Repayment Schedule

There are a number of repayment schedule options available to you. With the help of your lender, you can set up the payment plan that best fits your situation. These options include:
NOTE: The faster you pay down the principal balance on your student loan(s) the less interest you pay over the life of the loan(s). While lower payments may be helpful and prevent default, we highly recommend increasing your payment amount as soon as possible. Even paying $5 to $10 more per month can help considerably! Click the chart to the right for more information!


Standard/Level Repayment Schedule (maximum 10-year repayment term)

A standard repayment schedule is the most common for student loans. This payment schedule is also the one that will cost you the least amount of interest over the life of your loan(s). With this schedule your monthly payment amount stays the same each month throughout your 10-year repayment term (120 payments). Unless you request otherwise, your lender will automatically set your loans up on a level repayment schedule.

Use a student loan repayment calculator to estimate your monthly standard payment.


Graduated Repayment Schedule (maximum 10-year repayment term)

A graduated repayment schedule begins with low monthly payments (usually interest only) and gradually increases your payment throughout the repayment term. Depending on your lender, your monthly payment amount could change every 1, 2, or 3 years.


Income Sensitive Repayment (up to 15-year repayment term)

With income sensitive repayment (commonly referred to as interest only) your monthly payment can be lowered based on your income. The lowest payment amount possible under this plan is the amount of interest that accrues on your loan(s) each month. You must reapply for this plan each year. You can request an income sensitive plan for a maximum of 5 years. These 5 years are not included in your 10-year repayment term so utilizing this plan could extend your term. (Example: If you use 1 year of income sensitive repayment, you will have 11 years of total repayment).


Income Based Repayment (IBR) (up to 25-year repayment term)

If you qualify for this new payment plan, your monthly payment is set at a maximum of 15% of the difference between your annual adjusted gross income (AGI) and 150% of the poverty levels for your family size.

Monthly payment amounts can be less than the monthly interest accrual. If the monthly payment amount is not enough to cover the interest accrual, the Department of Education will pay the remaining interest for the first three years on your subsidized Stafford loans only.

To initially qualify for the IBR plan, you must have a partial financial hardship. You are considered to have a partial financial hardship if the annual amount due on all of your eligible loans exceeds 15% of the difference between your AGI as shown on your most recent federal income tax return and 150% of the poverty line amount for your family size. The annual amount due is calculated as of the time you initially entered repayment using a standard repayment plan with a 10-year repayment period.

Eligibility for the IBR must be re-established each year. When applying for the IBR you may be asked to complete an authorization form (4506-T) to allow your lender to verify your AGI with the IRS or supply a copy of your latest federal tax return form.

If your AGI is not available from the IRS or does not reasonably reflect your current income (i.e. you’ve had a significant change in your income), you may be able to provide alternate documentation of your income that will be used to determine your IBR plan eligibility and payment amount.

If you are married filing jointly your spouse’s income will be included in determining your eligibility and IBR payment amount.

After 25 years and 300 qualifying payments, any balance remaining on your loans will be forgiven (amount forgiven may be taxable).

Defaulted and Parent PLUS loans are not eligible for the IBR plan. Consolidation loans that include Parent PLUS loans are also ineligible for IBR.

Use an IBR calculator to determine your eligibility for IBR and estimate your monthly payment amount.

To apply for IBR you must complete an Income-Based Repayment Plan Application.


Extended Repayment (up to 25-year repayment term)

If your oldest outstanding loan was disbursed after October 7, 1998 and you have a principal balance of at least $30,000 you may request that your lender extend your repayment term out to 25 years (300 payments). With an extended plan you may request either a standard (level) or graduated payment amount.

Use a student loan repayment calculator to estimate your monthly payment under an extended level payment plan.


Consolidation (up to 30-year repayment term)

Do you have loans with more than one lender? Do you have a large student loan balance? If you answered yes to either one of these questions, you may want to consider consolidating your federal student loans. With consolidation all of your individual federal student loans are paid off and one new loan is created for you. Depending on your total balance your repayment term may also be extended lowering your monthly payment amount. Learn more about loan conslidation.

Remember lower payments are a great way to prevent default, but they may cost you more over the life of the loan. It is a good idea to lower your monthly payment to a manageable amount but as soon as you can afford to make bigger payments, do so!