Federal Student Loan Repayment

Borrowers may repay their federal student loans under a variety of repayment plans. However, all borrowers are automatically enrolled in the Standard repayment plan when they leave school. They must opt into any of the others, provided they meet the eligibility criteria. Borrowers can opt into any plan for which they are eligible at any point during repayment and generally can change options during repayment. Borrowers may also pre-pay (make larger payments than the minimum required) at any time without penalty.

The Standard repayment is a 10-year repayment plan in which the borrower makes 120 monthly payments that fully repay the loan and any accrued interest. Borrowers can make fixed monthly payments or payments that gradually increase over the life of the loan.

Extended repayment allows borrowers with balances of $30,000 and more to repay over 25 years at fixed or gradually increasing payments.Consolidation, like extended repayment, allows borrowers to lengthen the term of their loans, through combining one or more federal loans.

Income Based Repayment (IBR) allows borrowers to make monthly payments based on their incomes if they meet a debt-to-income test. Borrowers may opt into IBR if their payments under that plan would be lower than payments under the Standard (10-year) repayment plan. A variety of income-driven plans exist, and the percentage of income and borrow must pay, as well as for how long, are determined by when a borrower first took out federal loans. For more information about loan repayment plans, click here. borrowers. Separately, borrowers in either plan qualify for loan forgiveness after 10 years of payments if they work in virtually any non-profit or government job.