Repaying student loans

With the Standard Repayment Plan, you’ll pay a fixed amount each month until your loans are paid in full. Your monthly payment will be at least $50 — possibly higher, depending on the amount of the loan — and you’ll be on track to repay your loans within 10 years.

Your monthly payment on the standard plan may be higher than it would be on other plans because your payment starts higher to remain consistent throughout the term.. For that reason, with a 10-year limit on repayment, you may pay less interest with this option.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.

Graduated plans can vary, but the idea is to start with a lower payment while income is lower and then increase every two years or so as income goes up.

The length of your repayment period will be up to 10 years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments. Your monthly payment will increase in time, but no single payment on this plan will be more than three times greater than the amount of your beginning payment.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.

The extended repayment period can go up to 25 years, and payments are either fixed or graduated. Keep in mind: The longer you take to repay, the more you’ll repay in total.

To qualify for this plan, you must have a minimum of $30,000 in Federal Family Education Loan (FFEL) Program and/or Direct Loans. If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFELP loans. If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.

This means, for example, that if you have $35,000 in outstanding FFELP loans and $10,000 in outstanding Direct Loans, you can choose the extended repayment plan for your FFELP loans but not for your Direct Loans. Your fixed monthly payment is lower than it would be on the standard plan, but you’ll ultimately pay more for your loan because of the additional interest that accumulates during the longer repayment period.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.

Federal student loans offer several repayment plans based on your income and family size. If your monthly payment is high in comparison to your income, you might consider one of these plans. Read through the high-level information about these plans, and then you can learn more at the Federal Student Aid page. To help you determine your eligibility for and estimated repayment amount under any of these plans, use this Repayment Estimator.

If you are also interested in the public service loan forgiveness program, you will need to choose one of these income-driven repayment plans: Revised Pay as you Earn, Pay as you Earn, Income-based Repayment, or Income-contingent Repayment.

An income-driven plan can make your monthly payment manageable, however, if you choose to lower your payment or extend the repayment term, you will likely pay more interest over time. Federal loans can be prepaid at any time, and that means you can make a higher monthly payment to reduce total interest paid.

Income-based Repayment Plan:

You may enter the Income-Based Repayment (IBR) Plan if your federal student loan debt is high relative to your income and family size. The loan servicer will perform the calculation to determine your eligibility, but you can use the U.S. Department of Education’s Repayment Estimator to determine whether you would likely qualify for the IBR plan.

The calculator takes into account income, family size and state of residence to calculate the IBR monthly payment. The payment is capped at 15 percent of annual discretionary income. If a borrower is married and files a joint federal tax return, and the spouse also has IBR-eligible loans, the spouse’s eligible loan debt is considered when determining IBR eligibility.

This program is available to FFELP and Direct Loan borrowers. Under this plan, if your monthly payment does not cover the amount of accrued interest, the government will pay the remaining interest accrued — for the first three years of repayment.

To remain in the IBR program, you must submit income documentation each year.

At the end of 25 years, any remaining balance is forgiven. For new borrowers on or after July 1, 2014, any remaining balance is forgiven after 20 years. There may be tax consequences when the debt is forgiven.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.

Income-contingent Repayment Plan:

The Income-Contingent Repayment Plan is available only for Direct Loans. Each year, your monthly payment is calculated based on your adjusted gross income, family size and Direct Loan debt.

On this plan, your monthly payment is the lesser of:

1. The amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income; or
2. 20 percent of your monthly discretionary income

If the monthly payment does not cover all accrued interest, the unpaid interest amount is capitalized — added to the principal balance — once per year. The capitalization will not exceed 10 percent of the original amount owed when the loan entered repayment.

Repayment can extend to 25 years, after which any remaining balance is discharged. Any discharged amount may have tax implications.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.

Pay As You Earn Repayment Plan (PAYE):

The Pay As You Earn repayment plan is only available for Direct Loans. However, FFELP loans are taken into consideration when determining the borrower’s eligibility for this plan.

Each year, the monthly payment is calculated based on adjusted gross income, family size and total federal student loan debt. Married borrowers who file a joint tax return will have the spouse’s income and federal loan debt taken into consideration when determining eligibility for this program. Qualifying for this plan will generally result in a lower monthly payment than other income-driven repayment plans.

On this plan, your monthly payment is the lesser of:

1. What you would repay under the Standard Repayment Plan; or
2. 10 percent of your discretionary income

If your monthly payment does not cover the amount of accrued interest on your subsidized loans, the government will pay the remaining interest accrued — for the first three years of repayment. To help you determine your repayment amount under this and other plans, use this Repayment Estimator.

To qualify for this plan, you must not have an outstanding balance on a Direct Loan or FFELP loan as of October 1, 2007, and must have borrowed a new Direct Loan on or after October 1, 2011. It is possible to consolidate FFELP student loans with Direct Loans to make them eligible for this plan.

Repayment can extend up to 20 years, and any remaining balance — after 20 years of on-time payments — is discharged. Any discharged amount may have tax implications.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.

Revised Pay as You Earn Plan (REPAYE):

The Revised Pay as You Earn (REPAYE) repayment plan is only available for Direct Loans. However, FFELP loans can be consolidated into the Direct Loan program to make them eligible for this plan.

Each year, the monthly payment is calculated based on adjusted gross income, family size and total federal student loan debt. Unlike the PAYE and IBR plans, there is no income requirement to use this plan. And, under this plan your calculated payment can exceed the standard monthly payment amount.

Married borrowers will have the spouse’s income and federal loan debt taken into consideration when determining eligibility for this program.

On this plan, your monthly payment is generally 10% of your discretionary income. If your monthly payment does not cover the amount of accrued interest on your subsidized loans, the government will pay the remaining interest accrued — for the first three years of repayment. The government will also pay half of the difference on your subsidized loans after the three-year period, and half the difference on your unsubsidized loans during all periods.

To help you determine your repayment amount under this and other plans, use this Repayment Estimator.

Repayment can extend up to 20 or 25 years, and any remaining balance — after 20 or 25 years of on-time payments — is discharged. Any discharged amount may have tax implications.

For more information on this repayment plan, please contact your servicer or visit https://studentaid.ed.gov/sa/repay-loans/understand/plans.