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    Repayment Plans

    Federal student loan repayment plans include the Standard, Extended, Graduated, Income-Based, Pay As You Earn, REPAYE, Income-Contingent, and Income-Sensitive plans.

    HomeManage LoansStudent Loan RepaymentRepayment Plans

    Choose the federal student loan repayment plan that’s best for you.

    To make your payments more affordable, repayment plans can give you more time to repay your loans or can be based on your income.

    Use Loan Simulator

    Types of Repayment Plans

    Repay Your Federal Perkins Loan

    Consolidate Your Loans

    Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time—for free.

    Contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan. You can get information about all of the federal student loans you have received and find the loan servicer­ for your loans by logging in to "My Federal Student Aid."

    Use Loan Simulator

    Before you contact your loan servicer to discuss repayment plans, you can use Loan Simulator to get an early look at which plans you may be eligible for and see estimates for how much you would pay monthly and overall.

    Private student loans you may have received are not federal loans and are not included in "My Federal Student Aid."

    Types of Repayment Plans

    Standard Repayment Plan

    Eligible Borrowers

    All borrowers are eligible for this plan.

    Monthly Payment and Time Frame

    Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

    Eligible Loans

    Direct Subsidized and Unsubsidized Loans

    Subsidized and Unsubsidized Federal Stafford Loans

    all PLUS loans

    all Consolidation Loans (Direct or FFEL)

    Good to know

    You’ll usually pay less over time than under other plans.

    Standard Repayment Plan with a 10-year repayment period is not a good option for those seeking Public Service Loan Forgiveness (PSLF).

    Standard Repayment Plan for Consolidation Loans is not a qualifying repayment plan for PSLF.

    Read more about the Standard Repayment Plan

    Graduated Repayment Plan

    Eligible Borrowers

    All borrowers are eligible for this plan.

    Monthly Payment and Time Frame

    Payments are lower at first and then increase, usually every two years, and are for an amount that will ensure your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

    Eligible Loans

    Direct Subsidized and Unsubsidized Loans

    Subsidized and Unsubsidized Federal Stafford Loans

    all PLUS loans

    all Consolidation Loans (Direct or FFEL)

    Good to know

    You’ll pay more over time than under the 10-year Standard Plan.

    Generally not a qualifying repayment plan for PSLF.

    Read more about the Graduated Repayment Plan

    Extended Repayment Plan

    Eligible Borrowers

    If you're a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.

    Monthly Payment and Time Frame

    Payments may be fixed or graduated, and will ensure that your loans are paid off within 25 years.

    Eligible Loans

    Direct Subsidized and Unsubsidized Loans

    Subsidized and Unsubsidized Federal Stafford Loans

    all PLUS loans

    all Consolidation Loans (Direct or FFEL)

    Good to know

    Your monthly payments will be lower than under the 10-year Standard Plan or the Graduated Repayment Plan.

    You’ll pay more over time than under the 10-year Standard Plan.

    Not a qualifying repayment plan for PSLF.

    Revised Pay As You Earn Repayment Plan (REPAYE)

    Eligible Borrowers

    Any Direct Loan borrower with an eligible loan type may choose this plan.

    Monthly Payment and Time Frame

    Your monthly payments will be 10 percent of discretionary income.

    Payments are recalculated each year and are based on your updated income and family size.

    You must update your income and family size each year, even if they haven’t changed.

    If you're married, both your and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions).

    Any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).

    Eligible Loans

    Direct Subsidized and Unsubsidized Loans

    Direct PLUS Loans made to students

    Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

    Good to know

    You’ll usually pay more over time than under the 10-year Standard Plan.

    You may have to pay income tax on any amount that is forgiven.

    Good option for those seeking PSLF.

    Read more about the Revised Pay As You Earn Repayment Plan (REPAYE)

    Pay As You Earn Repayment Plan (PAYE)

    Eligible Borrowers

    You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.

