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What Is The Standard Student Loan Repayment Plan

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Frequently Asked Questions About Ibr

Student Loan Repayment Plans for Federal Student Loans

Who do I contact if I have questions?

If you have any questions about the Income-Based Repayment Plan, contact your loan servicer.

What loan types are eligible?

Loans that are eligible for IBR include:

  • Federal subsidized and unsubsidized Stafford
  • Grad PLUS
  • Supplemental Loan for Students
  • Federally Insured Student Loan
  • Auxiliary Loan for Students
  • Consolidation loans that don’t include parent PLUS loans
  • Perkins Loan, Health Professional Student Loan and Health Education Assistance Loan if included in a FFELP or DL consolidation

What loan types aren’t eligible?

Loans that aren’t eligible for IBR include:

  • Parent PLUS loans
  • Consolidation loans that include a parent PLUS loan
  • Private student loans, state loans and other loans not guaranteed by the federal government
  • Defaulted loans

What’s a partial financial hardship?

A partial financial hardship occurs when the combined yearly amount due on all of your eligible loans exceeds 15 percent of the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size.

FormulaPFH = standard 10-year repayment plan > 15% x

In determining a payment amount, the AGI youll use depends on whether:

What’s the definition of family size?

Your family size includes:

  • You
  • Your spouse
  • Your children if they receive more than 50 percent support from you during that year
  • Other individuals who live with you and receive greater than 50 percent support from you during that year

Support includes:

  • Interest
  • Private Student Loan Repayment

    Private student loans are provided by private financial institutions. Eligibility requirements, terms and rates vary by lender. Private student loans also require a credit check or co-signer with strong credit. Unlike federal loans, private loans arent required to offer borrower protections , so you will have to contact your lender directly for options if youre having trouble paying your loans.

    How Standard Repayment Plans Work

    Unless you choose a different repayment plan, federal student loans typically default to the standard repayment plan.

    The standard repayment plan breaks your student loans up into 120 fixed monthly payments. This means youll have a predictable monthly payment that doesnt change over the life of the loan.

    The following federal student loans qualify for the standard repayment plan:

    • Direct Subsidized Loans
    • FFEL PLUS Loans
    • FFEL Consolidation Loans

    How are payments calculated under the standard repayment plan?

    This process of paying your loans off in equal installments is called amortization and works similarly to how youd pay off an auto or mortgage loan. The minimum payment for most student loans is $50 per month.

    Learn More: Private Student Loan Consolidation

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    What Happens If Youre Having Trouble Paying Your Student Loan

    When something unexpected arises like an unplanned job loss or sudden medical expenses staying on top of your student loans can be difficult. In these situations, missing a payment due date will put your loan account into delinquency until the past-due debt is paid.

    Accounts that are delinquent by 90 days or more are reported to the three credit bureaus, which adversely affects your credit. Borrowers who are experiencing financial hardship for any reason are encouraged to reach out to their student loan servicer or lender.

    If youre having trouble paying for federal student loans, your servicer can explain your options to help make payments more manageable. This can be through either an IDR plan which can result in a monthly payment as low as $0, depending on your income or deferment or forbearance, where you temporarily stop making payments.

    Although private student loans dont offer the same hardship benefits as federal loans, its still important to reach out to your lender to learn about its case-by-case hardship programs. Working with your lender on a manageable repayment plan as early as possible can help you minimize further financial challenges later on.

    The Standard Student Loan Repayment Plan Is The Fastest And Cheapest Federal Repayment Plan Option

    Student Loan Repayment Plan Comparison

    The Standard Repayment Plan is by far the fastest and cheapest repayment option. BUT if you want to make your student loans EVEN CHEAPER, you can refinance with a private lender for a better interest rate. Keep in mind that if you do refinance your student loans, you lose some protections such as falling back on one of the student loan forgiveness plans if you have hard times. But, many of the private lenders offer some protections, such as deferment in the event that you lose your job or otherwise come across hard times.

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    My Loans Were In Default What Happens To Me

    Its still not entirely clear.

    An Education Department spokeswoman said the department is working to finalize plans that would help defaulted borrowers when the pause ends.Policies are under consideration that would allow such borrowers to avoid having their tax refunds or child tax credits garnished.

    Loans fall into default after roughly nine months of nonpayment, though it often takes a year or more for an account to move into collections. At that point, the federal government can take your tax refund, up to 15 percent of your paycheck or part of your Social Security benefits.

    Borrowers generally have a few ways to emerge from default, which they must do before they can enter an income-driven repayment plan. Paying the loans off completely is an option, but usually not feasible. Loan consolidation is another option, or, alternatively borrowers can rehabilitate their loans. That involves making nine out of 10 consecutive reasonable payments, which your loan holder determines using a formula.

