Navigating Federal Student Loan Repayment Programs

student loan hero

If you’ve borrowed thousands of dollars in federal student loans from the government, you might be stuck with a hefty student loan payment and a loan balance that just never seems to shrink!

Don’t worry: you’re not alone…and you may not be as stuck as you think.

You have several choices when it comes to your federal student loan repayment options, some of which could significantly reduce your monthly student loan payment.

Here’s the list of Federal Student Loan Repayment options:

Standard Repayment Plan (Up to 10 Years)

Under a standard repayment plan, you simply pay what you owe on a regular schedule. Your monthly loan payments are based on your loan’s minimum payment amount and the schedule set by your loan servicer. Typically, most federal student loans have a 10 year repayment term. This means your monthly payments are designed to repay your loans in 10 years after starting repayment.

Remember: you can pay more than the minimum on your student loans to get rid of your debt faster and avoid paying additional interest.

Graduated Repayment Plan (Up to 10 Years)

With a graduated repayment plan, your monthly payments are lower at first and then increase over time, more specifically, every 2 years. Like the extended repayment option, you’ll pay more for your loan over time, but your monthly payments will be more manageable today.

Extended repayment (Up to 25 Years)

An extended repayment plan is just how it sounds and will extend the life of your loan repayment for up to 25 years. Because you’re spreading your loan out across a longer period of time, your monthly payments are lower than the standard repayment plan. At the same time, extending the timeline of your student loan repayment means you’ll accrue more interest and pay more over the long term.

Income-based Repayment Plan (Up to 30 Years)

Your monthly student loan payments under this plan is based on your income, which could provide you with more flexibility for how you repay your debt if you’re not earning a lot of money today. You’ll pay more for your loan over time versus a standard repayment plan, but you may be able to have some of your loans forgiven if you make consecutive payments for an extended period of time (usually 10 years or more).

Pay As You Earn Repayment Plan (Up to 20 Years)

This program, also known as PAYE, caps your monthly payments at 10% percent of your discretionary income. Also, your monthly payments will change as your income changes. After 20 years of successful payments, any remaining balance will be forgiven. Keep in mind, whenever your student loans are forgiven you will need to pay income tax on the forgiven amount.

Deferment (Up to 3 Years)

Deferring your student loans means that you temporarily postpone your loan payments. Deferment is usually granted for situations like returning to school, unemployment, disability or military service. During a deferment period, your loan balance on subsidized loans does not accrue interest; you will however accrue interest on any unsubsidized federal loans.

Forbearance (Up to 12 Months)

If you can’t make your scheduled loan payments, but don’t qualify for a deferment, your loan servicer may be able to grant you a forbearance. Forbearance is a temporary postponement or reduction of your student loan payments. If your loan is in forbearance, your debt balance will increase as it continues to accrue interest.

Public Service Student Loan Forgiveness (At least 10 Years)

Debt forgiveness? Sounds too good to be true… But this is a legitimate option for some borrowers. If you work in the public sector, you could have a good chance of having your student loans forgiven. Depending on the type of loan you have, when it was taken out and the amount of time you work in the public sector, a percentage of your federal student loans may be forgiven for each year of completed public service. Public service employment includes work with the government, nonprofit organizations, military service, Peace Corps and other public service organizations.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderRates (APR)Eligible Degrees 
Check out the testimonials and our in-depth reviews!
2.58% - 7.25%Undergrad
& Graduate
Visit SoFi
2.99% - 6.99%Undergrad
& Graduate
Visit Laurel Road
2.57% - 6.32%Undergrad
& Graduate
Visit Earnest
2.57% - 6.49%Undergrad
& Graduate
Visit CommonBond
2.56% - 7.82%Undergrad
& Graduate
Visit Lendkey
3.11% - 8.46%Undergrad
& Graduate
Visit Citizens
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.