    Monthly Payment and Time Frame

    Your monthly payments will be 10 percent of discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan. Payments are recalculated each year and are based on your updated income and family size.

    You must update your income and family size each year, even if they haven’t changed.

    Source : studentaid.gov

    What Is the Standard Repayment Plan on Student Loans?

    The standard repayment plan on student loans splits the amount you owe into 120 equal payments over 10 years, limiting the amount of interest you pay.

    What Is the Standard Repayment Plan on Student Loans?

    You pay the least interest and get out of student loan debt the fastest with the standard 10-year repayment plan.

    Ryan Lane Oct 2, 2020

    Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

    The standard repayment plan is the basic plan for repaying student loans. You’re automatically placed in this plan when you start repayment, unless you select a different option. Here are the key details about the standard repayment plan on student loans:

    Repayment length: 10 years.

    Number of payments: 120.

    Payment amounts: The same amount each month.

    Other qualifications: Must have federal student loans.

    Is standard repayment right for you?

    The standard repayment plan on student loans may make sense for you if you want to limit the amount you pay overall. Payments under standard repayment are larger than under other plans that extend your repayment term. But you’ll pay the least interest and finish repayment the fastest using standard repayment.

    » MORE: Student loan repayment options: Find the best plan for you

    If standard payments are too expensive, you may be able to lower your monthly bills with income-driven repayment, extended repayment or graduated repayment. Keep in mind that any plan that decreases your payments will likely increase the amount of interest you pay. Generally, stick with standard repayment if you can afford it.

    Payments under the standard repayment plan

    Standard repayment divides the amount you owe into 120 level payments so you pay the same amount each month for 10 years. Under this plan, payments can’t be less than $50.

    For example, let’s say you have a $35,000 student loan with an interest rate of 4%. With the standard repayment plan, you’d pay $354 each month and $42,523 overall.

    Plug your own loan information into the Education Department’s Loan Simulator to get an idea of how much you’d pay under the standard repayment plan on student loans, as well as other repayment plans.

    » MORE: How to change your student loan repayment plan

    Pay off loans faster

    If you’re comfortable making standard payments, consider ways to pay your student loans off even faster. For example, there’s no penalty for prepaying loans under any federal student loan repayment plan. Just make sure your servicer applies the extra money to your principal balance, not your next payment.

    You also may be able to refinance federal student loans into a new private loan. This will cost you access to income-driven repayment and other federal loan benefits. But if you don’t think you’ll need those options — and were planning to stick with standard repayment anyway — refinancing could save you money if you qualify for a lower interest rate.

    » MORE: Compare student loan refinance lenders

    About the author: Ryan Lane is an assistant assigning editor for NerdWallet whose work has been featured by The Associated Press, U.S. News & World Report and USA Today. Read more

    DIVE EVEN DEEPER IN STUDENT LOANS

    Income-Driven Repayment: Is It Right for You?

    by Ryan Lane, Anna Helhoski

    Read more

    How Student Loan Income-Based Repayment Is Calculated

    by Ryan Lane Read more

    Calculate Your Discretionary Income

    by NerdWallet Read more

    Explore STUDENT LOANS

    Spot your saving opportunities

    See your spending breakdown to show your top spending trends and where you can cut back.

    FIND EXTRA SAVINGS

    Source : www.nerdwallet.com

    Guide to Federal Student Loan Repayment Plans – Forbes Advisor

    Getting student loans is relatively easy, paying them off is a more involved multi-year process. Forbes Advisor explains all eight payment options in detail

    For better or worse, getting a student loan is not nearly as difficult as planning to pay one-off. There are a range of ways to pay down federal student loans beyond the standard 10-year plan; if you’re interested in an income-driven repayment plan (IDR), for example, you have multiple possibilities to choose from.

    When you complete exit counseling upon leaving school, you’ll have the option to pick a repayment plan. If you don’t, you’ll automatically be placed on the 10-year standard repayment plan. But you can change plans at any time once you’ve begun paying down your loans. Use this guide to decide which option is best for you.

