- Standard Repayment is the traditional option. You pay a set amount over the maximum repayment period. Payments are changed each year to reflect the change in interest rates. A $50 minimum payment applies in most cases.
- Under Graduated Repayment, your payments change (usually increasing) over the repayment period. No installment can be more than three times greater than any other installment.
- Income-Sensitive Repayment is available for loans made before July 1, 2010, through the Federal Family Education Loan Program. The payment amount will be based on your expected total gross monthly income from all sources. This figure doesn't include income earned or received by your spouse unless you and your spouse have a joint Consolidation Loan. You have to provide the income information each year so your lender can adjust your payments as needed.
- Extended Repayment is an option if you don't owe anything on student loans you took out before October 7, 1998, and you owe more than $30,000 in student loans. Payments are fixed annual or graduated amounts, and you can take up to 25 years to repay your loans, depending on how much you owe.
- Pay As You Earn generally has the lowest monthly payments of all the repayment plans offered by the U.S. Department of Education. It can be used by borrowers who have a partial financial hardship. Only three types of federal student loans are eligible: Federal Direct Stafford Loans, Federal Direct PLUS Loans made to graduate or professional students, and Federal Direct Consolidation Loans that do not include a Federal PLUS Loan made to a parent. Borrowers must have received one of those loans after Sept. 30, 2011. Borrowers who are repaying loans received before Oct. 1, 2007, are not eligible.
Income Based Repayment (IBR) caps your monthly payment at an affordable amount based on your income and family size. Any Stafford, Grad PLUS or Consolidation Loan made under either the Direct Loan or FFEL program is eligible for repayment under IBR, EXCEPT loans that are currently in default, parent PLUS Loans, or Consolidation Loans that repaid a parent PLUS Loan. The loans can be new or old, and for any type of education (undergraduate, graduate, professional, job training).
You may enter IBR if your federal student loan debt is high relative to your income and family size. While your lender will determine your eligibility, you can use the U.S. Department of Education's IBR calculator to estimate if you would likely benefit from the IBR plan. It looks at your income, family size, and state of residence to calculate your IBR monthly payment amount. If that amount is lower than the monthly payment under a 10–year standard repayment plan, you are eligible to repay your loans under IBR. If you repay under the IBR plan for 25 years and meet certain other requirements, any remaining balance will be canceled.
- Income-Contingent Repayment (ICR) Plan is available for Direct Loans only. Your monthly payments will be based on your annual income (and that of your spouse, if married), your family size, and the total amount of your Direct Loans. Borrowers have 25 years to repay under this plan; any unpaid portion that remains after 25 years will be forgiven. However, you may have to pay income tax on the amount that is forgiven. Direct PLUS Loans made to parent borrowers may not be repaid under the ICR Plan.
Under the standard, graduated or income-sensitive repayment options, you have up to 10 years to repay each Stafford, SLS and PLUS Loan. Your minimum monthly payment will be set by the loan servicer and will depend on how much you owe and the repayment plan you choose.
If you have a Consolidation Loan, you may be able to take up to 30 years to repay it, depending on how much you owe.