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Get more than repayment options.
Get a game plan.

Borrowing to pay for college is the easy part. Repaying the debt is much harder. It involves more than just finding the money for repayment and knowing which options are best for you. Your current budget and changes in your future earnings and responsibilities also need to be considered. This is why it helps to engage an expert, who can guide you through the complexity of the various repayment plans, explain your options under each and take into account the full context of your financial circumstances. NFCC® Certified Credit Counselors are as fluent in the language of student financing as they are in all other areas of personal finance and debt management. When you engage one of these experts, your one-on-one counseling session will not only address your student debt but leave you with a comprehensive plan for managing all of your financial responsibilities.

Repayment program overview for borrowers under the Federal Family Education Loan Program or William D. Ford Direct Loan Program.

Type of Repayment Plan
Eligible Loans
Payment Specifics
Comments
Standard Repayment
  • Fixed amount/$50 minimum
  • Up to 10 years

Results in the least amount of interest paid over the life of the loan.

Graduated Repayment
  • Start low and increase roughly every 2 years
  • Up to 10 years

More expensive than the Standard Repayment Plan but more affordable for those just starting their careers.

Extended Repayment
  • Payments fixed or graduated
  • Up to 25 years

May result in lower payments if you are a:

  • Direct Loan borrower with more than $30,000 in outstanding Direct Loans.
  • FFEL borrower with more than $30,000 in outstanding FFEL Program loans.
  • Need to have borrowed on or after 10/07/1998.
Income-Based Repayment
  • Maximum payments will be 10% of discretionary income or the difference between your adjusted gross income and 150% of the poverty level (based on your state and family size)
  • Payments will change with your income
  • Up to 20 year for students who borrowed for undergraduate study and 25 years for student who borrowed for graduate study
  • REPAYE does not allow borrowers to cap their payments at the “standard” payment plan amounts if that amount is less than 10% of discretionary income

Requires a partial financial hardship.

Monthly payments will be lower than standard 10-year plan, but overall costs will be higher.

If the loan is not repaid after 25 years of qualifying monthly repayments, any outstanding balance on the loan will be forgiven.

Income taxes may be due on any forgiven balances.

Revised Pay As You Earn
  • Maximum payments will be 10% of discretionary income or the difference between your adjusted gross income and 150% of the poverty level (based on your state and family size)
  • Payments will change with your income
  • Up to 20 years for students who borrowed for undergraduate study and 25 years for student who borrowed for graduate study
  • REPAYE does not allow borrowers to cap their payments at the “standard” payment plan amounts if that amount is less than 10% of discretionary income

Any Direct Federal Loan is eligible

No financial hardship required to enter the REPAYE plan

REPAYE provides more generous interest accrual and capitalization terms than IBR

If the loan is not repaid after 20 years of qualifying monthly repayments, any outstanding balance on the loan will be forgiven

Married borrowers who file separately could face higher payments under REPAYE because their spouses’ incomes are included in calculating their income and REPAYE payments

Income taxes may be due on any forgiven balances

Income-Contingent Repayment
  • Payments calculated annually based on your adjusted gross income, family size and total Direct Loan balance
  • Payments will change with your income
  • Up to 25 years

If the loan is not repaid after 25 years of qualifying monthly repayments, any outstanding balance on the loan will be
forgiven.

Income taxes may be due on any forgiven balances.

Income-Sensitive Repayment
  • Monthly payment based on annual income
  • Payments will change with your income
  • Up to 10 years

Formula is not standard, so amount of each payment will vary with lender.

Repayment options for other loan programs.

Each of these loan programs has its own set of rules and options regarding repayment. Before making a selection, it can help to talk to an NFCC Certified Consumer Credit Counselor to understand how it might impact your finances or that of your family’s over time.

Federal Perkins Loans.

Perkins Loans have fewer repayment options; however, you can postpone payments through Perkins-specific deferments, among other options.

  • Repayment for Perkins Loans lasts 10 years.
  • Your school determines your payment amount—the minimum payment is $40—and the frequency of your payments (monthly, quarterly, bimonthly).
  • You can apply for graduated repayment, but the U.S. Department of Education must approve it.
  • You may be able to work with your school to establish a different repayment plan. Contact your school to find out more.

Stafford and Grad PLUS.

There are six repayment schedules available for Stafford and Grad PLUS loan borrowers:

  • The normal schedule—and the one in which you pay the least interest overall—is standard repayment.
  • If you need to lower your monthly payments, you can do so by stretching your repayment period with extended repayment.
  • You can also pay less now without extending your repayment period by using graduated repayment.
  • If you don’t make enough money to cover your payments, you may be eligible for income-contingent repayment (for Direct Loan Program borrowers) or income-sensitive repayment (for Federal Family Education Loan Program borrowers).
  • If you have high student loan debt and/or a low income, the right plan for you may be income-based repayment.
  • Combine all your loans into a single loan—with a single payment—by consolidating your loan.

Parent PLUS.

Parent PLUS loan borrowers can choose from any of the plans above, except income-based repayment or income-contingent repayment. However, you can become eligible for income-contingent repayment by consolidating your parent PLUS loans.

Institutional, private and state loans.

Repayment options vary for institutional, private and state loans.

  • Institutional loans: Contact your school to learn about your repayment options.
  • Private loans: Contact your lender to find out your repayment options.
  • State loans: Contact your servicer or your state’s office of education to find out your repayment options.

If you do not know if you have institutional, private or state loans, review your free annual credit report.

Forgiveness, deferment and forbearance.

Given certain circumstances, including illness or job loss, you may be able to gain permission to defer or temporarily postpone payments. In other cases, such as employment in specified public service jobs, your debt may actually be forgiven.

Who is the NFCC?

Founded in 1951, the National Foundation for Credit Counseling® (NFCC®) is the nation's first and largest nonprofit dedicated to improving people's financial well-being.

NFCC members help millions of consumers like you through community-based offices located in all 50 states and Puerto Rico. Each NFCC member agency has earned our seal by adhering to high standards and ethical practices designed to help you achieve financial stability.

Funding for operations and services comes from an ever-changing combination of federal, state and local government grants, as well as donations from financial industry participants and private donors.

For more on the NFCC, visit www.NFCC.org

Thank you to our funders.

The Sharpen Your Financial Focus™ program is an initiative of the National Foundation for Credit Counseling (NFCC) in partnership with a broad cross-section of supporters. Together, we are committed to increasing the financial well-being of Americans. This initiative is partially funded by Bank of America, Chase, Synchrony Financial, Wells Fargo and other major financial institutions. We thank all funders and partners who make this program possible. For more information, visit www.SharpenToday.org.

National Foundation for Credit Counseling
2000 M Street, NW
Suite 505
Washington, DC 20036

For NFCC Media Inquiries:
Bruce McClary
Vice President of Communications
Email: bmcclary@nfcc.org