    Federal Student Loan Repayment Plans

    You can divide federal student loan repayment plans into two buckets: traditional plans and income-driven plans. Your repayment goals typically determine the best choice for your circumstances. Do you want to pay off your student loans fast to minimize interest charges, or lower your monthly payment to maximize affordability?

    Your student loan servicer is the entity that will help you switch repayment plans if you decide to. Here are the plans you can choose from:

    Traditional Repayment Plans

    Standard repayment plan

    Graduated repayment plan

    Extended repayment plan

    Income-driven Repayment Plans

    Revised Pay As You Earn (REPAYE)

    Pay As You Earn (PAYE)

    Income-based repayment (IBR)

    Income-contingent repayment (ICR)

    Income-sensitive repayment (ISR)

    Traditional Repayment Plans

    Standard Repayment Plan

    The standard repayment plan (for non-consolidated loans) features fixed payments made over 10 years. Since this is one of the shortest repayment periods offered, and monthly payments don’t change, it saves you the most money in interest. The catch is that the monthly payments may be slightly higher than what you’d receive on other plans.

    The standard plan is ideal for someone looking to pay off their loans as quickly as possible, or someone who has a high income and doesn’t want to face even larger monthly payments on an income-driven plan. You shouldn’t use this plan if you’re seeking Public Service Loan Forgiveness (PSLF), since this program offers loan forgiveness after 120 payments—and on the standard plan, you’ll have paid off your loans by that time. Instead, choose an income-driven repayment plan, which we outline below.

    If you consolidate multiple federal loans into a single loan and choose the standard plan, then your repayment period will last from 10 to 30 years, depending on the total amount of debt you have.

    Pros

    Comparatively short repayment term means you’ll pay less interest over time

    Fixed monthly payments help you budget

    Cons

    Potentially higher monthly payments than other plans

    Since payments are fixed, if your income drops, your loan bill may strain your finances

    Graduated Repayment Plan

    The graduated repayment plan features lower initial payments that increase every two years. Similar to the standard plan, the repayment period is 10 years. It’s best if you’re looking to pay off your loans quickly, but you have a low starting income that is expected to grow throughout the 10-year repayment period.

    We don’t recommend this plan for those seeking PSLF, and, as with the standard plan, the repayment period may be as long as 30 years if you have consolidation loans.

    Pros

    10-year repayment period allows you to free yourself of student debt faster than other options

    Payments rise over time, allowing new graduates to more easily handle student loan payments on entry-level wages

    Cons

    If your income doesn’t grow as expected, higher payments toward the end of the loan repayment period may strain your finances

    You’ll pay slightly more over time compared to the standard repayment plan since more interest accrues during years when you’re paying less

    Extended Repayment Plan

    If you have more than $30,000 in outstanding federal student loans, you can qualify for the extended repayment plan, which allows you to stretch out the repayment period for up to 25 years. Monthly payments may be fixed or graduated, and they’re generally lower than those found on the standard or graduated plans.

    The extended repayment plan may sound like a good option, but if you’re seeking a lower payment and longer term, you’re better off choosing an income-driven plan. That’s because these provide forgiveness on the remaining balance after 20 or 25 years. You’ll have to pay income taxes on the forgiven amount, but you’ll still end up paying less overall than you would have on the extended plan.

    Pros

    Lower monthly payments than the standard and graduated plans, making the loans less burdensome on a monthly basis

    Monthly payments may be fixed or graduated

    Cons

    Due to the longer repayment period, you will pay more interest compared to other plans

    No forgiveness option

    You must have more than $30,000 in outstanding federal student loans to qualify

    Income-driven Repayment Plans

    There are four plans that base your monthly payment on your income and family size. Depending on the plan, each month you’ll pay 10% to 20% of your discretionary income, as determined by the government. Some people may qualify for payments of $0, depending on their circumstances. Many IDR plans require you to meet certain income requirements, but others are available to anyone with eligible federal student loans.

    Source : www.forbes.com

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