Compare Federal Student Loan Repayment Plan Options in 2025

Federal student loan repayment plans come with a wide range of options, from fixed monthly payments to income-based plans that adjust with your earnings. Choosing the right plan can have a significant impact on your monthly payment and overall costs.

However, starting in July 2026, new legislation will limit repayment choices for future borrowers and phase out some current plans.

This guide explains how each federal repayment plan works, how to choose the right one for your financial situation, and what to know about the upcoming changes.

Current student loan refinance rates

Current federal student loan repayment plans 

Federal student loan borrowers can choose from several repayment plans, each with different terms, monthly payment structures, and eligibility criteria:

• Standard Repayment Plan: This is the default option for most federal loan borrowers. It offers fixed monthly payments over 10 years, or up to 30 years for Direct Consolidation Loans. It’s generally the most cost-effective plan because it minimizes the amount of interest paid over time.
• Graduated Repayment Plan: Payments start low and increase every 2 years, typically over a 10-year term (or up to 30 years for consolidated loans). This plan can work if you expect your income to grow steadily over time.
• Extended Repayment Plan: If you owe more than $30,000 in federal student loans, you can extend your repayment term to up to 25 years. Payments can be either fixed or graduated. This plan lowers your monthly payment but increases the total interest you’ll pay.
• Income-Based Repayment (IBR) Plan: This income-driven repayment (IDR) plan bases payments at 10% or 15% of discretionary income for borrowers with partial financial hardship, depending on when you first took out your loans. You can qualify for forgiveness after 20 or 25 years of payments.
• Pay As You Earn (PAYE) Plan: Payments are adjusted to 10% of your discretionary income, with forgiveness after 20 years. Only borrowers who took out loans on or after Oct. 1, 2007, and received a disbursement on or after Oct. 1, 2011, are eligible.
• Saving on a Valuable Education (SAVE) Plan: This IDR plan lowers monthly payments to 5% of discretionary income for undergraduate loans and 10% for graduate loans. Forgiveness is available after 10 to 25 years, depending on your original loan balance. Due to legal challenges, borrowers on SAVE are currently in an interest-free forbearance that doesn’t count toward forgiveness. This pause is scheduled to end Aug. 1, 2025.
• Income-Contingent Repayment (ICR) Plan: ICR is the only income-driven plan available to parent PLUS loan borrowers if they consolidate their loans. Payments are adjusted to 20% of discretionary income, with forgiveness after 25 years.

Changes to federal student loan repayment plans 

Legislation passed in July 2025 includes several major updates that will reshape how federal student loans are borrowed and repaid.

“Most of the more radical changes will affect those who borrow after July 1, 2026, but there will be some impacts to those who are current borrowers,” says Mike Hunsberger, a certified financial planner (CFP) and owner of Next Mission Financial Planning.

Federal student loan borrowers can currently choose from multiple repayment plans. But starting July 1, 2026, new borrowers will be limited to just two options:

1. Standard Repayment Plan: Fixed monthly payments spread over 10 to 25 years, depending on your loan amount.
2. Repayment Assistance Plan (RAP): A new income-based plan with payments adjusted to your income over a fixed 30-year term. Any unpaid interest after each monthly payment would be waived. At the end of 30 years, any remaining balance would be forgiven.

​​A third option will remain available for current borrowers only:

1. Amended IBR Plan: For those who took out loans before July 1, 2026, this version of the Income-Based Repayment Plan removes the partial financial hardship requirement and bases payments on 10% of discretionary income over a 20-year repayment term.

If you're on a repayment plan that will be phased out, you'll need to switch to one of the above options by July 1, 2028. If you don’t select a new plan, you’ll automatically be placed in RAP.

Compare repayment plans

When comparing student loan repayment plan options, consider your budget and future goals. 

“I tell all my students that everyone’s situation is different. I ask them what are your goals for the future, what their lifestyle is, and what salary they are expecting to make,” says Robin Walker, president-elect of the Pennsylvania Association of Student Financial Aid Administrators (PASFAA), and director of graduate student financial services and compliance at Wilkes University.

The table below gives a quick overview of each plan to help you compare your options. You can also use Federal Student Aid’s loan simulator to estimate your monthly payments and see which plan best fits your budget.

How to choose the right repayment plan for you 

Your repayment plan affects both your monthly budget and how long you'll be in debt. Here are the key factors to consider when deciding which plan is right for you:

• Income: If your earnings are low, an IDR plan can help keep your payments affordable. But if you're earning a higher income, especially 6 figures or more, sticking with the Standard Repayment Plan may help you pay off your loans faster and with less interest.
• Job stability: If your job or industry is unpredictable, consider an IDR plan to lower your monthly payments and free up cash in case of a layoff. Even stable jobs can shift, so it's wise to build flexibility into your repayment strategy.
• Outstanding loan balance: Your total loan amount can influence which plans you qualify for. For example, the Extended Repayment Plan is only available if you owe more than $30,000 in federal student loans. 
• Interest costs: Lower monthly payments may sound appealing, but longer repayment terms typically mean paying more in total interest over time. Take time to compare the total interest you’d pay under each plan, not just the monthly bill.
• Eligibility for loan forgiveness: Federal forgiveness programs like Public Service Loan Forgiveness (PSLF) and IDR forgiveness are only available if you're on an income-driven repayment plan. If you're aiming for forgiveness, be sure your plan qualifies.

Keep in mind that the right plan for you today may not be the best fit down the road as your income, expenses, or career goals change.

“You want to make sure that you are accounting for the different life changes that could occur during this time, like buying a home or starting a family, and make sure that the student loan payment can still fit comfortably in their monthly budget even with those big, and expensive, life changes,” says Chris Jackson, a certified financial planner (CFP) at CPJ Financial.

Can I switch repayment plans later? 

One of the advantages of federal student loans is that you can switch repayment plans at any time, something private student loans typically don’t allow.

To change your plan, contact your loan servicer. If you're applying for an IDR plan, you'll need to provide details about your income and family size. For other plans, you can fill out a Repayment Plan Request form.

Keep in mind that switching plans can affect your repayment timeline or forgiveness eligibility. For example, moving from the Standard Repayment Plan to an IDR plan may lower your monthly payments but could also extend your repayment term and increase the total amount of interest you pay.

Should I refinance my federal loans? 

If your goal is to pay off your student loans as quickly as possible, refinancing to a lower interest rate can help reduce your overall costs.

“Refinancing makes sense when it results in a lower interest rate, a lower monthly payment, or when you want to release a cosigner,” says Walker.

That said, refinancing federal loans means giving up certain federal benefits, such as income-driven repayment, deferment, and loan forgiveness. For high earners who aren’t pursuing forgiveness, the trade-off may be worth it.

“If you have a high credit score, and you qualify for a lower interest rate with a private lender, refinancing could help you save significantly on interest. It’s also a good option if you’re confident you won’t need federal benefits like income-driven repayment plans, deferment, or loan forgiveness programs,” says Jackson. 

Before refinancing, make sure you fully understand the risks. Compare lenders, read the fine print, and think through how refinancing will affect both your short-term budget and long-term goals.

See Also: I Refinanced My Federal Student Loans, and I Don't Regret It