    Advocates for student borrowers hope that the Biden administration will provide them with a fresh start by wiping away their defaulted status and making their loans current. That would allow them to avoid the often cumbersome hurdles required to get out of default at a time when loan servicers are likely to be inundated.

    What Will Happen To Interest Rates

    During the pandemic pause on payments, the federal government had also set interest rates at 0% on student loans leading some borrowers to pay down their loans aggressively. But the standard rate is set to resume in February as well. Rates vary by loan, but that information should be available on loan servicers’ websites or on the Department of Education’s financial aid website.

    As payments restart, roughly 1 in 3 borrowers will have a new loan servicer. The Education Department has already started emailing affected borrowers, but people should be sure they’re checking their email or physical mail for updates.

    A move to a new servicer may also mean that borrowers who had automatic payments enabled may need to update their bank information. Those enrolled in income-driven repayment plans will still be eligible with their new servicer.

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    Difference Between Ibr Plan And Standard Repayment Plan

    If you dont sign up for the Income-Based Repayment Plan or one of the other income-driven plans that include the Pay As You Earn , Repay As You Earn and Income-Contingent Plan , you automatically are defaulted into the Standard .Repayment Plan.

    The difference between the Standard Repayment Plan and the Income-Based Repayment plan is substantial. For example, if you start out making $25,000 and have the average student loan debt for the class of 2020 $38,792 you would be making monthly payments of $424 under the Standard Repayment Plan.

    Compare that to paying just $58 a month under the Income-Based Repayment plan.

    Know Your Repayment Options

    Student Loan Repayment Plan Options

    If your monthly payment is too high, you have several options to reduce your monthly payment, sometimes even as low as $0 a month.

    This website has information on the various types of student loan repayment plans. You can also check out Federal Student Aid for in-depth information on student loan repayment. For example, you can choose a replayment plan in five easy steps by going to Get Help Choosing a Student Loan. Or, save time and money by understanding how to repay your federal student loans.

    This is the default plan you’ll repay your loans on. On this plan, your loans will be repaid in the shortest amount of time when payments are made on schedule.

    This plan is well-suited for those who expect their income to go up over time. Payments begin low, and increase every 24 payments.

    Qualified borrowers receive a repayment term of up to 25 years, and the option for a fixed or graduated regular monthly payment amount.

    This FFELP loan-only plan lowers payments for 12 months at a time, and has a loan term of five years before defaulting to Standard or Graduated repayment.

    The four income-driven repayment plans are designed to help make your student loan debt manageable by creating a regular monthly payment amount that fits your income.

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    Here’s How To Choose A Plan Based On Your Income And How Much You Owe

      Student loan borrowers have a variety of options when the time comes to start repaying their loans. Federal student loans offer the most flexibility, while the choices with private student loans are more limited. The best way for you to repay will depend on the kind of loans you have, how much you owe, and where you stand financially after graduation. This guide explores your current choices.

      Federal Vs Private Student Loan Repayment Plans

      The options noted above are generally only available for federal student loans. If you have private student debt, it is possible to find a suitable repayment plan offered by a private financial institution that features lower monthly payment amounts than the lenderâs standard repayment expectations. The terms of your private loan repayment are detailed in your lending agreement. You should contact your private lending institution to learn about your options, if you canât afford the standard repayment terms you agreed to when you took out your private loan.

      You can also refinance your existing private student loan if you meet specific lender requirements. By changing your payment plans, you may be able to save money and pay off your student loan debt at lower interest rates than those offered by your original lender.

      Contact your loan servicer to discuss options if you are having trouble making your monthly payments. Keep in mind that not all loans are eligible for every repayment plan but push them to make sure they tell you about all repayment plans for which your loans are eligible.

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      Start Repaying 6 Months After Leaving School

      After finishing school, there is a 6-month non-repayment period. No interest accrues on your loan during this time. When this period is over you have to start making payments on your Canada Student Loan. Temporary COVID-19 relief

      Contact your province for information on interest charges to your provincial loan.

      The 6-month non-repayment period starts after you:

      • finish your final school term
      • reduce from full-time to part-time studies
      • leave school or take time off school

      If you need to take leave from your studies, you might qualify for Medical or Parental Leave.

      Refinancing Or Consolidating Your Student Loans Could Help You In The Long Run

      22+ Payment Plan Templates

      Outside of various repayment plans, there are two other options that might help if youre struggling with your student loans:

      • Federal student loan consolidation: If you have multiple federal student loans, student loan consolidation could help you with repayment by combining your monthly payments into one. With a Direct Consolidation Loan, you could extend your repayment term up to 30 years, which will lower your monthly payment but remember that an extended term means paying more interest in the long run.
      • Student loan refinancing: Another option is to refinance your student loans into a single private student loan. With student loan refinancing, you might be able to get a lower interest rate or lower monthly payment, depending on your credit. However, keep in mind that if you refinance your federal student loans, youll permanently lose access to federal benefits, such as income-driven repayment.

