Updated: Jul 22, 2025

Student loan debt can feel overwhelming, especially when you’re just trying to stay on top of monthly bills. Whether you’re in repayment, about to graduate, or in default, understanding your options is the first step toward getting back in control and avoiding costly mistakes.

Why Repayment Planning Matters

Student loans often come with large balances and confusing terms. If you don’t choose the right plan—or don’t understand how the system works—you could end up paying thousands more in interest, missing out on forgiveness programs, or falling into default. But it doesn’t have to be that way.

The good news is that federal student loans come with a wide range of repayment options. These plans are designed to adjust to your income, your family size, and your career goals. The challenge is figuring out which one is right for you—and how to apply without getting lost in the paperwork.

Know What Type of Loan You Have

Before you can choose a repayment plan, you need to know what kind of loan you’re dealing with. Most federal student loans fall into one of a few categories: Direct Subsidized Loans, Direct Unsubsidized Loans, PLUS Loans (for parents or grad students), and Federal Perkins Loans (no longer issued but still active for many borrowers).

You can check what loans you have by logging into your account at studentaid.gov. There, you’ll see your total balance, loan types, interest rates, and servicer information. If you have private loans from a bank or credit union, they won’t show up on that site—you’ll need to contact your lender directly.

This step matters because repayment and forgiveness options are only available for federal loans. Private loans typically don’t qualify for income-driven repayment or federal deferment.

Standard Repayment Plan

This is the default plan for most federal loan borrowers. It gives you 10 years to repay your loan in equal monthly payments. It’s a good choice if you can afford the monthly amount and want to pay the least amount of interest over time.

The downside is that the monthly payment can be high—especially if you borrowed a large amount. If you’re struggling to afford the standard payment, there are more flexible options.

Graduated Repayment Plan

This plan also lasts for 10 years, but payments start low and increase every two years. It’s designed for people who expect their income to grow steadily over time.

Graduated repayment is still a fixed plan, meaning it won’t adjust to your actual income, and it won’t qualify you for forgiveness programs. But it can be a good fit for early-career professionals who can’t afford full payments right away.

Extended Repayment Plan

This plan stretches your loan over 25 years and offers either fixed or graduated payments. It’s available to borrowers with more than $30,000 in Direct Loans or FFEL Loans.

It lowers your monthly payment by spreading it out, but you’ll pay significantly more in interest over the life of the loan. Like standard and graduated plans, it’s not based on your income and doesn’t qualify for income-driven forgiveness.

Income-Driven Repayment Plans

These plans adjust your payment based on your income and family size. If you’re earning a low or moderate income, they can significantly reduce your monthly bill—and in some cases, your payment could be as low as $0.

There are four main types:

SAVE (Saving on a Valuable Education)
This is the newest and most generous income-driven plan, replacing the REPAYE plan. Under SAVE, your monthly payment is based on 10% of your discretionary income—or 5% for undergraduate-only loans—and you’ll never pay more than what you’d owe on a standard plan. It also prevents interest from growing faster than your payment, which helps stop balances from ballooning.

PAYE (Pay As You Earn)
This plan caps your monthly payment at 10% of your discretionary income and forgives the remaining balance after 20 years. It’s available only to borrowers who took out loans after October 2007 and received disbursements after October 2011.

IBR (Income-Based Repayment)
This plan is available to more borrowers than PAYE and comes in two versions. If your loans were taken out before July 2014, you’ll pay 15% of your discretionary income for 25 years. If after, you’ll pay 10% for 20 years.

ICR (Income-Contingent Repayment)
This is the least generous plan, with payments based on 20% of your income and forgiveness after 25 years. It’s the only income-driven plan that allows Parent PLUS loans—but only if they’re consolidated first.

To apply for any of these, go to studentaid.gov/idr and complete the application. You can use the site’s loan simulator tool to compare plans and see what your monthly payment will be under each.

Public Service Loan Forgiveness (PSLF)

If you work full-time for a qualifying employer—like a government agency, public school, or nonprofit—you may be eligible for Public Service Loan Forgiveness. This program forgives your remaining loan balance after 120 qualifying monthly payments under an income-driven plan.

To qualify, you must:

• Work for a qualifying employer

• Be on a qualifying repayment plan (typically an IDR plan)

• Make 120 on-time payments while working full-time

You can track your progress and submit an annual employment certification through studentaid.gov/pslf. Recent changes have made it easier to qualify, so if you’ve been denied in the past, it’s worth reviewing your status again.

Deferment and Forbearance

If you’re in a short-term financial crisis—like job loss or medical issues—you may qualify for a pause on your payments through deferment or forbearance. These options temporarily stop or reduce your monthly bill, but interest usually continues to accrue.

Use these only as a last resort. Long periods of forbearance can increase your balance significantly and delay your progress toward forgiveness or full repayment. If your situation is likely to last more than a couple of months, an income-driven repayment plan is often a better option.

Getting Out of Default

If you’ve missed payments and your loans have gone into default, don’t panic—there are still ways to recover. You may be able to rehabilitate the loan by making nine on-time monthly payments or consolidate it into a new loan and enroll in a repayment plan.

Rehabilitation wipes the default from your credit report once it’s complete. Consolidation helps you get out of default faster but doesn’t remove the negative mark.

You can contact the Default Resolution Group at 1-800-621-3115 or visit myeddebt.ed.gov to explore your options.

Watch Out for Scams

If someone contacts you offering fast forgiveness or claims to work “with the Department of Education” but asks for payment up front—walk away. Legitimate help with student loans is free, and the only official site you should use is studentaid.gov.

Scammers often pose as loan relief companies and charge hundreds of dollars for services you can get for free. Don’t give out your Social Security number or FSA login to anyone who contacts you unsolicited.

Stay Organized and Revisit Your Plan

Your financial situation may change, and your repayment plan should change with it. Review your income, expenses, and loan terms at least once a year. You can switch plans if you find a better fit, and income-driven plans require annual recertification anyway.

If you’re using a forgiveness program, track your payments and employer certifications carefully. If you move, change jobs, or change servicers, always keep copies of important documents.

And if you need help, reach out to your loan servicer or a certified nonprofit credit counselor. Don’t guess your way through student loans—ask questions and stay informed.

Final Thoughts

Student loan repayment doesn’t have to be confusing or unaffordable. With a clear understanding of your loan type, the available plans, and forgiveness options, you can make smart choices that support your long-term financial goals. Whether you’re just starting repayment or trying to fix a default, there’s a path forward—and plenty of resources to guide the way.