Note: Big changes are coming to the student loan system, including changes to payment plan options, due to a new law and recent court cases. Stay informed by signing up for updates from NCLC and checking studentaid.gov.
There are several payment plan options available for federal student loan borrowers. When you leave school, after your grace period ends, you will automatically be placed in a Standard repayment plan unless you contact your loan servicer to sign up for a different plan. But you can change to a different plan that might work better for you.
The best plan for you will depend on your goals and financial circumstances. Most people are best off with either the Standard repayment plan or an Income-Driven Repayment (IDR) plan. In the Standard plan, your payments are the same every month, and are set to pay off your loans in full within a set number of years. With an IDR plan, your payments are set based on your income and family size every year, and may be more affordable than a Standard plan. With an IDR plan, you may be able to have any remaining balance on your loans canceled automatically after 20 to 30 years of payments. This depends on the plan you’re enrolled in and the amount you originally borrowed.
For more help deciding which plan is right for you, visit our page on choosing a repayment plan.
Perkins Loans: Perkins Loans are not eligible for the same types of payment plans as other federal student loans. If you have a Perkins Loan, contact your loan holder (usually the school you attended) to find out what your payment plan options are. If you have a Perkins Loan and want to repay it using an income-driven repayment (IDR) plan, you can apply to consolidate the Perkins loan and then repay using an IDR plan. For more information, see our page on IDR.
Parent PLUS Borrowers: Parent PLUS Loans are eligible for almost all of the same repayment plans as Direct, Graduate PLUS, and FFEL Loans, with one big exception: the income-driven repayment plans are not generally available to Parent PLUS borrowers unless they first consolidate the Parent PLUS Loan into a Direct Consolidation Loan before July 1, 2026, and enroll in an IDR plan before July 1, 2028. For more information, see our page on IDR.
Standard Repayment
- All borrowers are eligible for this plan.
- You are automatically placed in this plan unless you choose another one.
- Payments are a fixed amount that is designed for you to pay off the loan within a set number of years (10 years for most people who borrowed all of their loans before July 1, 2026, up to 25 to 30 years for some Consolidation Loans and for people who borrow after July 1, 2026).
- You’ll usually pay less over time than under other plans, but your initial monthly payments will probably be the highest under this plan.
- If you work in public service and are looking to get your loans forgiven after 10 years through PSLF, this might not be the best plan for you.
- You can always make extra payments to pay down your loans faster and reduce the amount of interest you pay.
Graduated Repayment
- All borrowers are eligible for this plan if they take out all of their loans prior to July 1, 2026.
- You have to sign up for this plan by contacting your loan servicer.
- Payments are lower at first and then increase every two years to pay your loans off within 10 years (up to 30 years for Consolidation Loans).
- You’ll pay more on this plan than under a Standard Repayment plan.
- This plan is not a good option if you’re hoping to have your loans canceled under PSLF or IDR loan cancellation. It is also risky unless you are confident you will be able to pay more on your loans every two years.
Income-Driven Repayment
- There are several IDR plans. All Direct Loans and FFEL Loans are eligible for at least one IDR plan, except for Parent PLUS Loans. Parent Plus Loans are only eligible for an IDR plan if they are first consolidated into a Direct Consolidation Loan by July 1, 2026, and enrolled in an IDR plan by July 1, 2028.
- Your payments are based on your income, family size, and which plan you enroll in. Payments can be as low as $0. You usually need to recertify your income each year, and your payments may change based on changes in your income and family size.
- After 20-30 years of payments on an IDR plan, any amount you still owe should be automatically canceled.
- This is the best option if you’re seeking PSLF cancellation or an affordable monthly payment that is based on your income.
Extended Repayment
- Only borrowers who owe more than $30,000 in Direct or FFEL Loans and took out all of their loans prior to July 1, 2026, are eligible for this plan.
- Payments may be the same amount each month for the entire length of the loan (fixed), or may increase gradually over time (graduated), to make sure that your loans are paid off within 25 years.
- Your monthly payments will be lower than under a Standard or Graduated plan, but you will pay for more years.
