Federal Student Loan Repayment Options

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One of the benefits of having federal student loans is that many different repayment plan options are possible. There are pros and cons to each option, as well as varying eligibility requirements, so it’s important to understand those details in order to pick the best one for your personal situation.

One of the benefits of having federal student loans is that many different repayment plan options are possible. There are pros and cons to each option, as well as varying eligibility requirements, so it’s important to understand those details in order to pick the best one for your personal situation.

Here are the possible federal student loan repayment plan options:

• Do your student loans qualify for federal repayment plans?
• Traditional repayment plans
• Income-driven repayment plans
• Which repayment plan is right for me?
• Want to change your repayment plan?

Do your student loans qualify for federal repayment plans?

Federal repayment plans are designed for federal student loans only. Any loans taken out with a private lender do not apply to any federal programs. Private student loans come with a different set of forgiveness alternatives.

Here are some examples of federal student loans:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans
• Direct Consolidation Loans
• Subsidized Federal Stafford Loans
• Unsubsidized Federal Stafford Loans
• FFEL Plus loans
• FFEL Consolidation Loans

If you have private student loans, you might want to consider refinancing for lower interest and lower payments.

The student loan consolidation companies in the table below are Credible’s approved partner lenders. Because they compete for your business through Credible, you can request rates from all of them by filling out a single form. Then, you can compare your available options side-by-side. Requesting rates is free, doesn’t affect your credit score, and your personal information is not shared with our partner lenders unless you see an option you like.

Lender	Variable rates from (APR)	Fixed rates from (APR)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.79%+	4.4%+
Fixed APR: 4.4%+ Variable APR: 4.79%+ Min. credit score: 720 Loan amount: $10,000 to $400,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Military deferment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of Texas Customer service: Email, phone Soft credit check: 720 Cosigner release: No Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 - $149,000 Max. Graduate Loan Balance: $200,000 - $400,000 Offers Parent PLUS Refinancing: Does not disclose
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.26%+1	5.39%+1
Fixed APR: 5.39%+1 Variable APR: 6.26%+1 Min. credit score: Does not disclose Loan amount: $10,000 to $750,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $150,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.99%+2	5.99%+2
Fixed APR: 5.99%+2 Variable APR: 5.99%+2 Min. credit score: Does not disclose Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 12, 15 Repayment options: Military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: All states except for ME Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: College Ave Servicing LLC Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	7.41%+5	7.41%+5
Fixed APR: 7.41%+5 Variable APR: 7.39%+5 Min. credit score: 700 Loan amount: $7,500 to $200,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and submit two personal references Customer service: Email, phone Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Granite State Management & Resources (GSM&R) Max. Undergraduate Loan Balance: $150,000 to $249,000 Max. Graduate Loan Balance: $150,000 to $199,000 Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.78%+3	5.08%+3
Fixed APR: 5.08%+3 Variable APR: 4.78%+3 Min. credit score: 680 Loan amount: $10,000 to $250,000 Loan terms (years): 5, 7, 10, 12, 15, 20 Repayment options: Forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved school Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: Mohela Max. Undergraduate Loan Balance: $250,000 Max. Graduate Loan Balance: $250,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.61%+4	5.61%+4
Fixed APR: 5.61%+4 Variable APR: 6.61%+4 Min. credit score: 670 Loan amount: $5,000 to $250,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Academic deferment, military deferment, forbearance Fees: Late fee, returned payment fee Discounts: Autopay Eligibility: Must be U.S. citizen or permanent resident Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: Yes Max undergraduate loan balance: $250,000 Max graduate loan balance: $250,000 Offers Parent PLUS refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.76%+	4.49%+
Fixed APR: 4.49%+ Variable APR: 4.76%+ Min. credit score: 700 Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 15 Max. undergraduate Loan Balance: $125,000 Time to Fund: 10 to 30 days Repayment options: Immediate repayment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from an eligible institution Customer service: Email, phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: LendKey Technologies Inc. Max. graduate Loan Balance: $175,000 Credible Review: LendKey Student Loans review Offers Parent PLUS Refinancing: No
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	N/A	5.5%+
Fixed APR: 5.5%+ Variable APR: N/A Min. credit score: 670 Loan amount: $10,000 up to the total amount Loan terms (years): 7, 10, 15 Repayment options: Military deferment, loans discharged upon death or disability Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: AES Max. Undergraduate Loan Balance: No maximum Max. Gradaute Loan Balance: No maximum Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.34%+ - 10.29%+	7.06%+ - 13.72%+
Fixed APR: 5.34%+ - 10.29%+ Variable APR: 7.06%+ - 13.72%+ Min. credit score: 680 Loan amount: $5,000 to $500,000 (depending on degree) Loan terms (years): 5, 7, 10, 15, 20, 25 Time to fund: 3 business days Repayment options: Immediate, payment extension, reduced payment plan, rate reduction, term modification, extended grace period, interest only, rate and term modification, hardship forbearance, natural disaster forbearance, military forbearance, academic deferment Fees: Late fee, NSF fee Discounts: Autopay Eligibility: Must be a U.S. citizen or have permanent residency status with a valid U.S. Social Security number Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Loan servicer: Firstmark Services Max. undergraduate loan balance: $125,000 Max. graduate loan balance: $500,000 Offers Parent PLUS loans: Yes Min. income: $36,000
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	N/A	5.29%+
Fixed APR: 5.29%+ Variable APR: N/A Min. credit score: 680 Loan amount: $7,500 to $250,000 Loan terms (years): 5, 10, 15 Repayment options: Academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000 Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Rhode Island Student Loan Authority Max. Undergraduate Loan Balance: $150,000 - $249,000 Max. Graduate Loan Balance: $200,000 - $249,000 Offers Parent PLUS Refinancing: Yes
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures

