Standard Repayment Plan

Summary: You'll pay less interest for your loan over time under this plan than you would under other plans. All borrowers are eligible for this plan.

Types of Loans

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans
  • all Consolidation Loans (Direct or FFEL)

Monthly Payments– Fixed amount of at least $50 per month.

Time Frame– Payments are made for up to 10 years (not including periods of deferment or forbearance), and can reach up to 30 years for Consolidation Loans.

This repayment plan saves you money over time because your monthly payments may be higher than payments made under other plans, but you'll pay off your federal student loan in the shortest time. For this reason, you'll pay the least amount of interest over the life of your federal student loan.

Under the Standard Repayment Plan, consolidation loans have repayment periods of 10 to 30 years based on your total education loan indebtedness. For example, if your total education loan indebtedness exceeds $60,000, your repayment period will be 30 years (360 months).


Graduated Repayment Plan

Summary: You'll pay more for your loan over time than under the 10-year standard plan. All borrowers are eligible for this plan.

Types of Loans

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans
  • all Consolidation Loans (Direct or FFEL)

Monthly Payments– Lower at first and then increase, usually every two years. These payments will at least equal the amount of interest that accrues on your loan each month, but won't be more than three times greater than any other payment.

Time Frame– Up to 10 years (up to 30 years for Consolidation Loans).

Under the Graduated Repayment Plan, consolidation loans have repayment periods of 10 to 30 years based on your total education loan indebtedness. For example, if your total education loan indebtedness exceeds $60,000, your repayment period will be 30 years (360 months).


Extended Repayment Plan

Summary: You’ll pay more over time, but your monthly payments would be lower than the 10 year Standard Plan. 

Types of Loans

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans
  • all Consolidation Loans (Direct or FFEL)

Monthly Payments– Payments may be fixed or graduated.

Time Frame– Up to 25 years.

Direct Loan Borrowers must have more than $30,000 in outstanding Direct Loans.
FFEL Borrowers must have more than $30,000 in outstanding FFEL Program loans.

For example, if you have $35,000 in outstanding FFEL Loans and $10,000 in outstanding Direct Loans, you can choose the Extended Repayment Plan for your FFEL Loans, but not for your Direct Loans.

The Extended Repayment Plan option can extend the repayment period further than is provided for under the Standard and Graduated Repayment Plans for consolidation loans that are based on total education indebtedness that is over $30,000 but not exceeding $40,000.


Income-Based Repayment (IBR) Plan

Summary: You must have a partial financial hardship. Your monthly payments will be lower than payments under the 10 year Standard Plan. You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven.

Types of Loans

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans made to students
  • Consolidation Loans  (Direct or FFEL) that do not includeDirect or FFEL PLUS loans made to parents

Monthly Payments– Your maximum monthly payments will be 15 percent of discretionary income. Your payments change as your income changes.

Time Frame– Up to 25 years.

IBR is a repayment plan with monthly payments that are limited to 15% (10% if you're a new borrower) of your discretionary income. Discretionary income for this plan is the difference between your adjusted gross income and 150% of the poverty guideline amount for your state of residence and family size, divided by 12. To initially qualify for IBR and to continue making income-based payments under this plan, you must have a partial financial hardship.

Partial Financial Hardship

A circumstance in which the annual amount due on all of your eligible loans or, if you're married and file a joint federal income tax return, the annual amount due on all of your eligible loans and your spouse's eligible loans, exceeds 10% (for the Pay As You Earn and Revised Pay As You Earn plans and for new borrowers under the IBR plan) or 15% of the amount by which your adjusted gross income (AGI) exceeds 150% of the annual poverty guideline amount for your family size and state of residence.

You're a new borrower for the IBR Plan if:

  • you have no outstanding balance on a Direct Loan or FFEL Program loan as of July 1, 2014 or
  • have no outstanding balance on a Direct Loan or FFEL Program loan when you obtain a new loan on or after July 1, 2014.

Income-Contingent Repayment (ICR) Plan

Summary: You'll pay more for your loan over time than under the 10-year standard plan. If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven. You may have to pay income tax on the amount that is forgiven.

Types of Loans

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS Loans made to students
  • Direct Consolidation Loans

Monthly Payments– ICR is a repayment plan with monthly payments that are are the lesser of:
(1) what you would pay on a 12-year standard repayment plan multiplied by an income percentage factor or
(2) 20% of your discretionary income divided by 12.

Time Frame– Up to 25 years.

If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven. You may have to pay income tax on the amount that is forgiven.

Discretionary income for this plan is the difference between your adjusted gross income and the poverty guideline amount for your state of residence and family size.


Pay As You Earn (PAYE) Plan

Summary: You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You must have a partial financial hardship & your monthly payments will be lower than payments under the 10-year standard plan. 

You'll pay more for your loan over time than you would under the 10-year standard plan. If you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven. You may have to pay income tax on any amount that is forgiven.

Types of Loans

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS loans made to students
  • Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents

Monthly Payments– Your maximum monthly payments will be 10 percent of discretionary income. Your payments change as your income changes.

Time Frame– Up to 20 years

The Pay As You Earn Repayment Plan is a repayment plan with monthly payments that are limited to 10% of your discretionary income (the difference between your adjusted gross income and 150% of the poverty guideline amount for your state of residence and family size, divided by 12). To initially qualify for the Pay As You Earn Repayment Plan and to continue to make income-based payments under this plan, you must have a partial financial hardship (and be a new borrower).