Loan Repayment Plans

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There are several possible repayment plans to pay off your loans.  What do they all mean?

  • Standard Repayment Plan: Payments are a fixed amount of at least $50 per month for 10 years. You’ll pay less interest for your loan over time under this plan than you might for some of the other plans.
  • Graduated Repayment Plan: Payments are lower at first and then increase usually every two years. You’ll pay more for your loan over time than under the standard 10-year repayment plan.
  • Extended Repayment Plan: Payments may be fixed or graduated and the repayment period is up to 25 years. Monthly payments are lower than through a 10-year standard plan.
  • Income-Based Repayment Plan: Your maximum monthly payments will be 15 percent of your discretionary income, which is the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence.  The income-based repayment plan can stretch for as long as 25 years.
  • Pay-as-You-Earn Repayment Plan: Your maximum monthly payments will be 10 percent of discretionary income.
  • Income-Contingent Repayment Plan: Payments are calculated each year and are based on your adjusted gross income, family size, and the total amount of your Direct Loans.
  • Income-Sensitive Repayment Plan: Your monthly payment is based on annual income. Your payments change as your income changes.

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