

There are many repayment plans available to Federal student loan borrowers. If you’re eligible for more than one plan, do your research to ensure you go with the one that will save you the most money every month.

Take a look at the Repayment Estimator before calling your student loan servicer so you’re informed about the different plans, and don’t be afraid to ask for their opinion. Their job is to help place borrowers in the plan that makes the most financial sense for them – for free.

Don’t forget, you can always increase your payments as you go along if you find you have the extra money. This will help you pay less in interest over the life of the loan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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College Students and Recent Grads

CommonBond Student Loan Review: Pros and Cons

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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If you’re seeking a private student loan for your first or second degree, it’s hard to go wrong with CommonBond. The online lender’s interest rates, customer service and repayment flexibility beat many competitors — if you meet its sometimes restrictive eligibility criteria.

Of course, the operative question is whether CommonBond is the best provider for your loan. Let’s review the company to find out.

CommonBond student loans in a nutshell

CommonBond offers in-school financing for just about every type of borrower except for parents (although it does offer Parent PLUS refinancing if you want to lower your federal loan rates down the road).

Whether you’re an undergraduate, graduate, MBA student, dental student or medical student, you can check your potential interest rate without affecting your credit. In fact, you’ll just need to input your school name and degree type as well as your income (and your cosigner’s) and credit score before possible rates display.

Image credit: CommonBond – Individual results may vary

If you decide to proceed with a formal loan application — you can apply on any device — here’s what you can expect from CommonBond student loans:

  • No application, origination or prepayment fees (MBA, dental and medical loans carry a 2% origination fee)
  • Fixed and variable interest rates
  • Option to borrow from $2,000 to up to 100% of your school’s cost of attendance
  • Repayment terms of 5, 10 and 15 years available for undergraduates and terms of up to 20 years for dental and medical students
  • 4 in-school repayment options, including full deferment
  • 6-month grace period
  • A 0.25% discount for enrolling in autopay
  • Option to apply to pause your payments for up to 12 months of forbearance
  • Ability to release your cosigner after 2 years of timely payments

The highlights of CommonBond student loans

A competitive interest rate is a key feature when comparing lenders. CommonBond not only features relatively low fixed and variable rates, but it also provides discounted rates to borrowers who make automatic payments (0.25% reduction) and begin repayment while enrolled in school (discount varies). If you qualify for an 8.03% rate, for example, you might reduce it to 7.30%, saving you at least hundreds of dollars of interest in repayment.

Aside from attractive rates, here are other highlights of CommonBond loans:

Receive a free ‘Money Mentor’

If you and your cosigner want some assistance with the college financial aid process, you might welcome the free support provided by CommonBond. The online company pairs you with a Money Mentor — a trained college student who’s been there, done that and is ready to answer your questions over text.

“We make sure to empathize with students — going to and paying for college is a really stressful and emotional time,” Money Mentor CEO Kelly Peeler told Student Loan Hero. “Not only is it confusing figuring out how loans are, it’s also overwhelming doing that while trying to find housing, pick out classes and live with new people.”

If you have questions that are specific to CommonBond, the lender’s customer service team is also available over the phone and live chat on weekdays until 8 p.m. EST.

As for other unique perks of borrowing from CommonBond, MBA students could participate in CommonBond’s New York-based internship program and take part in the company’s summer workshop series.

Rest easy with repayment protections

Although it falls well short of federal student loan’s safeguards, CommonBond’s private loans come with a safety net. If your finances are in trouble after leaving school, you could request to postpone your monthly payments via forbearance. CommonBond awards up to 12 months of forbearance during your repayment.

In addition, dental students can defer repayment until after completing their residency, while medical students could limit their monthly payments to $100 during residency programs, including internships, fellowships and research.

Give back to other students

You might not feel great about borrowing student loans, but CommonBond delivers a silver lining. When a new customer takes out a loan, the lender funds the education of a child in a developing country, such as Ghana.

