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Best Student Loan Repayment Plans in 2024
By
Will Geiger
Will Geiger is the co-founder of Scholarships360 and has a decade of experience in college admissions and financial aid. He is a former Senior Assistant Director of Admissions at Kenyon College where he personally reviewed 10,000 admissions applications and essays. Will also managed the Kenyon College merit scholarship program and served on the financial aid appeals committee. He has also worked as an Associate Director of College Counseling at a high school in New Haven, Connecticut. Will earned his master’s in education from the University of Pennsylvania and received his undergraduate degree in history from Wake Forest University.
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Caitlyn Cole is a college access professional with a decade of experience in non-profit program and project management for college readiness and access organizations.
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Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.
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There are many student loan repayment plans for federal student loans and people sometimes don’t know where to start! The best plan for you will depend on your financial situation, career, and goals.
Here are some of our top picks for the best loan repayment plans according to a few different situations:
- Students who want to pay off their loans ASAP: Standard or Graduated Repayment
- Students who want to lower their loan payments: SAVE (formerly REPAYE), PAYE, Income-based Repayment, or Income-Contingent Repayment
- Students who took out Federal Family Education Loans: Income-Sensitive Repayment Plan
- Students who will qualify for student loan forgiveness: SAVE (formerly REPAYE), PAYE, Income-based Repayment, or Income-Contingent Repayment
Below we’ll go into more depth about the different types of student loan repayment plans, the general terms, eligibility, and some more details about who each repayment plan is best for including private student loan repayment. We have organized the plans below into two main categories of Fixed Repayment Plans and Income-Driven Repayment (IDR) plans.
As the names imply, fixed plans have a consistent monthly payment and have a predictable length of time for the loans to be paid off while IDR plan payments can change over time contingent on your income and the size of your family. IDR plans require a brief recertification process each year which is automated by the loan servicer. Although it can take longer to pay off loans on IDR plans, repayment amounts can be as low as $0 per month and balances may be forgiven after the repayment term expires.
Types of student loan repayment plans
FIXED REPAYMENT PLANS
Standard repayment
- Eligible loans: Direct Federal Stafford, Direct PLUS loans, all Direct Consolidation loans
- Terms: All borrowers are eligible for Standard Repayment and payments are fixed to be paid off in 10 years.
- Who is standard repayment best for? Students who want to pay back their loans as quickly as possible (and may be willing to pay a higher monthly amount).
Graduated repayment plan
- Eligible loans: Direct Federal Stafford, Direct PLUS loans, all Direct Consolidation loans
- Terms: All borrowers are eligible for Graduated Repayment and payments are lower, but increase about every two years. Borrowers can pay these loans off in 10 years.
- Who is graduated repayment best for? Students who want lower payments in the short-term, but are willing to pay more later on. This is a good option for those who anticipate their income to increase over time.
Extended repayment plan
- Eligible loans: Direct Federal Stafford, Direct PLUS loans, all Direct Consolidation loans
- Terms: Borrowers must have over $30,000 of Direct Loan debt to qualify and will pay off their loans over an extended period of time (between 25 to 30 years)
- Who is extended repayment best for? Extended Repayment makes the most sense if you owe a lot in student loans and want to lower your monthly payment. The downside is that you may wind up paying more interest as the loan is over a longer period of time.
INCOME-DRIVEN REPAYMENT (IDR) PLANS
Saving on a valuable education plan (SAVE) formerly called Revised pay-as-you-earn repayment plan (REPAYE)
- Eligible loans: Direct Federal Stafford, Direct PLUS loans, all Direct Consolidation loans
- Terms: This plan is available to borrowers of any Direct loan and caps monthly payments at 10% of your income. If you haven’t paid your loan off in 20 years, the outstanding balance will be forgiven. This is upped to 25 years if the loans are for graduate school.
- Who is Revised Pay As You Earn best for? This repayment plan is a good fit for people who want to attach their loan amount to their income (this can be helpful for budgeting) and family size. As with other extended repayment, the downside is that students may wind up paying more in interest.
Pay-as-you-earn repayment plan (PAYE)
- Eligible loans: Direct Federal Stafford, Direct PLUS loans, and Direct Consolidation Loans
- Terms: You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. If you are married, you can choose to file your taxes separately and your spouse’s earnings do not count (unlike Revised Pay as you earn).
- Who is Pay As You Earn best for? This can be a good fit for people with high debt who want to attach their student loans to income.
Income-based repayment plan (IBR)
- Eligible loans: Direct Federal Stafford, Direct PLUS loans, all Consolidation loan
- Terms: Monthly payments of 10 or 15 percent of your income and loan forgiveness after 20 or 25 years.
- Who is an Income-based Repayment Plan best for? This can be a good fit for people with large amounts of debt who want to peg their student loans to income. Some IBR borrowers wind up paying more back because the loan is extended.
Income-contingent repayment plan (ICR)
- Eligible loans: Direct Federal Stafford, Direct PLUS loans made to students and Direct Consolidation Loans
- Terms: Monthly payment of 20% of income or the amount you would pay if you were on a 12 year fixed payment plan. All loans are forgiven after 25 years
- Who is an Income-Contingent Repayment Plan best for? This is open to any Direct loan borrower (while some of the other income-driven plans have other requirements). You may wind up paying back more money than if you were on a fixed plan.
Income-sensitive repayment plan (ISR)
- Eligible loans: Direct Federal Stafford, Federal Family Education Loan (FFEL) Direct PLUS loans, FFEL Consolidation Loans
- Terms: Monthly payments are based on income but the loan will be paid off in 15 years (in full)
- Who is an Income-sensitive Repayment Plan best for? This plan is for students who have borrowed Federal Family Education Loans.
Private student loan repayment
Private student loans are managed by private lenders and will not qualify for any of the above repayment plans (which are only for federal student loans).
If you are having trouble making your private student loan payments, we recommend contacting the lender. Discuss what your options might look like and come up with a plan.
Additionally, you may be eligible to refinance your private student loans at a more favorable rate. You can see what types of private student loan refinancing rates you might qualify for through a loan refinancing marketplace.
Looking for more help about your repayment plan?
If you’re not sure where to even begin with this, we recommend that you also use the Loan Simulator tool from the US Department of Education. This free tool allows you to compare your student loan repayment options using your personal financial data. This will give you the most accurate estimate of what your monthly payment and overall loan payments will look like.
Frequently asked questions about student loan repayment plans
Am I allowed to change repayment plans after I've already chosen one?
What happens if I miss a student loan payment?
How do I choose the right student loan repayment plan for me?
What plan should I choose if I want to apply for Public Service Loan Forgiveness (PSLF)?
