Repayment FAQ

While most loan servicers will notify you of the date your first payment is due, it’s your responsibility to make payments on time. Let’s answer some important questions, explore your repayment options, and get off to a good start.

Although your loan servicer will generally notify you of the date your first payment will be due, you can get in touch with the lender through the contact information on your Master Promissory Note. You should do this if you think it’s past time you heard from your loan holder, and especially if you’ve recently changed your address.

Repayment requirements differ depending on the type of loan in question.

Direct Subsidized and Direct Unsubsidized: You don’t have to begin repaying Direct Subsidized and Direct Unsubsidized federal student loans until after you leave college or drop below half-time enrollment. Once either of those things happens, the clock starts on a six-month grace period during which you’re assumed to be getting financially settled. Repayment begins the day after the grace period ends — that’s when interest on the loan begins to accrue. Your first payment is due 60 days after the end of the grace period. By default you’ll go into a Standard Repayment Plan.

Student PLUS: Repayment begins as soon as you receive the final disbursement of the loan. However, your loan will be placed into deferment while you’re enrolled at least half time and during the six months after you leave school, with your first payment due 60 days later.

Parent PLUS: As with Student PLUS loans, repayment begins upon final disbursement of the loan. Generally, your first payment is due within 60 days of the final disbursement, unless you choose to delay making payments while your dependent student is enrolled in school at least half time.

If you don’t act, you’ll begin repaying your loans under the Standard Repayment Plan, but borrowers have other options. The US Department of Education (ED) provides an overview table of federal loan repayment plans, and it offers a Repayment Estimator that can help you figure out which repayment plan is best for you. If you log in with your Federal Student Aid (FSA) ID, this tool will provide a comparison of estimated monthly payment amounts for all federal student loan repayment plans to help you visualize the difference in repayment terms, interest accrued, and total amount paid. Consider all of these factors when choosing a repayment plan that’s right for your particular financial situation, but keep in mind that not all loan types are eligible for all repayment plans. ED has also developed a fact sheet that provides more information about the various income-driven repayment plans.

Here are some key facts about repayment plan options:

Standard Repayment Plan

  • Lowest total interest costs over life of the loan
  • Regular payments of both principal and interest are due monthly, excluding periods of deferment and forbearance
  • Minimum monthly payment is $50 or interest accrued, whichever is larger (payment is based on total loan amount)
  • Ten-year repayment term

For more information, visit the College Loan Calculator on TG’s Adventures In Education website.

Income-Based Repayment (IBR) Plan

  • Available for Stafford, Direct, Grad PLUS, and certain Consolidation loans
  • Parent PLUS loans, Consolidation loans that included a Parent PLUS loan, nonfederal loans, and defaulted loans are not eligible for the IBR plan
  • You must demonstrate a partial financial hardship* to qualify for the IBR plan
  • Monthly payments are based on your adjusted gross income and your family size
  • Repayment term is a maximum of 20 or 25 years depending on when the loans were disbursed
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan, but any outstanding principal and interest still owed after 20 or 25 years of qualifying payments will be forgiven
  • Eligibility must be re-evaluated annually

* The IBR plan has an eligibility requirement that you must meet to qualify for the plan. To qualify, the payment you would be required to make under the IBR plan (based on your income and family size) must be less than what you would pay under the Standard Repayment Plan with a 10-year repayment period.

For more information, visit our Income-Based Repayment page or contact your loan holder or servicer.

Graduated Repayment Plan

  • Monthly payments are reduced at the beginning of the repayment period and gradually increase
  • Ten-year repayment term
  • No single payment will be more than three times greater than any other payment
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan

Income-Contingent Repayment (ICR) Plan

  • Available to Direct (FDLP) borrowers only
  • Monthly payment is adjusted annually, based on the total amount of your Direct loans, your family size, and your adjusted gross income
  • You must reapply annually
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan, but any outstanding principal and interest still owed after 25 years of qualifying payments will be forgiven