CommonBond claimed on its website to have raised over $1 million and built more than 470 schools through its work with the nonprofit Pencils of Promise.

The fine print of CommonBond student loans

CommonBond, which also refinances graduates’ student loans, is able to award decreased rates and increased perks, in part, because it’s more choosy than your average lender. It doesn’t lend to every student.

The strict eligibility criteria could leave you looking elsewhere, either because you’re ineligible or want to avoid a hassle.

Here’s what to keep in mind if you’re considering CommonBond:

A cosigner could be required

Many lenders request undergraduate student loans to bring a cosigner aboard because teens and 20-somethings usually have thin credit histories. A parent or someone else could help them qualify or receive a lower interest rate.

If you’re a creditworthy undergraduate or graduate student, however, you might bristle at the fact that CommonBond requires you to recruit a cosigner. For its part, CommonBond doesn’t require a cosigner if you’re an MBA, dental or medical school student, though.

If you don’t fall into one of these categories and want to try to qualify on your own, compare rates at lenders like Earnest that don’t require a cosigner.

There are other narrow eligibility requirements

Attaching a cosigner to your application (in the case of undergraduate and graduate students) isn’t the only hard-and-fast rule among CommonBond’s eligibility criteria.

The online-only lender cherry-picks its borrowers in other ways, too. Fortunately, if you don’t meet one or more of these criteria, you could probably find another, more accessible lender.

 CommonBond criteriaCompetitor to compare
Residency statusMust be a citizen or permanent residentProdigy Finance works with international students
Enrollment statusMust be currently enrolled at least half timeCollege Ave lends to part-time students
Credit scoreMust have a score of 660 and upCitizens Bank’s credit score requirement starts lower, at 620

Are CommonBond student loans right for you?

With competitive interest rates, responsive customer support and more repayment protections than your average private lender, CommonBond is worth considering for students of all levels. That doesn’t mean it serves all students equally.

Without cosigner requirements, MBA, dental and medical students seem to benefit most from CommonBond loans. Included are benefits like internship and career resources for MBA students and a residency deferment for dental and medical residents.

Of course, even if you have the cosigner or credit score to qualify, you might find a better student loan elsewhere. To set yourself up for a successful borrowing and repayment experience, compare CommonBond with other highly-rated private student loan companies listed on our site.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Andrew Pentis
Andrew Pentis |

Andrew Pentis is a writer at MagnifyMoney. You can email Andrew here

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College Students and Recent Grads

Top Checking Accounts for College Grads

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

For many college students, their default banking option while in school is a student checking account, which is typically free. Unfortunately, when you graduate you lose those benefits. Many student checking accounts will begin to charge you monthly maintenance fees unless you meet certain requirements.

So, where do you go from there?

Few young adults would turn to their parents for fashion or dating advice and, yet, one of the most common ways we’ve found young people choose their bank account is by going with whichever bank their parents already use. This could be a bigger faux pas than stealing your dad’s old pair of parachute pants.

The bank your parents use may carry fees or have requirements that don’t meet your lifestyle or budget, and make accounts expensive to use.

But where do you even begin to choose the right checking account?

When you’re nearing graduation, start planning your bank transition.

Many banks send a letter in the mail a few months prior to your expected graduation date informing you that your student checking account is going transition to a non-student account. If you’re not careful and you disregard the letter, you may be transitioned into an account that charges a fee if you don’t meet certain requirements.

You can always call the bank and ask to switch to a different account or you can choose a new account that offers more benefits, like interest and ATM fee refunds.

