Repayment Options for Stafford Loans

When the time arrives, work with your lender to determine which repayment option works best for you.  If you borrow through the Federal Direct Loan Program, your repayment options may be different and you’ll be working with the college rather than a lending institution.

Keep in mind, many lenders and holders offer repayment incentives to those who make their payments on time. Such incentives include interest rate reductions or cash back. Check with your lender or holder to see if these options are available to you.

Repayment Option Comparison Chart

This chart compares the "monthly payments" and the "estimated interest expenses" of the standard and graduated repayment plans using identical 10-year terms and a 6.8 percent interest rate. Repayment calculators are useful tools that can help you estimate your monthly payments. Remember that changes in interest rates and federal regulations that govern the loan programs can affect your payments.

Standard Repayment Options

This option allows you to make monthly payments of principal and interest, excluding periods of deferment and forbearance. Depending on the amount borrowed, $50 is the minimum monthly payment.

Amount Borrowed	Monthly Payment for 10 Years	Total Amount Repaid
$10,000	$115	$13,810
$15,000	$173	$20,714
$20,000	$230	$27,619

Borrowers choosing this option can start with reduced payments and gradually increase the payments over time.

Amount Borrowed	Monthly Payment for 10 Years	Total Amount Repaid
$10,000	1st stage:   $68 for 2 years 2nd stage:  $89 for 2 years 3rd stage:  $115 for 2 years 4th stage:   $150 for 2 years 5th stage:   $195 for 2 years	$14,812
$15,000	1st stage:   $102 for 2 years 2nd stage:  $133 for 2 years 3rd stage:  $173 for 2 years 4th stage:   $225 for 2 years 5th stage:   $292 for 2 years	$22,220
$20,000	1st stage:   $137 for 2 years 2nd stage:  $177 for 2 years 3rd stage:   $231 for 2 years 4th stage:   $300 for 2 years 5th stage:   $390 for 2 years	$29,626

Income Sensitive Repayment Option

Monthly payments are based upon a percentage of your gross monthly income.

Amount Borrowed	Monthly Gross Income	% of Income	Required Monthly Payment
$10,000	$1,000	4%	$57
$20,000	$2,000	4%	$113

Depending on the amount borrowed, eligible borrowers can lengthen their repayment terms to a maximum of 25 years. Borrowers have a choice of either standard or graduated payment plans.

Early Payoff Option

Paying off your student loan in full carries no prepayment penalties and keeps interest costs to a minimum.

Federal Consolidation Loans allow you to combine any number of existing federal educational loans into a single, more manageable loan.

You can find more information on repaying your student loans at the U. S. Department of Education's Federal Student Aid Student Web Portal.