Federal Student Loan Repayment

  • Direct Loan repayment begins six months after graduation or six months after the your enrollment falls below half time. Once you enter repayment, you must make your payments on time to avoid delinquency and default.

    Below is a brief summary of several repayment plans to choose from, including:

    • Standard Repayment – You pay a fixed amount each month and you have up to 10 years to repay the loan.
    • Extended Repayment – You will pay a fixed amount, or a graduated repayment amount over a period not to exceed 25 years. You must have in excess of $30,000 in loan debt in either the Direct Loan program or the FFEL program to qualify.
    • Graduated Repayment - With this plan, your payment starts out low and increases every two (2) years. The length of repayment is up to 10 years.
    • Income Based Repayment (IBR) – You may be eligible for this plan if you have a high student loan debt relative to your income. Your monthly payments will be 10 or 15 percent of your discretionary income. Payments are recalculated each year based on your income and family size. Any outstanding balance on your loan may be eligible for cancelation if you still have a loan balance after 20 or 25 years.
    • Income Contingent Repayment Plan (ICR) – Direct Loans Only – under this plan, your monthly repayments are recalculated annually based on your adjusted gross income, family size, and the total amount of your Direct Loans. Under the ICR plan you will pay each month the lesser of:
      • The amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income, or
      • 20 percent of your monthly discretionary income
    • Pay as You Earn Plan (PAYE) – To qualify for this plan, you must be a new borrower as of October 1, 2007 and must have received a disbursement of a Direct Loan on or after October 1, 2011. You must have been determined to have a partial financial hardship which is based on student loan debt, income, and family size. Maximum payment amounts are 10 percent of discretionary income. Payments are recalculated every year based on income and family size.
    • Revised Pay as You Earn Repayment Plan (REPAYE) – No “new borrower” requirement. Payment amounts are 10 percent of discretionary income. Payments are recalculated each year based on income and family size.

    For more detail on the available repayment plans, information on consolidating your federal student loans, and to calculate your estimated loan payments, go to https://studentaid.ed.gov/sa/repay-loans.

    For additional information and resources about repaying your federal student loans, go to https://studentaid.ed.gov/sa/sites/default/files/repaying-your-loans.pdf.

    Making all of your loan payments on time is very important. If you find yourself in financial difficulty, contact your student loan servicer to find out what options you may have. Never ignore delinquency or default notices from your servicer.

    Defaulting on your loan has serious consequences and may result in you losing eligibility for deferment, forbearance, repayment plans, and future student aid. Defaulted loans are assigned to a collection agency and the default will be reported to the credit bureaus, damaging your credit history. Your employer may have to garnish your wages and the loan holder can take legal action against you. In some professions, the borrower’s professional license can be revoked for a defaulted student loan. For more information on loan default and how to resolve it, go to https://studentaid.ed.gov/sa/repay-loans/default#consequences.