Account Name

Minimum Monthly Balance

Amount to Open

ATM Fee Refunds

APY

Simple$0$0None2.02% - 2.15% depending on balance
Aspiration Spend and Save Account$0$50Unlimited1.00% APY
Discover Bank$0$0NoneNone, but 1% cash back on up to $3,000 debit card purchases per month
Ally Bank$0$0Up to $10 per statement cycle 0.10% to 0.50% APY depending on balance
Consumers Credit Union (IL) Free Rewards Checking$0$0Unlimited ATM reimbursements5.09% on balances up to $10,000,
0.20% APY on balances between $10,000 and $25,000 and 0.10% APY on balances over $25,000
La Capitol Federal Credit Union Choice Plus Checking$0(if less than $1,000, there is a $8 fee)$50Up to $25 per month4.25% APY on balances up to $3,000 2.00% APY on balances $3,000-$10,000 and 0.10% on balances over $10,000
Boeing Employees Credit Union Member Advantage Checking$0$0Up to $6 per month4.07% APY on balances up to $500, 0.05% APY on balances over $500
TAB Bank Kasasa Cash Rewards Checking$0$0Up to $15 in ATM fees reimbursed4.00% APY (applies to balances up to $50,000)

The 5 key things you should look for in a checking account

When you’re shopping around for a new checking account, there are several things you should look for to ensure you’re getting the most value from your account:

  1. A $0 monthly fee: Sometimes banks may say they don’t charge a monthly fee but read the fine print — they may require a minimum monthly balance in order to avoid it. There are plenty of free checking accounts available for you to open, so there’s no reason to stay stuck with an account that charges a monthly fee. Take note, as some accounts may require you to meet certain criteria to maintain a free account like using a debit card, enrolling in eStatements or maintaining a minimum daily balance.
  2. No minimum daily balance: Accounts without minimum daily balances mean you can have a $0 balance at any given time. This may allow you to have a free account without meeting balance requirements — although other terms may apply to maintain a free account.
  3. Annual Percentage Yield: APY is the total amount of interest you will earn on balances in your account. Opening an account that earns you interest on your balance is an easy way to be rewarded for money that would typically sit without earning anything. You should definitely aim to earn a decent APY on your savings account.
  4. ATM fee refunds: You may not be able to access an in-network ATM at all times, so accounts providing ATM fee refunds can reimburse you for ATM fees you may incur while using out-of-network ATMs. Those $3 or $5 charges add up!
  5. No or low overdraft fees: Most banks charge you an overdraft fee of around $35 if you spend more money than you have available in your account. Therefore, it’s a good idea to choose an account that has no or low overdraft fees.

Top overall checking accounts for college grads

For the top overall checking accounts, we chose accounts that have no monthly service fees, no ATM fees, refunds for ATM fees from other banks, interest earned on your deposited balances and with strong mobile banking apps. While there is no all-inclusive account that contains every benefit, the accounts below are sure to provide value whether you want a high interest rate, unlimited ATM fee refunds or 24/7 live customer support.

1. Simple

Cash management app Simple acts as a hybrid checking and savings account with a generous APY and no fees. It features unlimited transfers between your checking account and Protected Goals account, as well as high APYs ranging from 2.02% on balances under $10,000 to a whopping 2.15% on balances over $10,000. Simple also provides fee-free access to 40,000 ATMs – although it doesn’t rebate ATM fees you might incur from machines outside its vast network. With built-in budgeting tools integrated into its app, Simple is a strong contender for the best checking account for college grads.

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on Simple’s secure website

2. Aspiration Spend and Save Account

The Aspiration Spend and Save Account offers a wide range of benefits for account holders and has few fees. The $50 amount to open is fairly low, and once you open your account there is no minimum monthly balance to maintain. Aspiration gives you up to five free ATM withdrawals per month.

As the account name suggests, there are two sides to the account: a spending sub-account and a savings sub-account. The spending side yields no interest, while the savings side earns 1.00% APY. To earn this APY, you must deposit at least $1,000 in the combined account monthly, or maintain a balance of $10,000.

