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Repayment Options with Your Lender/Servicer

Find a Repayment Plan That Fits Your Budget

It's important to know you may have repayment options. Learn about the alternatives and find a repayment plan that fits your budget. If your loan is in default, find out about available repayment options.

There Are Several Different Types of Repayment Plans

Standard repayment is generally a 10-year term and 120 payments. If you need smaller monthly payments, Graduated or Extended repayment may work for you.

See which repayment plan works for you:

  • Standard: higher monthly payments, lower overall costs
  • Graduated: gradually increasing payments over time, somewhat higher overall costs
  • Extended: lower monthly payments over a longer time period, higher overall costs

Make it a habit to review your repayment plan every year to make sure it's still a good fit for your financial situation.

Contact your servicer(s) to discuss your options. If you don't know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

Repayment Plan Comparison Calculator
Follow the link below to the U.S. Department of Education's repayment plan comparison calculator and find the payment plan that fits your financial situation.

Repayment Estimator

Standard Repayment
Standard repayment allows you to pay your loan(s) over 10 years in equal monthly installments. Because you begin paying down the principal immediately, Standard repayment may cost you less over the life of the loan compared to other plans.

Key features of Standard repayment:

  • The same payments each month
  • Minimum $50 payment amount until the loan is paid in full
  • Maximum 10-year term for Stafford and PLUS loans, with a three-year extension if a loan balance remains because of a variable interest rate
  • Unless a different repayment plan is selected, you will automatically be placed in a Standard repayment plan

Graduated Repayment
Graduated repayment is designed for those who have a low salary early in their repayment period, but anticipate higher incomes in the future. Payments start low and gradually increase over time.

Graduated repayment is a compromise between Standard repayment and the higher lifetime costs of Extended repayment.

Key features of Graduated repayment:

  • Lower monthly payments that increase over time
  • No payment is more than three times the lowest payment
  • Payments must cover interest
  • Maximum 10-year term for Stafford and PLUS loans, with a three-year extension if a loan balance remains because of a variable interest rate

Extended Repayment
Borrowers with more than $30,000 in FFELP or Direct Loan Program loans—separately, not combined—can lower their monthly payments by extending their payments for up to 25 years. While it does save money in the short term, Extended repayment may create higher overall costs.

Key features of Extended repayment:

  • Designed for borrowers with more than $30,000 in student loan debt in a single loan program (i.e., FFEL or Direct loan)
  • Lowers monthly payments by extending the loan term up to 25 years
  • Fixed or graduated payments
  • May result in higher costs due to the longer repayment term

  • Income-Driven Repayment Plans

    Income-driven plans can be a good choice if your income is small relative to your student loan debt.

    Repayment Plan Who Qualifies
    Income-Based Repayment (IBR) for new borrowers as of 7/1/14 FFEL and Direct loan borrowers
    Income-Based Repayment (IBR) for those who borrowed prior to 7/1/14 FFEL and Direct loan borrowers
    Pay As You Earn (PAYE) Direct loan borrowers only
    Income-Contingent Repayment (ICR) Direct loan borrowers only

    To determine your eligibility and to sign up for a new federal student loan repayment plan, contact your servicer(s). If you don't know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

    Income-Based Repayment (IBR)
    IBR is a repayment option based on income and family size. For most, your maximum monthly IBR payment will be less than 10% of your income. IBR will also forgive any remaining debt after 25 years of qualifying payments, although the Internal Revenue Service may treat any forgiven loan amount as taxable income. Consult a tax professional.

    Key features of IBR:

    • IBR is available to Direct Loan Program and FFELP borrowers
    • You must apply for IBR each year you participate
    • You must demonstrate partial financial hardship
    • Monthly IBR payments are based on income, family size and the poverty guidelines for your state
    • There is no minimum payment amount
    • Payments do not have to cover interest
    • The government may pay accruing interest for your first three years of IBR
    • Loans may be forgiven for Direct Loan Program borrowers after 10 years for those who work in public service or other qualifying careers
    • Loans may be forgiven after 25 years for all borrowers

    To see if you qualify for IBR, contact your servicer(s) or follow the link below to the U.S. Department of Education's Repayment Estimator.

    Repayment Estimator

    Income-Sensitive Repayment (ISR)
    This program may be a good option if you have a Stafford, PLUS or Grad PLUS loan(s) under the FFELP and want to lower your payments for a relatively brief period of time. With an ISR plan, your servicer(s) determines your monthly payment based on your Adjusted Gross Income and will readjust your payments annually based on your reported earnings.

