If you have federal student loans, it's important that you understand your loan repayment options. For example, did you know that you have the option to choose a repayment plan? That's right. While your loan servicer (the company that handles the billing and other services on your federal education loan) will automatically place your loan on the Standard Repayment Plan, you CAN choose another plan.
The Department of Education offers several traditional and income-driven repayment plans with different payment options. So, make sure to take the time to understand these options and find the plan that works best for you.
Generally, repayment plans offer three types of payments:
- Fixed Payments: The Standard Repayment Plan and Extended Repayment Plan offer payments that remain the same amount for the life of the loan.
- Graduated Payments: The Graduated Repayment Plan and Extended-Graduated Plan offer payments that start out low and gradually increase every two years.
- Income-Driven Payments: The three income-driven repayment plans offer payments that are calculated based on your income.
Choosing a repayment plan can feel overwhelming. Don't worry—there are several resources available to help you understand the repayments plans, determine your eligibility for each plan, and make the right decision for you.
- Use the online Repayment Estimator to find out which plans you may be eligible for and to estimate how much you would pay under each plan. (If you log-in, the Repayment Estimator will use your actual loan balance to estimate your eligibility and payment information.)
- Get detailed information about each repayment plan on the Department of Education website.
- Watch the Repayment: What to Expect video to get a high-level overview of the repayment plans.
- Check out the Repayment Plans infographic for an easy-to-understand visual that will give you some key points to keep in mind as you are choosing a repayment plan.
- Read the Repay Your Federal Student Loans fact sheet for additional information on loan repayment and the repayment plans.
- Contact your loan servicer to discuss your options and choose a federal student loan repayment plan that's best for you.
Remember, the repayment plans discussed here are for federal loans only. If you have private loans, check with your lender about available repayment options.
For more information on federal student loan repayment plans, visit Studentaid.ed.gov/repay-loans.
Tara Marini is a communication analyst at the Department of Education's office of Federal Student Aid.
