Answer:
Income-driven repayment plan.
Explanation:
Federal student loans can be defined as a form of financial aid given to college or university students with varying financial means, so as to enable them gain access to higher education.
In the United States of America, the U.S Department of Education is saddled with the responsibility of administering the federal student loans.
Basically, there are four (4) types of federal student loans and these include;
1. Direct unsubsidized loans.
2. Direct subsidized loans.
3. Direct consolidation loans.
4. Direct PLUS loans.
Once a federal student loan has been selected, students are required to choose a repayment plan for the loan taken. There are four (4) main types of repayment plan and these are;
a. Standard repayment plan.
b. Extended repayment plan.
c. Graduated repayment plan.
d. Income-driven repayment plan.
An income-driven repayment plan can be defined as a federal student loan repayment plan that is designed to regulate or adjust the amount of money to be paid in each month based on one's current earnings and family size. This payment plan is designed typically for college graduates and as such it's intended to be affordable based on the discretionary income of the borrower and family size.
In this scenario, Alejandro wishes to pay off his student loan based on how much he earns at his job after graduation. Thus, the type of repayment plan which is best for him is an income-driven or income-based repayment plan.
