When it comes to repaying your federal student loan, there is a lot to consider. Understanding the details of repayment can save you time and money. Find out when repayment starts, how to make your payment, repayment plan options, what to do if you have trouble making payments.
You must repay a student loan even if your financial circumstances become difficult. Loans cannot be canceled because you did not get the education or job you expected, and they cannot be canceled because you did not complete your education.
You do not have to begin repaying most federal student loans until after you leave the university or drop below half-time enrollment.
Your loan servicer or lender must provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment. For those students who do not remember their lender, check with the National Student Loan Data System.
If you received a Federal Perkins Loan, check with the Bursar’s office of Credit and Collections for information.
THE STANDARD REPAYMENT PLAN
The Standard Repayment Plan allows you to pay off your federal student loans in the shortest amount of time. This repayment plan saves you money over time because your monthly payments may be slightly higher than payments made under other plans, but you will pay off your loan in the shortest time. For this reason, you will pay the least amount of interest over the life of the loan.
Under this plan, your monthly payments are:
- A fixed amount of at least $50.00 each month
- Payment period is up to 10 years
Find out more about the Standard Repayment Plan.
INCOME BASED REPAYMENT (IBR)
If your student loan debt is high relative to your income, you may qualify for the Income-Based Repayment Plan (IBR).
Income-Based Repayment (IBR) is designed to reduce monthly payments to assist with making your student loan debt manageable.
To qualify for IBR, you must have a partial financial hardship. You have a partial financial hardship if the monthly amount you would be required to pay on your IBR-eligible federal student loans under a 10 year Standard Repayment Plan is higher than the monthly amount you would be required to repay under IBR. Your payment amount may increase or decrease each year based on your income and family size.
Once you have initially qualified for IBR, you may continue to make payments under the plan even if you no longer have a partial financial hardship.
Find out whether you are eligible for Income Based Repayment (IBR).
PAY AS YOU EARN REPAYMENT PLAN
The Pay As You Earn Repayment Plan helps keep your monthly student loan payments affordable and usually has the lowest monthly payment amount of the repayment plans that are based on your income.
To qualify for Pay As You Earn, you must have a partial financial hardship. You have a partial financial hardship if the monthly amount you would be required to pay on your eligible federal student loans under a 10 year Standard Repayment Plan is higher than the monthly amount you would be required to repay under Pay As You Earn.
For this purpose, your eligible student loans include Direct Loans as well as certain types of Federal Family Education Loan (FFEL). Although your FFEL loans cannot be repaid under Pay As You Earn, the FFEL program loans are counted in determining whether you have a partial financial hardship.
Find out whether you are eligible for Pay As You Earn.
INCOME CONTINGENT REPAYMENT PLAN (ICR)
If you have a low income but do not qualify for the Income-Based Repayment (IBR) Plan or the Pay As You Earn Repayment Plan and your need to make lower Direct Loan payments, the ICR Plan may be for you.
Under this plan, your monthly payments are:
- Made for a maximum of 25 years.
- Based on your adjusted gross income, your family size and the total amount of your Direct Loans; and the lesser of the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that changes with your annual income or 20 percent of your monthly discretionary income.
Find out whether you are eligible for the Direct Loan Income Contingent Repayment Plan.
INCOME-SENSITIVE REPAYMENT PLAN
The Income-Sensitive Repayment Plan is available to low-income borrowers who have Federal Family Education Loan (FFEL) Program loans.
Under this plan, your monthly payments:
- increase or decrease based on your annual income and are made for a maximum period of 10 years.
Find out if you are eligible for the Income - Sensitive Repayment Plan.