Student loan repayment options
Six repayment plans are available:
- Standard
- Extended
- Graduated
- Income Based Repayment
- Income Contingent (Direct Loan Program Only)
- Income-Sensitive (FFEL Program Only)
Standard repayment
With the Standard Plan, you’ll pay a fixed amount each month until your loans are paid in full. You'll have up to 10 years to repay your loans. This plan is good if you can handle higher monthly payments because you'll repay your loans more quickly. Your monthly payment under the Standard Plan may be higher than it would be under the other plans, but you generally pay the least interest in the end.
Extended repayment
Under the Extended Plan, you'll still have minimum monthly payments, but you may take up to 25 years to repay your loans. The length of your repayment period will depend on the total amount you owe when your loans go into repayment, but you must have a minimum borrowed amount of $30,000 to qualify for this program. Remember that the longer your loans are in repayment, the more interest you will pay.
Graduated repayment
With this plan, your payments start out low, then increase, generally every two years. The length of your repayment period will depend on the total amount you owe when your loans go into repayment. If you expect your income to increase steadily over time, this plan may be right for you.
Income Based Repayment (IBR)
Income Based Repayment is a new repayment plan under which required monthly payment is capped at an amount that is intended to be affordable based on income and family size. You are eligible for IBR if the monthly repayment amount under this plan will be less than your monthly payment calculated under the standard repayment plan. Under IBR, if you repay with this plan for 25 years and meet other requirements you will have any remaining balance of your loan(s) cancelled. There are also additional loan cancelation options if you work in public service with reduced loan payments under this plan. More information can be found here.
Income Contingent Repayment (ICR)
This plan is for Direct Loan borrowers only. Each year, your monthly payments will be calculated on the basis of your Adjusted Gross Income (AGI), family size, and the total amount of your Direct Loans. To participate in the ICR Plan, you must sign a form that permits the Internal Revenue Service to provide information about your income to the U.S. Department of Education. This information will be used to recalculate your monthly payment, adjusted annually based on the updated information.
Income-Sensitive Repayment
This option is similar to Income Contingent Repayment, but is for the FFEL Program. Payments are based on a percentage of your monthly income.