Which Student Loan Repayment Plan Should You Choose?

If you graduated from college within the last six months, you have probably been contacted by one of the U.S. Department of Education’s loan servicers, reminding you that it’s almost time to begin repaying your student loans.

Your loan servicer will automatically enroll you in our Standard Repayment Plan unless you tell them otherwise. Under a Standard Plan, your payments will be fixed over a 10-year period of time.

But, this isn’t your only option. Did you know that the Department offers several different repayment plans? You can read more about that below or you can  try our repayment estimator to find out which repayment plan is best for you. Just log in, and the tool will pull your federal student loan information and allow you to compare our different repayment plans side by side:

Here are the details on each repayment plan we offer:

Repayment Estimator Graphic

Standard Repayment Plan

The most basic type of repayment plan is the Standard Repayment Plan. This is the default plan for most types of student loans. It breaks down your loan balance into monthly payments of at least $50 for up to ten years. In general, this is the plan that will cost you the least amount of money in interest payments.

Graduated Repayment Plan

Under the Graduated Repayment Plan, monthly payments start out low and increase every two years during the 10-year repayment period. This plan is best for borrowers whose income may start out low but is expected to increase. One downside is you will pay more in interest than you would under the Standard Repayment Plan.

Extended Repayment Plan

The Extended Repayment Plan allows borrowers with more than $30,000 in debt to extend the repayment period from ten years to up to twenty-five years. Payments under the Extended Repayment Plan can be either standard or graduated. This plan is best for borrowers whose loan burden is too large to bear the standard monthly payments over the course of just ten years.

Income-Based Repayment Plan

The Income-Based Repayment (IBR) Plan allows borrowers with a demonstrated financial hardship to limit their monthly loan payments to 15 percent of their discretionary income (that is, the difference between their adjusted gross income and 150 percent of the poverty guideline for their individual situation). Under this plan, if the balance of the loan has not yet been paid off after 25 years of payments, it can be forgiven. Under IBR, borrowers will pay more in interest over the life of the loan. This plan is best for borrowers who are struggling to afford their monthly payments under other repayment plans.

Pay As You Earn

The Pay As You Earn Repayment Plan allows new borrowers with a demonstrated financial hardship to limit their monthly loan payments to 10 percent of their discretionary income. Under this plan, if the balance of the loan has not yet been paid off after 20 years of payments, it can be forgiven. However, borrowers will pay more in interest over the life of the loan than under the Standard Repayment Plan. 

Income-Contingent Repayment Plan

Under the Income-Contingent Repayment Plan, a borrower’s monthly payment amount is calculated based on annual income and family size as well as his total loan amount. If a loan balance remains after 25 years of payments, it may be forgiven. Unlike the IBR and Pay As You Earn Repayment Plans, borrowers need not be facing financial hardship to qualify for this plan. However, a borrower will likely pay more in interest than in other repayment plans. This plan is best for borrowers who are not facing demonstrated financial hardship, but whose financial situation is insufficient to bear the monthly payments under other repayment plans.

Remember that these are for federal loans only. If at any point, you need advice or have questions about your federal student loans, don’t hesitate to contact your loan servicer. If you have private loans as well, be sure to check with your lender to see what repayment options they have available.

For more information on student loans and federal financial aid, visit StudentAid.gov.


  1. My Loans are in default and my taxes have been held. I would like to set up some sort of monthly payment. I do not make alot of money and have children to support but would love to even start making small amounts so they will stop taking my taxes. The money i get back goes to help with my childrens needs throughout the year. Can someone please email me and help me with this? I work the hours that i can call and in my job i do not have the availablity to call during work. Thank you.

  2. Student loan is very beneficial for middle class family when their son or daughter eligible for overseas education or any higher education. In this cases almost people face problem in repaying loan, some times students get good opportunity so they pays loan as soon as quick and people who not able to pay loan, they find ways to how to paid off their loan and here this post is very helpful to students who facing loan repay problems.


  3. If you have direct or guaranteed federal consolidation loans your Standard Repayment Plan will be 10, 12, 15, 20, 25, or 30 years, based on the amount of debt you consolidated. However, you can still switch to IBR, Graduated Repayment, or one of the other repayment plans. You can also switch to 10-year Standard Repayment if you are comfortable with the larger monthly payments.

    Stafford or PLUS borrowers who want access to the Standard or Graduated Repayment Plans of 12, 15, 20, or 30 years would need to complete a Direct Loan Consolidation first.

  4. Are there any sanctions on schools with a high percentage of students in the income based plan? Are these loans considered to be “performing”?

  5. Are Department of Education relevant? You’re not answering any question. American people are ripped-off, and Dept of Education isn’t helping out. People who’re not in school are better-off, yet we’re asked to go back to school for retraining.

    What do you do, Dept of Education?

    Can I have a loan servicer from Canada or Mexico.

    Sallie Mae is denying it’s Promissory Note and the Loan Consolidation they issued in the past. They have refused to publish the names of their collection agents. We have about six of them calling including U.S. Funds.

    People are ripped-off.

    Nowhere to hide!

  6. I have been contacted by National Recoveries, Inc. to collect my loan (in default).
    Are they legitimate? Where can I find out if they are really authorized to give me the deal they are proposing?


  7. Dear,

    A last week I received some letters from Aspire Resources INC . They require me to stop making checks payable to U.S Department of Education. Instead, I make check payable to Aspire Resources INC . I’m really confusing. Please let me know if someone know about this .

  8. Hello,

    I just called about the Pay as you Earn provision, but was told that the Department of Education is not putting it in place. I am confused as to how something exists as legislation but is not implemented.

    Thanks for your time.

  9. I was wondering where I would be able to speak with someone from the ED’s Office of Federal Student Aid in my area (Buffalo, NY) or receive a phone number that would allow me to speak with ED’s Office of Federal Student Aid.

  10. My loans are in default with American Student Assistance (CTI). My wages are being garnished. I wanted to make voluntarily payments to set up a payment plan, but they are asking for a downpayment to get setup. I can not afford making a downpayment if my wages are being garnished. Is there any way I can change the company that holds my loan? I really want to make voluntary payments.

    • Hi Ms. Osorio,

      I am writing to you from American Student Assistance. Thanks for submitting your question. I am sorry that things haven’t been clear up until now. Student loans are definitely confusing! Kudos to you for wanting to make payments! This is the best option on a student loan. When someone is defaulted on a student loan we do ask if they wish to pay the loan in full or make a down payment toward the loan, but neither is required. If you are currently having your wages garnished please ask about setting up a voluntary payment plan.

      Please feel free to give us a call at 1-800-999-9080 ex.5016 with any questions and check out our website for more information on default at http://www.asa.org/in-default/default.aspx We are here to help.

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