Federal student loan Repayment
Understand the steps to repay student loans
Federal Direct Stafford Loans offer you flexible repayment terms.
You won't be required to begin repaying your Stafford Loan until six months after you graduate or drop below half-time student status. However, for unsubsidized Stafford Loans, interest will begin accruing right away.
With Direct Stafford Loans, you’ll have a choice of student loan repayment plans. They include:
- Standard repayment
- Extended repayment
- Graduated repayment
- Income contingent repayment
- Income-based repayment
Standard repayment plan
You are required to pay a fixed amount each month until the loans are paid in full, with up to 10 years to repay. Monthly payments must be at least $50.
Extended repayment plan
You’ll pay a fixed, annual, or graduated repayment amount over a period not exceeding 25 years. The fixed monthly payment is lower than under the standard student loan repayment plan, but the total that is repaid is higher, because interest accumulates for a longer time.
Graduated repayment plan
You’ll make lower payments at first—covering at least the interest that accrues between payment——but your payments are increased every 2 years, during which time your income will presumably be increasing. You’ll pay your student loan back within 10 years.
Income contingent repayment
This plan gives financial flexibility taking into consideration each individual’s financial obligations and income. Each year, monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct Loans. This repayment option is not available for Direct PLUS loans.
Income-based repayment (IBR)
With this more affordable Stafford plan, monthly payments are capped at an amount based on your income and the size of your family.
You are eligible for this plan if the monthly student loan repayment amount under IBR will be less than the monthly amount under a standard 10-year repayment plan. Under this plan, if you pay for 25 years you may be eligible to have your loan balances cancelled.
If you work in public service for 10 years, you may also be eligible for loan cancellation.