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on Aspiration’s secure website

3. Discover Cashback Debit

Cracking our list for the best checking accounts for college graduates is Discover Bank, which takes a unique approach to checking account rewards. Instead of offering an APY on deposit balances, Discover opts for cash back as an incentive to get consumers to sign up for its checking product. The Discover Cashback Debit account offers up to 1% cash back on $3,000 of debit card transactions per month. That coupled with its zero fees and free access to 60,000 ATMs nationwide make it one of the best checking accounts for college graduates.

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Member FDIC

4. Ally Bank

Online bank Ally Bank offers a solid checking account with minimal fees, decent APYs and other attractive perks. Its Interest Checking account charges no monthly maintenance fees and provides free access to Allpoint ATMs nationwide, as well as a $10 reimbursement per statement cycle for any other ATMs fees incurred. Ally Bank’s APY isn’t too shabby, either: You can earn an APY of 0.50% with a $15,000 minimum balance. Other cool features include its Ally Skill for Amazon Alexa, which enables you to transfer money with just your voice.

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Member FDIC

Top high-yield checking accounts for college grads

Since most checking accounts offer little to no interest, high-yield checking accounts are a great way for you to maximize the money that typically would just sit in your account without earning interest. These accounts often offer interest rates that fluctuate depending on how much money you have in the account. However, in order to earn interest, there are some requirements that you may have to meet such as making a certain number of debit card transactions and enrolling in eStatements.

1. Consumers Credit Union (IL) Free Rewards Checking

The Consumers Credit Union (IL) Free Rewards Checking account is just that: Rewarding. It offers a tier-based APY, which includes a 5.09% APY on balances up to $10,000, 0.20% APY on balances between $10,000 and $25,000 and 0.10% APY on balances over $25,000. In order to earn the highest APY, you must complete at least 12 signature-based debit purchases, receive at least one direct deposit, ACH debit, or pay one bill through their free bill payment system, log into your online banking account and be signed up for eStatements and spend $1,000 or more with a Consumers Credit Union Visa credit card each month. This account has no fees and offers unlimited ATM reimbursements if requirements are met.

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on Consumers Credit Union (IL)’s secure website

NCUA Insured

2. La Capitol Federal Credit Union Choice Plus Checking

This checking account has a $2 monthly service fee, which can easily be waived if you enroll in eStatements.

While the terms state a minimum balance requirement of $1,000 and a low balance fee of $8, the fee can be waived if you make 15 or more posted non-ATM debit card transactions per month.

To earn the top interest rate on your checking balance, you just need to make at least 15 or more posted non-ATM debit card transactions per month. There are numerous surcharge-free La Capitol ATMs for you to use, and after signing up for eStatements you can receive up to $25 per month in ATM fee refunds when you use out-of-network ATMs.

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on La Capitol Federal Credit Union’s secure website

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3. Boeing Employees Credit Union Member Advantage Checking

Contrary to its name, anyone can join the Boeing Employees Credit Union – however, to do so, you must join the Northwest Credit Union Foundation’s “Friends of the Foundation,” which has a $20 membership fee. That $20 fee could be well worth it, though, if you take advantage of the credit union’s Member Advantage Checking account. This account has a generous 4.07% APY on balances up to $500, as long as you open BECU Member Checking and Savings accounts, sign up to receive eStatements and make at least one transaction a month. There are no monthly service fees, and the Member Advantage Checking account offers $6 per month in ATM fee reimbursements.

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on BECU (Boeing Employees Credit Union)’s secure website

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4. TAB Bank Kasasa Cash Rewards Checking Account

Based in Ogden, UT, TAB Bank’s Kasasa Cash Checking account is a great choice for recent graduates. You can earn a very competitive 4.00% APY by meeting a few simple requirements: Have at least one direct deposit, ACH payment, or bill pay transaction posted to the account during each billing cycle and make at least 15 debit card purchases of $5 or more. Even better, the bank will reimburse up to $15 in ATM fees per month from making withdrawals outside their ATM network.

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on TAB Bank’s secure website

Member FDIC

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here