Need help choosing a payment plan?
You can use the Department of Education’s free Loan Simulator Tool to compare plans and decide which one is right for you.
Choosing your payment plan depends on what your goals are and what you can afford. You have options for managing your student loan debt no matter what your situation is. If you are struggling with payments, finding a different repayment plan may make your loan situation easier to manage.
I want to pay off my loans quickly and limit the amount of interest I pay
If you want to pay off your student loans quickly, consider a Standard plan. In the Standard plan, your payments are the same amount every month and you will pay off your loan within 10 years (or within up to 30 years for Consolidation Loans). You will generally pay the least amount of interest under the Standard plan.
Another option is the Graduated plan, which allows you to pay off your loans in the same amount of time as the Standard plan but has monthly payments that start low and go up every two years. Graduated plans may be an ok option for borrowers who are confident their income will increase steadily every year, but there are real downsides. First, you’ll pay more in interest under a Graduated plan than a Standard plan. Second, your income may not increase as predicted, and your rising payments may become unaffordable. Third, payments in a Graduated plan generally don’t count toward having your loans canceled through IDR or PSLF. For these reasons, most borrowers are better off under either a Standard Plan or an Income-Driven Repayment (IDR) plan.
If you work for the government or a nonprofit, consider an Income-Driven Repayment (IDR) plan, as you may be eligible to have your loans forgiven after 10 years of payments through the Public Service Loan Forgiveness (PSLF) program.
Another way to reduce the amount you pay on your loans is to sign up for automatic payments to come out of your bank account. If you have Direct Loans, you will get a 0.25% interest rate deduction while you participate in automatic debit payments.
You can also make extra payments to pay down your loans faster and reduce the amount of interest you pay.
I need a lower monthly payment and more time to pay my student loans
If you can’t afford your monthly payment or need more time to repay your loans, consider an IDR plan. With an IDR plan, your payments are based on your income and family size and could be as low as $0 per month. On an IDR plan, you are eligible to have any remaining balance on your loans canceled after 20 to 25 years of payments, and for some borrowers, loans will be canceled in as little as 10 years! This depends on the plan you’re enrolled in and the amount you originally borrowed. Borrowers who work public service jobs and are eligible for PSLF may also be able to have their loans canceled after 10 years while making payments in an IDR plan.
Another option for borrowers with over $30,000 in Direct or FFEL loans is an Extended plan, which stretches payments over 25 years. But beware: payments in an Extended plan typically do not qualify toward having your loans canceled through IDR or PSLF, and you’ll pay more in total in an Extended plan than in a 10-year Standard 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. You can also consolidate your Perkins Loan into a Direct Consolidation Loan to qualify for different repayment plans, but there may be downsides to consolidation. See our page on consolidating loans for more information.
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. For more information, see our page on IDR.
Private Student Loan Borrowers: If you have private student loans, you will have to contact your loan servicer for your repayment options. These options may be very limited. See our page on Repaying Private Student Loans for more information.
