Student Loan Repayment Plans Explained
Compare different student loan repayment options to find the best plan for your financial situation.
Understanding Student Loan Repayment Options
Choosing the right repayment plan for your student loans can save you thousands of dollars over the life of your loan and make monthly payments more manageable. Whether you have federal student loans, private loans, or both, understanding your options is essential for creating an effective repayment strategy.
Use our comprehensive guide to compare repayment plans, understand income-driven options, and find the best approach for your unique financial situation.
Federal Student Loan Repayment Plans
Standard Repayment Plan
The default repayment plan for federal student loans with fixed monthly payments designed to pay off your loan within 10 years.
Best For:
Borrowers who can afford higher monthly payments and want to pay off loans quickly while minimizing interest costs.
Key Features:
- Fixed monthly payments
- 10-year repayment term
- Lowest total interest paid
- Higher monthly payments
Graduated Repayment Plan
Starts with lower payments that increase every two years, designed to pay off your loan within 10 years.
Best For:
Borrowers who expect their income to increase steadily over time and need lower payments initially.
Key Features:
- Payments start low and increase every two years
- 10-year repayment term
- Higher total interest than standard plan
- Final payment up to 150% of initial payment
Extended Repayment Plan
Allows for lower monthly payments spread over an extended period of up to 25 years.
Best For:
Borrowers with larger loan balances who need lower monthly payments and can accept paying more interest over time.
Key Features:
- Lower monthly payments than standard plan
- Up to 25-year repayment term
- Available with fixed or graduated payments
- Significantly higher total interest paid over loan term
Income-Driven Repayment Plans
Income-driven repayment plans set your monthly payment based on your income and family size, making them a good option for borrowers with high debt relative to their income.
Income-Based Repayment (IBR)
Sets monthly payments at 10% or 15% of discretionary income, depending on when you took out your loans.
- Monthly payment: 10-15% of discretionary income
- Repayment term: 20-25 years
- Remaining balance forgiven after term (may be taxable)
- Must demonstrate partial financial hardship to qualify
Use Our Income-Based Repayment Calculator
Our student loan repayment calculator can help you estimate payments under different income-driven plans based on your specific situation.
Calculate IBR PaymentsPrivate Student Loan Repayment Options
Private student loans typically offer fewer repayment plan options than federal loans, but there are still strategies to manage these loans effectively.
Standard Fixed Repayment
Most private lenders offer a fixed monthly payment plan with terms ranging from 5-20 years.
Pros: Predictable payments, shorter terms available than federal loans
Cons: Less flexibility if financial circumstances change
Interest-Only Payments
Some private lenders allow for interest-only payments for a specified period, typically during school or for a short time after graduation.
Pros: Lower initial payments
Cons: Doesn't reduce principal balance, extends time to payoff
Refinancing Private Student Loans
Refinancing can be a powerful strategy for private loan borrowers to potentially lower interest rates and monthly payments.
Benefits of Refinancing:
- Potentially lower interest rate
- Combine multiple loans into one
- Choice of new repayment term
- Possible release of cosigner
Requirements:
- Good credit score (usually 650+)
- Stable income
- Solid employment history
- Low debt-to-income ratio
Student Loan Forgiveness Programs
Several federal programs offer student loan forgiveness for borrowers who meet specific requirements. These programs can significantly reduce your student loan burden.
Public Service Loan Forgiveness (PSLF)
PSLF forgives the remaining balance on Direct Loans after making 120 qualifying monthly payments while working full-time for a qualifying employer.
Qualifying Employers:
- Government organizations (federal, state, local)
- 501(c)(3) non-profit organizations
- Other non-profits that provide qualifying public services
Requirements:
- Make 120 qualifying monthly payments
- Work full-time for a qualifying employer
- Have Direct Loans (or consolidate into Direct Loans)
- Be on an income-driven repayment plan
Teacher Loan Forgiveness
Teachers who work in low-income schools or educational service agencies for five consecutive years may be eligible for forgiveness of up to $17,500 on certain federal student loans.
Eligible Loans: Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans
Forgiveness Amount: Up to $17,500 for science, math, and special education teachers; up to $5,000 for other qualifying teachers
Income-Driven Repayment Forgiveness
All income-driven repayment plans include loan forgiveness of any remaining balance after the repayment period (20-25 years).
- PAYE & REPAYE: 20 years for undergraduate loans, 25 years for graduate loans
- IBR: 20 or 25 years, depending on when you received your first loans
- ICR: 25 years
Calculate Your Path to Loan Forgiveness
Use our income-driven repayment calculator to estimate your monthly payments and potential forgiveness amount.
Try Our IDR CalculatorCalculate Your Student Loan Repayment Options
Use our student loan repayment calculators to compare different plans and find the best strategy for your specific situation.
Try Our Repayment Calculator