Hi Heather,

I am curious how a federal student loan is amortized? Is it the same as a private loan, with higher interest payments to start and slowly transitioning more towards principal as time goes on?

If that is the case, what time period is a direct federal loan amortized at if the repayment plan is PAYE or some other income-based repayment plan.  I am asking specifically in the case of negative amortization, because I want to be able to project the amount for my clients. Obviously there would be a big difference if the term was 10 years versus 20 years - that’s why I want to know.

Please help!!! Thanks!!!!