Learn More: Private Student Loan Forgiveness Alternatives

Traditional repayment plans

There are three types of traditional repayment plans that come with a set repayment schedule rather than using personal factors like income to determine your payments.

Standard Repayment Plan

The standard repayment plan is the default repayment schedule that your student loan servicer sets when it’s time for you to start making payments. Payments are typically scheduled over a 10-year period.

Pros:

• Shortest repayment period
• Least amount of interest paid over time

Cons:

• Higher monthly payment
• May be difficult to make payments depending on your income after graduating

Extended Repayment Plan

When the payments on the standard plan are uncomfortably high, you could opt for an extended repayment plan. You can choose fixed monthly payments spread out over a longer period of time. So instead of paying off your balance over 10 years, you’ll instead stretch it out to as long as 25 years.

Pros:

• Creates more budget-friendly payments
• Fixed payments make it easy to plan

Cons:

• More interest paid over time
• Keeps you in debt longer

Graduated Repayment Plan

The graduated repayment plan is a type of extended repayment plan for federal student loans. Instead of having a fixed payment for the entire period, your monthly payment starts low, then increases every two years. The repayment period typically lasts up to 10 years, but it can go up to 30 years for consolidated loans.

Pros:

• Keeps payment low when you’re in an entry-level job
• Could keep your repayment term to 10 years

Cons:

• Payment increase could outpace your income growth
• Lengthening repayment to a period of more than 10 years extends your time in debt

Income-driven repayment plans

An income-driven repayment plan adjusts your monthly payment amount based on your income and family size. There are four different programs with different eligibility requirements, each of which requires an application in order to enroll. Note that parent PLUS loans aren’t eligible for these programs.

Pay As You Earn (PAYE)

The Pay As You Earn (PAYE) program keeps your payments at 10% of your discretionary income. The remaining balance is forgiven after you make payments for 20 years. Additionally, your interest can’t grow more than 10% of your balance each year.

