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Know Your Repayment Options: Calculators and Payment Plans

As a Federal Stafford Loan borrower, you should plan to budget at least 8% of your total monthly income after graduation to be paid towards your student loan debt. Therefore, it’s important to familiarize yourself with the various repayment plans available: standard, extended, graduated, income contingent and income-based. How much you pay and how long you take to repay your loans will vary depending on the repayment plan you choose. Consolidation loans also have varying repayment plans.

To get an idea of your monthly loan payments after you graduate, refer to the online repayment calculator that applies to the repayment plan you are considering:

Standard Repayment Plan – You will make fixed monthly payments to repay your loan in full within 10 years (not including periods of deferment or forbearance) from the date the loan entered repayment.

Graduated Repayment Plan – Your payments will be lower at first and then will increase, usually every 2 years. You must repay your loan in full within 10 years (not including periods of deferment or forbearance). At a minimum, your payments must cover the interest that accumulates on your loan between payments.

Extended Repayment Plan – You will make fixed or graduated monthly payments and repay your loan in full over a period of time, not to exceed 25 years (not including periods of deferment or forbearance). To be eligible, you must have more than $30,000 in Federal Stafford Loan debt and you must not have had an outstanding balance on a Direct Stafford Loan on Oct. 7, 1998.

Income-Contingent Repayment Plan (ICR) – Your monthly payment amount will be based on your annual income (and that of your spouse if you are married), your family size, and the total amount of your Federal Direct Stafford Loans. As your income changes, your payments may change. If you do not repay your loan after 25 years under this plan, the unpaid portion will be forgiven. You may have to pay income tax on any amount forgiven. This plan is not available for parent PLUS loans.

Income-Based Repayment Plan (IBR) – Your required monthly payment is set at an amount that is intended to be affordable based on your income and family size. To initially qualify for the IBR plan, you must have a partial financial hardship. You are considered to have a partial financial hardship if the monthly amount you would be required to pay on your eligible loans under a Standard Repayment Plan with a 10-year repayment period is more than the monthly amount you would have to repay under the IBR Plan. If you repay under this plan for 25 years and meet other requirements, you may have any remaining balance of your loan(s) forgiven. For more detailed information about this plan or to download an IBR fact sheet, go to the Federal Student Aid website

Consolidation Loans – This option allows you to combine your loans into a single Direct Consolidation Loan, which simplifies repayment and allows you to extend the repayment period. Keep in mind that while your monthly payments may be lower, you may pay more interest over the life of the Direct Consolidation Loan. To determine which of your loans may be eligible for a consolidation, visit the Direct Loan Consolidation website or call 1-800-557-7392.