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Student Loan Repayment Options

Find the Best Student Loan Repayment Plan for You

A college degree isn't free for most people, and if you borrowed money through student loans, you are responsible for paying it back. Repayment programs determine how much your monthly student loan payment amount and how many years it will take to pay back what you owe.

Before deciding which repayment program is best for you, you have to know which types of student loans you have, as it can affect your repayment options. While federal student loans have multiple repayment options from which you can choose, private loans are made by lenders with no government involvement and offer less flexibility and options when it comes to repayment. Read about each repayment plan carefully before selecting the one that best fits you.

Standard Repayment Plan

  • Eligible Loans include: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all PLUS loans, and all Consolidation Loans (Direct or FFEL).
  • All student loan borrowers are eligible for this plan.
  • Term length is 10 years.
  • You will typically pay less over time and save the most money in comparison to other loan repayment plans.
  • This plan is not ideal for those seeking Public Service Loan Forgiveness (PSLF).

Graduated Repayment Plan

  • Eligible loans include: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all PLUS loans, and all Consolidation Loans (Direct or FFEL).
  • All borrowers are eligible for this plan.
  • Term length is 10 years.
  • You have more time to repay your loans than under the 10-year Standard Plan.
  • Your monthly payments will start low and increase every two years.
  • Not a qualifying repayment program for Public Service Loan Forgiveness (PSLF).

Extended Repayment Plan

  • Eligible loans include Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all PLUS loans, and all Consolidation Loans (Direct or FFEL).
  • Term length is 25 years.
  • Direct Loan borrowers must have more than $30,000 in outstanding Direct Loans to qualify.
  • FFEL borrowers must have more than $30,000 in outstanding FFEL Program loans to qualify.
  • You will have lower monthly payments under this plan but pay more in interest.
  • Not a qualifying repayment program for Public Service Loan Forgiveness (PSLF).

Income-Based Repayment Plan (IBR)

  • Eligible loans include: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, all PLUS loans made to students, and Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents.
  • Qualification is based on your income and amount of outstanding student loan debt.
  • Term length is 20 or 25 years and any outstanding balance on your loan will be forgiven if you have not repaid your loan in full after that time.
  • Your monthly payments will be either 10 or 15 percent of discretionary income.
  • You may have to pay income tax on any amount that is forgiven.
  • This plan is a good option for individuals seeking Public Service Loan Forgiveness (PSLF).

Income-Contingent Repayment Plan (ICR)

  • Eligible loans include: Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans made to students, and Direct Consolidation Loans.
  • Term length is 25 years and any outstanding balance will be forgiven if you haven't repaid your loan in full after that time. You may have to pay income tax on any amount that is forgiven.
  • You will pay more over time than under a 10-year Standard Plan.
  • Your monthly payment will be the lesser of either 20 percent of discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.
  • Payments are recalculated every year and are based on your updated income, family size, and the total amount of your Direct Loans.
  • This plan is a good option for individuals seeking Public Service Loan Forgiveness (PSLF).

Pay As You Earn Repayment Plan (PAYE)

  • Eligible loans include: Direct Subsidized and Unsubsidized Loans, Direct PLUS loans made to students and Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents.
  • You must have a high debt relative to your income.
  • Term length is 20 or 25 years and any outstanding balance on your loan will be forgiven if the student loan is not repaid in full after that time.
  • Your monthly payments will be either 10 or 15 percent of discretionary income.
  • Payments are recalculated each year and are based on your updated income and family size.
  • Your monthly payment will never be more than the 10-year Standard Plan amount.
  • You may have to pay income tax on any amount that is forgiven.
  • Good repayment option for individuals seeking Public Service Loan Forgiveness (PSLF).

Revised Pay As You Earn Repayment Plan (REPAYE)

  • Eligible loans include: Direct Subsidized and Unsubsidized Loans, Direct PLUS loans made to students, and Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents.
  • Any Direct Loan borrower with an eligible loan may select this plan.
  • You will typically pay more over time than under the 10-year Standard Plan.
  • Term length is 20 or 25 years and any outstanding balance on your loan will be forgiven if the student loan is not repaid in full after that time.
  • Monthly payments will be 10 percent of discretionary income.
  • Your payments are recalculated each year and based on your updated income and family size.
  • You may have to pay income tax on any amount that is forgiven.
  • Good repayment option for individuals seeking Public Service Loan Forgiveness (PSLF).

Repaying Federal Perkins Loans

Federal Perkins Loans are low-interest (5%) federal student loans for undergraduate and graduate students who demonstrate extreme financial need. If you are attending school at least half-time, you have nine months after you graduate, leave school, or drop below half-time status before you must repay your Federal Perkins Loans. If you are attending college less than half-time, you can check with your college or career school to determine the length of your grace period. Since Perkins Loan repayment plan options are not that same as those for Direct Loan Program or FFEL Program loans, you will want to check with your institution on Perkins Loan repayment plans.

Student Loan Forgiveness, Cancellation and Discharge

In some instances, you may qualify to have your student loans forgiven, canceled or discharged. This means that you no longer have to repay your federal student loans. For example, some or part of your student loan could be forgiven if you end up teaching or working in public service. You may also qualify for student loan debt relief if your institution closes or you become totally and permanently disabled. Find out what circumstances qualify your loans for forgiveness, cancellation, or discharge.

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Last Reviewed: October 2018