    Key features of ISR:

    • Your monthly loan payment is based on your annual income
    • As your income increases or decreases, so do your payments
    • The maximum repayment period is 10 years
    • You must reapply for ISR each year
    • Ask your servicer(s) for more information on the ISR plan
    • ISR is available for FFELP Stafford loan, PLUS and Grad PLUS loan borrowers

    ISR can help you stay current with your payments if you're facing an income shortfall, but if you think you'll need lower payments for more than a year, you may want to consider Extended or Graduated repayment.

    Income-Contingent Repayment (ICR)
    With ICR, monthly payments are calculated based on your income, family size and the total amount borrowed.

    If you complete 25 years of repayment under the ICR plan, any remaining debt will be forgiven, although the Internal Revenue Service may treat any forgiven loan amount as taxable income. Consult a tax professional.

    Key features of ICR:

    • ICR is available for Direct Loan Program borrowers of Stafford loans and Grad PLUS loans
    • Payments are based on income, family size and total federal student loan debt
    • The payment amount adjusts annually based on your Adjusted Gross Income
    • Payments do not have to cover interest, but unpaid interest does accrue
    • Accrued interest caps at 10% of the original loan amount
    • The federal government subsidizes interest beyond the 10% cap
    • If you pay the loan early or switch plans, all accrued interest—including federally subsidized interest—is added to the principal
    • The maximum loan term is 25 years
    • After 25 years the remaining debt is forgiven
    • Forgiven debt

    Pay As You Earn (PAYE) Plan
    With PAYE, monthly payments are calculated based on your Adjusted Gross Income and family size. The monthly payment amount is recalculated annually to reflect changes in your income and family size, and is generally 10% of your discretionary income. Any remaining balance is forgiven after 20 years of payments, or after 10 years under the Public Service Loan Forgiveness Program.

    Key features of PAYE:

    • PAYE is available for Direct Loan Program borrowers (subsidized, unsubsidized, graduate and consolidated)
    • Your monthly loan payment is based on your annual income and family size
    • Your payment amount may increase or decrease if your income or family size changes from year to year
    • You must reapply for PAYE each year
    • After 20 years, the remaining debt is forgiven

  • Loan Consolidation

    The Direct Consolidation Loan Program lets you combine one or more federal student loans into a single new loan. So instead of making several different student loan payments, you make one monthly payment for all your federal student loans. Consolidation may lower your monthly payments and extend your repayment term.

    If you have FFELP loans you may be able to consolidate in the Direct Consolidation Loan Program. Contact your servicer(s). If you don't know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

    For more information, contact the U.S. Department of Education at http://www.studentaid.gov/.

    Loans That Qualify for Consolidation
    Almost all federal student loans qualify for consolidation. Some of the more common loans include:

    • Stafford loans, both subsidized and unsubsidized
    • PLUS loans
    • Consolidation loans
    • Perkins loans
    • Federal Nursing Loans
    • Health Education Assistance Loan (HEAL)
    • Supplemental Loans for Students (SLS)

    How Long You Have to Pay Back Your Consolidated Loan
    How long you have to pay back your consolidated loan depends on the amount of the loan and the repayment plan. Contact your servicer.

    Grace Periods and Consolidated Loans
    Consolidation loans do not have six- or nine-month grace periods the way some other loans do—you must begin repayment on a consolidation loan within 60 days of disbursement, regardless of whether the grace periods on the individual loan(s) has ended.

    One question to consider is when to consolidate—before or after the grace periods on your individual loan(s) ends. Waiting to consolidate until after that six-month to nine-month grace period allows you to delay repayment.

    However, if you consolidate sooner you may be able to lock into a lower, fixed interest rate on your consolidation loan before the variable interest rates on your individual loan(s) start to rise. In that case, consolidating early could help you save money in the long run. Talk to your servicer.

    Repayment Options for Consolidated Loans
    Consolidated loans feature the same repayment options as other federal loans, ranging between Standard repayment, Extended repayment, Graduated repayment, Income-Sensitive Repayment, Income-Contingent Repayment, or Income-Based Repayment plans. The repayment period will last 10 to 30 years depending on your student loan debt and the plan you've chosen.

    For more information, visit our Loan consolidation section.

    Disadvantages to Consolidating Your Loan(s)
    Consolidation can be a good repayment option, but it's not for everyone. Your new consolidation loan may have a longer repayment period than remained on your individual loan(s).

    Consolidation presents unique disadvantages for Perkins loan borrowers because it replaces the longer grace periods and cancellation benefits of Perkins loans with the standard federal loan terms.

    Here are some disadvantages to consolidating your loans:

    • Your repayment period could stretch up to 30 years, which means more interest would accrue over the life of the loan
    • The overall cost of repaying your consolidation loans could be the same as, if not higher than, the cost of repaying your unconsolidated loans
    • Once you consolidate your loans into one, the individual loans cease to exist, so you cannot revoke the consolidation for any reason

    Talk to your servicer(s). They can help you consider the pros and cons of consolidating your loans.

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