Pay As You Earn (PAYE) Repayment Plan

  • Available to certain Direct (FDLP) student loan borrowers only. To qualify:
    • You must have had no outstanding balance on an FDLP or FFELP loan as of October 1, 2007, or had no outstanding balance on an FDLP or FFELP loan when you received a new loan on or after October 1, 2007; and
    • You must have received a disbursement of an FDLP loan on or after October 1, 2011.
  • Parent PLUS loans, Consolidation loans that included a Parent PLUS loan, nonfederal loans, and defaulted loans are not eligible for the PAYE plan
  • You must demonstrate a partial financial hardship* to qualify for the PAYE plan
  • Monthly payment is adjusted annually, based on your family size and your adjusted gross income
  • You must reapply annually
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan, but any outstanding principal and interest still owed after 20 years of qualifying payments will be forgiven

* The PAYE plan has an eligibility requirement you must meet to qualify for the plan. To qualify, the payment you would be required to make under the PAYE plan (based on your income and family size) must be less than what you would pay under the Standard Repayment Plan with a 10-year repayment period.

Revised Pay As You Earn (REPAYE) Repayment Plan

  • Available to Direct (FDLP) student loan borrowers only, regardless of when they borrowed
  • Parent PLUS loans, Consolidation loans that included a Parent PLUS loan, nonfederal loans, and defaulted loans are not eligible for the REPAYE plan
  • Monthly payment is adjusted annually, based on your family size and your adjusted gross income
  • You must reapply annually
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan, but any outstanding principal and interest still owed after 20 or 25 years of qualifying payments will be forgiven

Income-Sensitive Repayment Plan

  • Available to Federal Family Education Loan Program (FFELP) borrowers only
  • Monthly payment varies according to gross monthly income
  • Payment includes at least monthly accruing interest
  • You must reapply annually
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan

Extended Repayment Plan

  • Lengthens repayment term up to 25 years
  • You must have a minimum loan balance of $30,000 to qualify
  • Payments can be either fixed or graduated
  • Total amount paid in interest over the new repayment plan will be greater than the total interest paid over a Standard Repayment Plan

Two federal loan forgiveness programs are available to individuals who enter public service careers. Under the Teacher Loan Forgiveness Program (TLFP), Federal Stafford and Federal Direct loan borrowers who teach for five consecutive, complete years at an eligible school may qualify to have some of their loan balances forgiven. Through the Public Service Loan Forgiveness Program (PSLFP), borrowers may qualify for forgiveness of the remaining balance due on their eligible Federal Direct loans after they have made 120 monthly payments on those loans under an eligible repayment plan while employed full time in eligible public service occupations.

The federal student aid programs provide for discharge of certain types of federal student loans if you become totally and permanently disabled.

By consolidating your loans you might be able to reduce your monthly payments in the short term, though you may wind up paying more in total over your repayment period. Your loan holder or servicer can help you determine whether you’re eligible and whether loan consolidation is the best option for you.

Deferment is a tool available to borrowers to help them meet their loan repayment obligations. Once the repayment period has begun, you’re entitled to defer your student loan payments if you meet certain criteria. Through deferment, you can postpone your scheduled student loan payments for various reasons, such as unemployment, economic hardship, and school enrollment. Your lender or servicer determines whether you meet the requirements for a deferment based on documentation that you submit.

During a deferment period, you’re not responsible for paying the interest that accrues on a subsidized Stafford or Direct loan, or any portion of a Consolidation loan eligible for federal interest benefits. However, you’re responsible for paying the interest that accrues on unsubsidized Stafford, Direct, PLUS, and Grad PLUS loans, as well as unsubsidized portions of a Consolidation loan. If you fail to make required interest payments during a deferment period, the loan holder or servicer may capitalize the unpaid accrued interest. To ensure prompt processing of your deferment, please complete a deferment application and forward directly to your loan holder or servicer.

Forbearance is a period of time during which a lender permits a borrower to temporarily postpone making payments or make reduced payments. Medical or financial problems that don’t meet the requirements for a deferment may qualify you for forbearance.

During a forbearance period, you’re responsible for paying the interest that accrues on any loan, including a subsidized Stafford or Direct loan. If you fail to make required interest payments during a forbearance period, the lender or servicer may capitalize the unpaid accrued interest.

A loan holder or servicer may grant a general forbearance to assist you in fulfilling the repayment obligations of the loan and help prevent default. The loan holder or servicer must approve the forbearance request before your payments can be suspended.