Close to nine out of 10 federal student loan borrowers who are in repayment plans that allow them to stretch smaller monthly payments out over 20 or more years say they are working, but half earn $35,000 a year or less.

That may explain why one-third of borrowers in income-driven plans surveyed by Navient say they expect to stay in the plans until their loans are paid off or forgiven, and about the same number expect that they expect they will be eligible for some form of forgiveness at the end of the line.

Income-driven repayment plans help borrowers stay current on their loans by capping monthly payments at between 10 and 20 percent of discretionary income, depending on the plan. If the borrower has no discretionary income, they don’t have to make payments on their loans — a situation that one-third of borrowers in the plans are currently in, Navient said.

But stretching payments out over 20 or 25 years instead of the standard 10 years means that borrowers may pay more in total interest over the life of the loan.

In addition to higher borrower costs, dialing back payments can cause uncertainty for investors who have purchased asset-backed securities backed by federal student loans made before 2010.

Navient is one of the largest issuers of asset-backed securities in the world, having bundled and sold more than $275 billion of private education and Federal Family Education Loan Program (FFELP) loans into investment securities.

Navient has acknowledged that repayment rates of FFELP loans are below historical trend lines, blaming the fact that more borrowers are in deferment, forbearance or income-driven repayment plans. But the company has urged credit rating agencies that are considering downgrading billions in bonds backed by FFELP loans not to overreact.

FFELP lending — in which private lenders originated loans guaranteed by the federal government — was shut down in 2010. The federal government now makes student loans directly, with Navient and other loan servicers collecting payments on its behalf.

In releasing the results of its survey today, Navient said one in five Department of Education borrowers it collects payments from and one-third of dollar balances are enrolled in income-driven repayment plans.

A longtime news reporter and editor, Matt Carter is out to help consumers find the information they need to make informed decisions about their personal finances. He's an avid producer and consumer of news and analysis about new business models and tools, market trends, and politics and regulations. Email: