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One of the benefits of a student loan is the variety of repayment options available. Most student loan payments are set up on a standard repayment plan with monthly payments that remain the same throughout the repayment period. However, other plans are available that may make your payments more manageable.
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 | Graduated Repayment Option
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 |
Extended Repayment Plan Option
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.
Loan Consolidation Option
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.
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