Pros:

• Payments are relative to your income
• Monthly payment cannot exceed the amount of your standard repayment
• Limit on capitalized interest
• Balance is eventually forgiven

Cons:

• Longer repayment period
• Will pay more in interest over time

Revised Pay As You Earn (REPAYE)

Similar to the PAYE program, REPAYE also requires a payment equal to 10% of your discretionary income. But while enrolled in the program, the government pays interest on your subsidized loans and pays half the interest of your unsubsidized loans for the first three years. The repayment period lasts anywhere from 20 to 25 years.

Pros:

• Government subsidizes some interest for three years
• Loan forgiveness after 20 years for undergraduate loans and 25 years for graduate loans

Cons:

• Creates a longer repayment period
• No payment cap
• Only available for federal direct loans

Income-Based Repayment

Income-Based Repayment Plans range anywhere between 10% and 15% of your discretionary income, depending on when you took out your loans. The repayment period is between 20 and 25 years. Payments can’t exceed what they would have been with the standard repayment plan. It’s available for both Direct Loans and federally guaranteed student loans.

Pros:

• Available for more types of loans compared to income-contingent repayment
• Lowers payments overs a long period of time
• Loan balance is forgiven after 20 or 25 years
• Counts towards Public Service Forgiveness payments

Cons:

• Adds interest accrual
• Any forgiven debt under IBR is taxed

Income-Contingent Repayment

With the Income-Contingent Repayment (ICR) Plan, you’ll pay the lower of either what you would pay on a fixed plan for 12 years or an adjusted amount based on 20% of your discretionary income (divided by 12 to find your monthly payments).

Pros:

• Lower payment
• Counts as one of the four requirements of the Public Service Forgiveness plan

Cons:

• Interest continues to grow
• Any forgiven debt under ICR is taxed

Income-Sensitive Repayment

With the Income-Sensitive Repayment (ISR) Plan, your payments can rise or fall depending on your annual salary. Both Subsidized and Unsubsidized Federal Stafford Loans as well as FFEL Plus and consolidation loans are eligible. The maximum repayment period is 10 years.

Pros:

• Shorter repayment period
• FFEL loans qualify

Cons:

• Interest grows
• No forgiveness after a certain period of time

Check Out: The Complete List of Student Loan Forgiveness Programs

Which repayment plan is right for me?

Here’s a quick reference for how to weigh your federal student loan repayment options.

If you want to lower your monthly payments

If you want to pay the least interest

If you want to qualify for loan forgiveness

How to avoid choosing the wrong repayment plan

Each repayment plan has pros and cons, and it’s important to consider each plan to find the right one for you. To help you get an idea of what your monthly payment and total repayment costs will be, check out the Department of Education’s repayment estimator.

The repayment estimator, however, won’t help you evaluate what you might save if you refinance your student loans with a private lender at a lower interest rate. So, keep that in mind if that’s something you’re considering.

Want to change your repayment plan?

Your best repayment option for student loans may change at different times in your life.

Here’s what it takes to enroll in a new income-driven repayment plan:

• Use the federal loan simulator to see what repayment options you qualify for.
• Compare options, including the impact each would have on your finances in both the short term and the long term.
• Contact your loan servicer to switch your federal student repayment plan.
• Apply for the appropriate income-driven repayment plan through StudentAid.gov.
• Stay tuned for updates from your student loan servicer to understand when your new payments will begin.

It’s also possible to consolidate multiple federal student loans into one current loan.

Here are some of the advantages you can expect when you consolidate:

• • You can manage a single federal student loan payment each month instead of multiple.
  • Direct Consolidated Loans qualify for income-driven repayment plans.
  • Keep all of your federal student loan benefits, including forbearance.

Matt Carter has contributed to the reporting of this article.

About the author

Lauren Ward

Lauren Ward is a Credible authority on mortgages and personal finance. Her work has been featured by Time, This Old House, Money Under 30, The Balance, and more.

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