      If you decide to refinance your student loans, be sure to shop around and consider multiple lenders to find the right loan for you. You can do this easily with Credible all you have to do is fill out a single form and you can see your rates in two minutes.

      Find out if refinancing is right for you

      • Compare actual rates, not ballpark estimates Unlock rates from multiple lenders in about 2 minutes
      • Wont impact credit score Checking rates on Credible wont impact your credit score
      • Data privacy We dont sell your information, so you wont get calls or emails from multiple lenders

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      This Is How Much You Could Pay On A Standard Repayment Plan

      Under the standard repayment plan, your payment will generally be around or a little above 1% of your student loan balance.

      For example, if you have a $10,000 balance, your monthly payment would be around $100. With a $20,000 balance, you would pay around $200 per month, and so on.

      Borrowers who graduate with a bachelors degree leave school with an average student loan debt of $28,500. If that balance was made up of qualifying federal student loans, that would lead to an average monthly payment of about $285 per month on the standard repayment plan. Over 10 years, that would add up to about $34,200 in total payments.

      Here are some more examples based on federal student loan interest rates for the 2019-2020 school year:

      Standard Repayment Plan: 10 Years Of Student Loan Payments

      The federal standard repayment plan gives you a fixed monthly student loan payment over 10 years. But you also have other options, such as income-driven repayment.

      Eric RosenbergUpdated July 30, 2021

      Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

      Graduating from college means youre done with tests and homework but it also starts the timer for repaying your student loans.

      Your federal student loans will automatically default to the standard repayment plan though there are other repayment plans you can choose. Under the standard repayment plan, youll have fixed monthly payments spread out over a 10-year period.

      Heres what you need to know about the standard repayment plan:

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      Private Student Loan Repayment Options

      Private student loans typically offer fewer choices for borrowers. These include:

      • Immediate repayment: Principal and interest payments begin as soon as your loan is disbursed.
      • Interest-only payments: You make interest-only payments while in school, then begin principal and interest payments once you graduate or drop below half-time enrollment.
      • Fixed payments: You pay a low fixed amount while in school, then begin making larger, regular payments once you leave school or drop below half-time enrollment status.
      • Full deferment: You pay nothing while enrolled in school and begin making interest and principal payments within a set time frame after you leave school.

      Depending on your lender, you may be eligible for a deferment or forbearance period if you’re not able to keep up with your regular loan payments. But this typically requires a financial hardship and it isn’t offered by every lender.

      If you have private student loans, it’s important to do the math so you know what the various repayment options will cost you in interest over the life of the loan. You might also consider refinancing your private loans if that would get you a lower interest rate. This can save you money on interest during the repayment term. Refinancing a student loan typically involves a credit check, so if you don’t have a solid yet, you may need a cosigner to qualify. Finally, if you’re struggling to manage your monthly payments, contact your lender as soon as you can and see what can be worked out.

      Federal Student Loan Consolidation

      What Are Your Federal Student Loan Repayment Options?

      A Direct Consolidation Loan allows you to combine all of your existing federal student loans into one loan with a single monthly payment. Consolidation can reduce your monthly payments by as much as 50% by increasing the term of the loan. This means you will pay more interest over the life of the loan.

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      How The Student Loan Payment Restart Is Going To Work

      The student loan machinery is cranking back to life.

      After a nearly two-year timeout, almost 27 million borrowers with federal student loans will be expected to restart their payments in February.

      Those loans have essentially been frozen in time since March 2020 because of the pandemic. Most federal borrowers have not had to pay a bill, their loans stopped accruing interest and those in default received a break from collections.

      The upheaval of the past two years may mean your personal circumstances and financial life look entirely different today. If you are anxious about making payments again, you have plenty of options but a limited window to thoroughly evaluate them.

      Here is what you need to know about the restart and the payment plans that might help you.

      Whats the first thing I need to do?

      Make sure your student loan servicer the entity hired by the government to collect and manage your payments can find you. Go to your servicers website and verify that it has your latest contact details: email address, mailing address and phone number.

      Not sure who your servicer is? Go to and locate your account dashboard and scroll down to the My Loan Servicers section. You can also call the Federal Student Aid Information Center at 1-800-433-3243.

      When will my payments restart? And how?

      I cant afford my loan payment. What are my options?

      Repayment plans calculated over set periods of time: These include standard , graduated , and extended repayment plans.

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