Successful Loan Repayment

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Student loan borrowers start repaying their loan(s) after their grace period ends, unless they qualify for a deferment or forbearance. The monthly payment amount is determined by the total amount borrowed and the repayment option chosen.

More information is available in our "Are You Looking for Money?" publication, or by contacting the financial aid office at the school you plan to attend. You can also use our Loan Calculator to get your customized monthly payment estimate.

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Transition to Repayment
Repayment Options
- Income-Based Repayment (IBR)
Federal Consolidation Loans

Transition to Repayment

Direct Stafford Loans
Repayment of Direct Stafford loans begins six months after you graduate or drop below half-time enrollment. This six-month period, called a grace period, is designed to help you prepare for repayment.

Direct PLUS Loans
For PLUS loan borrowers, the first payment is due within 60 days after full disbursement unless the borrower qualifies for a deferment.

Parent PLUS loan borrowers can request to defer their loan:

When the parent borrower is enrolled at least half-time at an eligible school.
When the student for whom the parent acquired the loan is enrolled at least half-time at an eligible school.
During the six-month period immediately following the date on which the
- borrower ceased to be enrolled at least half-time at an eligible school.
- student for whom the parent acquired the loan ceased to be enrolled at least half-time at an eligible school.

Parent borrowers who are interested in a deferment must contact the loan holder about the eligibility requirements. Parent PLUS loans disbursed before July 1, 2008 have different eligibility requirements.

Graduate and professional student PLUS loan borrowers can request to defer their loan:

When the borrower is enrolled at least half-time at an eligible school.
During the six-month period immediately following the date on which the borrower ceased to be enrolled at least half-time at an eligible school.

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Repayment options

There are several repayment options for you to consider. If you're interested in any of these options, contact your loan holder for more information.

Standard Repayment

This plan is the most financially effective way to repay your student loan while minimizing interest costs.
Payments are due monthly (excluding periods of deferment or forbearance), even if you don't receive any notifications or statements.
This schedule has a 10-year repayment term.

Graduated Repayment

This plan is ideal if you have limited income now, but expect to earn more in the future. However, total interest costs are typically higher over the life of the loan.
Monthly payments begin low, then increase gradually over time.
Payments must cover accruing interest.
This schedule has a 10-year repayment term.

Extended Repayment

This plan is only available to borrowers who have loans totaling more than $30,000.
You can choose either the standard or graduated repayment option (both are described above).
The repayment term can be up to 25 years.

Income-Sensitive Repayment

This plan is only available for FFELP loans.
This plan is appropriate if your income fluctuates, you have substantial loan balances or you need smaller monthly payments to meet other financial obligations. However, total interest costs are typically higher over the life of the loan.
Monthly payments are adjusted based on gross monthly income.
Payments must cover accruing interest.
This plan must be renewed each year.

Income-Contingent Repayment

This plan is only available for Direct loans from the U.S. Department of Education.
Monthly payments are adjusted based on annual income, family size and the total amount of loan(s) and may change as income changes.
Any outstanding loan balance after 25 years of repayment is forgiven. The amount forgiven may be taxable as income.

Income-Based Repayment
The Income-Based Repayment (IBR) plan is designed to make loan repayment easier for borrowers with lower salaries. The plan:

Caps the monthly payments at a percentage of a borrower's discretionary income and factors in family size. The total amount borrowed is not considered in determining your IBR payment amount during any period when you have a “partial financial hardship.”
Adjusts the monthly payment amount each year based on changes in annual income and family size.
Sets a maximum repayment period of 25 years. After 25 years, any remaining debt is forgiven.

More information and the necessary forms are available on our Income-Based Repayment plan page. You can also access the Student Aid on the Web IBR page to learn more and use their calculator to estimate your payments. « Back

Federal Consolidation Loans

Consolidation allows you to combine all your federal education loans into a single, more manageable loan, make one monthly payment to a single loan holder and extend your repayment period to a maximum of up to 30 years depending on the consolidated loan amount.

To be eligible for a Federal Consolidation loan, you must certify you don't have another application for a consolidation loan pending with another lender and either:

Be enrolled in school less than half time or no longer enrolled.
Be in your grace period.
Be in repayment.

During the period of July 1, 2010 to June 30, 2011, only borrowers who have loans from two or more of the following categories can receive a Direct Consolidation loan while still enrolled:

FFEL Program loans that are held by and eligible lender.
FFEL Program loans that have been purchased by the Department of Education.
Direct Loan Program loans.

If you choose to consolidate your loans, you’ll still have the option to choose from the standard, graduated, income-sensitive, income-based or extended (if applicable) repayment schedules.

Loan consolidation isn't the best option for everyone. If you consolidate while still in school, you’ll forfeit your 6-month grace period, and your first loan payment will be due within 45 days after you:

Graduate.
Decrease your hours to less-than-half-time status.
Withdraw from school.

Learn more about loan consolidation on the U.S. Department of Education website or by calling 800.557.7392 (toll-free).
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Successful Loan Repayment

Transition to Repayment

Repayment options

Federal Consolidation Loans

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