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:: Repayment Options ::

Once you begin repaying your federal student loans, the monthly payment amount is based on how much you borrowed and the repayment option you choose. You can use our Loan Calculator to get your customized monthly payment estimate. More information is available by contacting your loan holder.

• Repayment Options
  • Income-Based Repayment (IBR)
• Federal Consolidation Loans

Repayment options

There are several repayment options for you to consider. If you're interested in any of these options, contact your loan holder for more information.

Standard Repayment

• This plan is the most financially effective way to repay your student loan while minimizing interest costs.
• Payments are due monthly (excluding periods of deferment or forbearance), even if you don't receive any notifications or statements.
• This schedule has a 10-year repayment term.

Graduated Repayment

• This plan is ideal if you have limited income now, but expect to earn more in the future. However, total interest costs are typically higher over the life of the loan.
• Monthly payments begin low, then increase gradually over time.
• Payments must cover accruing interest.
• This schedule has a 10-year repayment term.

Extended Repayment

• This plan is only available to borrowers who have loans totaling more than $30,000.
• You can choose either the standard or graduated repayment option (both are described above).
• The repayment term can be up to 25 years.

Income-Sensitive Repayment

• This plan is only available for FFELP loans.
• This plan is appropriate if your income fluctuates, you have substantial loan balances or you need smaller monthly payments to meet other financial obligations. However, total interest costs are typically higher over the life of the loan.
• Monthly payments are adjusted based on gross monthly income.
• Payments must cover accruing interest.
• This plan must be renewed each year.

Income-Contingent Repayment

• This plan is only available for Direct loans from the U.S. Department of Education.
• Monthly payments are adjusted based on annual income, family size and the total amount of loan(s) and may change as income changes.
• Any outstanding loan balance after 25 years of repayment is forgiven. The amount forgiven may be taxable as income.

Income-Based Repayment

The Income-Based Repayment (IBR) plan is designed to make loan repayment easier for borrowers with lower salaries. The plan:

• Caps the monthly payments at a percentage of a borrower's discretionary income and factors in family size and total amount borrowed
• Adjusts the monthly payment amount each year based on changes in income and family size.
• Sets a maximum repayment period of 25 years. After 25 years, any remaining debt is forgiven.

More information and the necessary forms are available on our Income-Based Repayment plan page. You can also access the Federal Student Aid IBR page (external link)  to learn more and use their calculator to estimate your payments.

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Federal Consolidation Loans

Consolidation allows you to combine all your federal education loans into a single, more manageable loan, make one monthly payment to a single loan holder and extend your repayment period to a maximum of up to 30 years depending on the consolidated loan amount.

To be eligible for a Federal Consolidation loan, you must certify you don't have another application for a consolidation loan pending with another lender and either:

• Be enrolled in school less than half time or no longer enrolled.
• Be in your grace period.
• Be in repayment.

If you choose to consolidate your loans, you’ll still have the option to choose from the standard, graduated, income-sensitive, income-based or extended (if applicable) repayment schedules.

Loan consolidation isn't the best option for everyone. If you consolidate while still in school, you’ll forfeit your 6-month grace period, and your first loan payment will be due within 45 days after you:

• Graduate.
• Decrease your hours to less-than-half-time status.
• Withdraw from school.

Learn more about loan consolidation on the U.S. Department of Education website (external link)  or by calling 800.557.7392 (toll-free).

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