Federal Loan Repayment Options

Your student loan is a debt you owe for your education should be treated like any other kind of debt (e.g., mortgage, car loan). As with any debt, you are responsible for repaying your student loans in full even if: 

  • you did not complete school
  • you cannot find a job in your field of study, or
  • you feel you did not receive the educational or other services you purchased.

Important note: if you ever have difficulty repaying your loan, contact your loan holder immediately as you have options such as changing your repayment plan, deferment, and forbearance. 

Repaying Direct/Federal Stafford Loans

  • After you stop attending school at least half time, withdraw, or graduate, a 6-month grace period begins. You receive only one grace period per loan.
  • Repayment begins after the grace period ends, with your first payment usually due 45-60 days later.
  • You may prepay your loan at any time without penalty. Prepayment may substantially reduce the amount of interest you pay. 

Repaying Direct/Federal PLUS Loans

  • Repayment begins the date the loan is fully disbursed, with your first payment due no more than 60 days later.
    • You can request a deferment while in school.
    • For loans first disbursed on or after July 1, 2008, you can request a deferment while you are in school and up to six months after you graduate, withdraw, or drop below half-time enrollment.
  • The maximum repayment period is 10 years.
  • You may prepay your loan at any time without penalty. Prepayment may substantially reduce the amount of interest you pay. 

Repaying Federal Perkins Loan

  • After you stop attending school at least half time, your grace period begins.
    • Your initial grace period is nine months.
    • If you re-enroll in school at least half time during this grace period and are approved for an in-school deferment, you get another 9-month grace period the next time you stop attending school.
    • If you re-enroll after your initial 9-month grace period has ended, your next grace period will only be six months.
  • Repayment begins after the grace period ends; maximum repayment period is 10 years. 
  • The minimum monthly payment is $40, but may be higher depending on your balance.
  • You may prepay your loan at any time without penalty. Prepayment may substantially reduce your interest costs.

Federal Repayment Plan 

Eligible Loan Programs Payment Terms Important Information
Standard Repayment Plan
  • Direct/Federal Subsidized/Unsubsidized Stafford Loans
  • Graduate and Parent PLUS Loans
  • Direct/FFEL Consolidation Loans
Fixed monthly payment (minimum $50) for up to 10 years (30 years for Consolidation Loans).  The least amount of interest accrues over the life of the loan because the principal balance decreases at the quickest rate. 
Graduated Repayment Plan
  • Direct/Federal Subsidized/Unsubsidized Stafford Loans
  • Graduate and Parent PLUS Loans
  • Direct/FFEL Consolidation Loans
Monthly payment is initially low and gradually increases over time for up to 10 years (30 years for Consolidation Loans).  More interest accrues over the life of the loan because the principal balance decreases at a slower rate than under the Standard Repayment Plan. 
Extended Repayment Plan
  • Direct/Federal Subsidized/Unsubsidized Stafford Loans
  • Graduate and Parent PLUS Loans
  • Direct/FFEL Consolidation Loans
Monthly payment is fixed or graduated for up to 25 years. 

In order to qualify you must have more than $30,000 in outstanding Direct/FFEL Program Loans. The monthly payment is less than under the Standard or Graduated Repayment Plans though more interest accrues over the life of the loan than under the Standard Repayment Plan because the principal balance decreases at a lower rate.    

Revised Pay As You Earn Repayment Plan (REPAYE)
  • Direct Subsidized and Unsubsidized Stafford Loans
  • Graduate PLUS Loans
  • Direct Consolidation Loans (excluding Direct/FFEL Parent PLUS Loans)
 
The monthly payment is determined based on 10% of your (and, if applicable, your spouse's) discretionary income and family size; recalculated each year. Outstanding balance after 20-25 years is forgiven.    The monthly payment may be more than under the Standard Repayment Plan. If outstanding loans are forgiven, you may have to pay income tax on them. 
Pay As You Earn Repayment Plan (PAYE)
  • Direct Subsidized and Unsubsidized Stafford Loans
  • Graduate PLUS Loans
  • Direct Consolidation Loans (excluding Direct/FFEL Parent PLUS Loans)
The monthly payment is determined based on 10% of your (and, if you are married and file jointly, your spouse's) discretionary income and family size; recalculated each year. Outstanding balance after 20 years is forgiven.   

In order to qualify you must be a new borrower on or after 10/1/07 and must have received a Direct Loan disbursement on or after 10/1/11. The monthly payment will not be more than under the Standard Repayment Plan. However, more interest accrues over the life of the loan than under the Standard Repayment Plan because the principal balance decreases at a lower rate. If married and file jointly, your spouse's loan debt will be taken into consideration. If outstanding loans are forgiven, you may have to pay income tax on them.    

Income-Based Repayment Plan (IBR) 
  • Direct/Federal Subsidized/Unsubsidized Stafford Loans
  • Graduate PLUS Loans
  • Direct/FFEL Consolidation Loans (excluding Direct/FFEL Parent PLUS Loans)
The monthly payment is determined based on 10-15% of your (and, if you are married and file jointly, your spouse's) discretionary income and family size; recalculated each year. Outstanding balance after 20-25 years is forgiven.

In order to qualify you must have a high debt-to-income ratio. The monthly payment will not be more than under the Standard Repayment Plan. However, more interest accrues over the life of the loan than under the Standard Repayment Plan because the principal balance decreases at a lower rate. If married and file jointly, your spouse's loan debt will be taken into consideration. If outstanding loans are forgiven, you may have to pay income tax on them.       

Income-Contingent Repayment Plan (ICR) 
  • Direct Subsidized and Unsubsidized Stafford Loans
  • Graduate PLUS Loans
  • Direct Consolidation Loans

The monthly payment is either what your payment would be under a fixed income-based payment plan over 12 years or 20% of your discretionary income - whichever is less; recalculated each year based on family size, income, and total Direct Loan debt. Outstanding balance after 25 years is forgiven.  

The monthly payment may be more than under the Standard Repayment Plan. If applicable, your spouse's income and loan debt will be taken into consideration if you file jointly or choose to repay Direct Loan debt together with spouse. If outstanding loans are forgiven, you may have to pay income tax on them. Parent PLUS Loan borrowers may qualify if they consolidate.    

Income-Sensitive Repayment Plan
  • Federal Subsidized and Unsubsidized Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans
 
The monthly payment is based on your annual income; time frame of 15 years maximum.   More interest accrues over the life of the loan than under the Standard Repayment Plan because the principal balance decreases at a lower rate. Income calculation may vary from lender to lender - monthly payment could vary.  

Public Service Loan Forgiveness (PSLF) 

If you have made a minimum of 120 monthly payments under an eligible repayment plan while simultaneously working full-time for an eligible employer, you may qualify for the Public Service Loan Forgiveness Program. This program forgives any remaining balance due after those 120 qualifying payments have been made. 

The following repayment plans are eligible for PSLF: 

  • Standard (10-Year) Repayment Plan
  • Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

For more information, visit the Federal Student Aid website for PSLF.