Loan Repayment

Repayment Plans

Borrowers of federal student loans are automatically enrolled into the Standard Repayment Plan after graduation. Borrowers can then decide to remain in the Standard Repayment Plan or choose a different plan. The Repayment Plans range from 10 to 25 years for repayment. Borrowers can find more detailed information about all of the Repayment Plans listed below on the federal studentaid.ed.gov website.

Repayment Plan Type Payment Type and Length Comments
Standard Fixed monthly payments ($50 minimum) for 10 years Borrowers will pay less interest under this plan.
Graduated Increasing monthly payments for 10 years Good for borrowers who have a limited income in first years after graduation but anticipate income increasing annually.
Extended Monthly payments that may be fixed or graduated for 25 years Payments will be less but the borrower will pay more interest.
Income Based (IBR) Monthly payments based on income (15% of discretionary income.) After 25 years of qualifying monthly payments the remaining loan balance is forgiven. Borrower must have a financial hardship and qualify. Borrower has lower monthly payments but pays more interest.
Income Sensitive (ISR) (FFEL Loans only) Monthly payments based on income for 10 years. Similar to the ICR but for FFEL Loans. Borrower must have a financial hardship and qualify annually. A borrower has lower monthly payments for a time period but pays more interest.
Income Contingent (ICR) (Direct Loans only) Monthly payments based on income (20% of discretionary income.) After 25 years of qualifying monthly payments the remaining loan balance is forgiven. Borrower must have a financial hardship and qualify. Borrower has lower monthly payments but pays more interest.
Pay As You Earn (Direct Loans only) Monthly payments based on income (10% of discretionary income.) After 20 years of qualifying monthly payments the remaining loan balance is forgiven. Borrower must have a financial hardship and qualify. Must have been new borrower as of 10/1/07 and received a disbursement after 10/1/11.

Repayment Calculators

Below are two loan repayment calculators that can help borrowers compute estimated loan payments.

Updated on June 16, 2014 9:28 AM